Why is FAIR TRADE better than FREE TRADE?

[DBT]

More realistically:

'' Assuming a government’s intention is to wind back its contribution to demand in the economy (via government spending) through what is euphemistically termed “fiscal consolidation”, and assuming our trade is not significantly changing, a certain real wage growth is required to generate sufficient growth in demand to warrant sustained investment and productivity growth.

It’s the flipside to this scenario that is worrying. To the extent that increasing profitability through increased productivity is not shared in the form of increased real wages, the economy faces the danger of its productive capacity growing faster than demand. This kind of danger was highlighted long ago by the noted Italian economist Luigi Pasinetti.

In this scenario the profit of each unit of output may increase initially as productivity grows, but demand does not keep pace, in which case the increase in profitability is likely to be short-lived. More worrying in this case is that employment growth suffers and consequently the unemployment rate is likely to rise.

Some economists would counter that real wages would fall in order to absorb any increased unemployment, though this claim has always been contentious. It supposes that unfettered markets will always provide demand for whatever amounts of goods and services are produced – in itself a controversial position in economics.

Of course, none of this deals with the moral or ethical imperative of a minimum wage which ensures a liveable real wage. Rather, the point here is that, quite aside from the moral or ethical case, there are economic arguments to be had for ensuring an appropriate rate of growth of real wages.''

 

[Lumpenproletariat]

Wackodoodle Economics: Drive up demand in order to absorb all the existing production, no matter how inefficient it is.

Free Trade Economics: Let the good producers prevail who efficiently meet the existing market demand.

More realistically:

'' Assuming a government’s intention is to wind back its contribution to demand in the economy (via government spending) through . . .

This is meaningless jibber-jabber. There is no such thing as a "contribution to demand in the economy," because there's no need for any such contribution. You "contribute" to satisfying a need, not increasing any "demand" in the economy. The only "contribution" needed is to satisfy the existing demand, not to contribute to increasing the demand. The economy has no need for any increased demand, but only for satisfying the existing demand.

I.e., don't INCREASE the demand, just satisfy the existing demand.

In the case of government, the need is to meet the need for infrastructure, etc., or public demand for certain services. So government satisfies some of this demand, but there's no need for government to increase any demand, or create more demand for anything.

. . . through what is euphemistically termed “fiscal consolidation”, and assuming our trade is not significantly changing, a certain real wage growth is required to generate sufficient growth in demand to warrant . . .

No, there's no need for any "growth in demand" for anything, for any purpose. There is no need for demand itself. There is only need for the stuff demanded, like better roads, a bridge, etc., but no need for any demand, or to increase the demand.

. . . to generate sufficient growth in demand to warrant sustained investment and productivity growth.

No, there's no need to "generate sufficient growth in demand" -- that's Wackodoodle pseudo-economics. It's not DEMAND that there's a need for.

If productivity growth takes place in order to meet existing demand, there's no need for government to do anything about it. There's no need to somehow increase the demand for something, for any purpose, such as "warrant sustained investment" or other babble. No, just build the needed roads, etc., not to generate new demand, but rather to just meet the public need, like for transportation, etc. Meet the existing demand, yes, but don't generate any demand per se. There is no need for "demand" per se.

It’s the flipside to this scenario that is worrying. To the extent that increasing profitability through increased productivity is not shared in the form of increased real wages, the economy faces the danger of its productive capacity growing faster than demand. This kind . . .

No, there's no need to increase wages for such a silly meaningless purpose as this. The only need to increase wages is to attract needed workers, to get the needed work done, not to get the demand growing faster.

There is no need to make the demand grow faster. That is wacko phony babble barf Snake Oil Economics.

If too much stuff gets produced so it doesn't get bought by anyone, then whoever produced it loses, because they wasted their investment by spending it on unnecessary production. The solution to overproduction is to let the market punish the producers who produced the unnecessary stuff that couldn't be sold, not to create extra demand for the stuff that should not have been produced.

This kind of danger was highlighted long ago by the noted Italian economist Luigi Pasinetti.

Many "noted" nutcase Snake Oil Economists have preached the same barf. Just because this one is Italian doesn't make it any less wacko -- we'll call it Spaghetti-Brain Economics in his case. It's still nutcase, whatever their race or nationality is. There is no such thing as a need for more demand.

In this scenario the profit of each unit of output may increase initially as productivity grows, but demand does not keep pace, in which case the increase . . .

-- in which case let the producers lose on their investment for producing stuff there wasn't any demand for. It's very simple. Let the market punish those uncompetitive producers who made the bad decision to produce that stuff. Meanwhile the good producers who did meet the existing market demand will do just fine, making more profit and getting rich for doing a good job. But those who wasted their capital on stuff no one would buy should be punished by the market.

. . . in which case the increase in profitability is likely to be short-lived.

Yes, for the uncompetitive ones who produced something that would not sell. That's fine, for them to lose. But for the good producers who made good decisions, their profitability will do fine, and they will prosper, despite someone else's decreased profits because of their bad decisions. Good production = those companies continue to profit despite unprofitability of the bad companies. So profitability of those good producers is NOT short-lived.

More worrying in this case is that employment growth suffers and consequently the unemployment rate is likely to rise.

Not if employers are allowed to hire cheap labor = lower labor cost = more hiring and more profitability due to the cost savings.

Some economists would counter that real wages would fall in order to absorb any increased unemployment, though this claim has always been contentious.

Allowing wages to fall, according to the (lower) demand, always means increased employment. And they can never fall below the level necessary to attract the needed workers, so the needed work will get done, which is all that matters.

It supposes that unfettered markets will always provide demand for whatever amounts of goods and services are produced – in itself a controversial position in economics.

It's all wackodoodle economics, because there is no need to "provide demand" for anything. If "goods and services are produced" which there was no demand for, then whoever produced them should be punished by the market for those bad decisions. It is wrong for them to produce something that won't sell. It's wacko nutball economics to "provide demand" for anything. If there's no demand for the stuff, then don't produce it. Or let the "unfettered market" punish the jerk who produced it. No need for the government to worry about it.

Of course, none of this deals with the moral or ethical imperative of a minimum wage which ensures a liveable real wage.

And makes everyone worse off, by causing less to be produced, and causing many to be unemployed who would otherwise do needed work at low wages. There is no moral or ethical imperative to do this. The imperative should be to IMPROVE people's lives, not make them worse as minimum wage makes more people worse off, by driving up cost and prices and reducing production.

Rather, the point here is that, quite aside from the moral or ethical case, there are economic arguments to be had for ensuring an appropriate rate of growth of real wages.''

That's exactly what the "unfettered market" does, without the government interfering. Because as more work is needed, the wages rise as needed in order to attract the needed workers, but not rising higher than this, so that the labor cost does not increase more than needed, so we get the maximum needed production at the most reasonable cost = all consumers are better off = the nation is better off.

 

[DBT]

I dont think you understood the article, the economics or the social and moral implications of an underclass that serves the needs of the rich while getting paid as little as possible. An underclass of working poor, struggling in an economy of tremendous production and wealth....wealth that is reserved for the few.

 

[Lumpenproletariat]

How can there be any need to INCREASE THE DEMAND for something?

Can anyone explain this gibberish?

I don't think you understood the article, the economics or the social and moral implications of an underclass that serves the needs of the rich while getting paid as little as possible. An underclass of working poor, struggling in an economy of tremendous production and wealth....wealth that is reserved for the few.

You're the one who didn't read it or understand it. It said nothing about any "social and moral implications of an underclass" or about "the rich" or anyone getting "paid as little as possible" or "working poor" or anyone "struggling" in an economy of "wealth that is reserved for the few."

None of that is in the article. The closest is the last paragraph which says it's NOT about what's "moral" or "ethical" --

Of course, none of this deals with the moral or ethical imperative of a minimum wage which ensures a liveable real wage. Rather, the point here is that, quite aside from the moral or ethical case, there are economic arguments to be had for ensuring an appropriate rate of growth of real wages.

It's only about "economic arguments" for wage growth. And the main argument is that wage growth is a tool to increase "demand" in the economy -- which makes no sense.

None of your "underclass" and "working poor" and "the rich" rhetoric is in the article, not even in the rest which you did not quote. There are no words about any "underclass" or about "the rich" or "working poor" or anyone "struggling" or about wealth "reserved for the few."

None of those words or ideas are in the article.

It's about the need for more demand. Or the need to "generate" demand or "contribute" more demand.

Your quote from the article contains the words "generate sufficient growth in demand" and "contribution to demand" and "danger of its productive capacity growing faster than demand" and "demand does not keep pace" and a false claim which "supposes that unfettered markets will always provide demand" for the goods and services produced.

What does "sufficient growth in demand" mean? or "contribution to demand" or demand that does not "keep pace" or goes too slow, or the need to "provide demand" for stuff produced?

Can't you see that this article is claiming there is a need for more demand, or that we need a certain amount of "demand" to absorb the production? It repeats this over and over. Didn't you read it?

Explain what is this need for demand. Or if you can't, then admit that you don't understand what this article is talking about. Don't just copy and paste your Left-wing rhetoric into the article to make it say your talking points. It's trying to give a different kind of argument, not the Leftist outcry against the rich, which is all you know, but an economics argument saying that "demand" is needed, and this need is met by increasing the wage level, to contribute the extra demand which is needed for something.

But no one can ever explain what it means to say there's a need for more demand. Apparently even those who quote it religiously have no idea what it means. You seem to be oblivious to the word "demand" which is repeated several times in the article. Didn't you see that word? Can't you figure out that it's saying something about this "demand" thing? What is it saying about "demand" that we need to understand?

Does anyone understand what this pseudo-economist means when he speaks of a need for more demand?

What is this not enough demand problem?

If something is produced that no one wants to buy (lack of demand), isn't that the producer's fault? Shouldn't that producer simply suffer a loss because he produced something for which there was insufficient demand?

How can there be any need to increase the demand, when all that needs to happen is that the producer in question should simply lose out, or be punished by the market for bad performance? What other need is there than to simply punish that producer (or those producers) who did the wrong thing? which the free market does automatically anyway? by reducing their profit? -- problem solved!

How is it anything but degenerate gibberish to say we need to somehow increase the demand, artificially, for something produced which consumers won't pay for?

Read the article and notice the word "demand" and that it repeats over and over that there is some lack of sufficient demand, and that this must be corrected somehow, such as by increasing wages, and so on.

And then explain how this can make any sense.

 

[DBT]

Not worth the effort. It's been explained too many times.

If you haven't understood by now, you never will.

I'll leave it to someone else...if they have the patience.

 

[Lumpenproletariat]

The issue is inequality, double standards.

Practically unlimited wealth for the top end of town while workers [wages] have been stagnating for decades.

Worker value has been stagnating, so their wages also should stagnate.

If some at the top are overpaid, the solution to that is higher taxation on that excess income beyond their value so all society gains the benefits of those high profits. But forcing them to pay higher wages only makes us all worse off, because it drives up the cost of production -> higher prices and reduced production = the whole nation is made worse off.

That is the actual situation.

That smaller companies do not pay their Managers as high as large companies is hardly relevant to the overall situation of practically unlimited wealth and power in the hands of the few.

So increase tax on those at the top. But nothing is fixed by imposing higher labor cost onto all employers, including those lower who are struggling to survive.

 

[Lumpenproletariat]

So? The point is they are not a representative sample of all workers.

Please provide independent evidence to support your claim about the CEO pay ratio.

I do not recall the original source, but a couple of points:

https://chiefexecutive.net/wp-content/uploads/2014/08/CEO_CompReport_ExecSummary_2014.pdf

Note how it's only the CEOs of the biggest companies that make that kind of money.

https://fee.org/articles/no-ceos-dont-make-350-times-more-than-their-employees/

And it's dirty statistics besides.

I'm not finding the data on the consolidation that's driven up company sizes but you're old enough, you've seen it happening.

Neither of those sources debunks the fact the the compensation for the CEO class has grown wildly in comparison to the working class over the years.

Scapegoating all CEOs is no different than scapegoating all Jews or all Italians or all Capricorns, etc.

In every group there are some fat cats getting more than their value. And lumping all workers together in one class to be pitied is equally nonsensical.

And don't forget overpaid celebrities, professional athletes, etc. What is the obsession on CEOs only? And why do all the proposed remedies just target employers for scapegoating?

The simple solution to income inequality is to impose a tax on the extreme high incomes, or also onto some assets, like mansions, vast estates. But to scapegoat all employers by artificially driving up wages is Crybaby Economics which can only hurt everyone, while doing nothing to correct cases of overcompensation.

 

[Lumpenproletariat]

bashing employers (or other scapegoats) instead of solving problems

Nobody is bashing employers.

You're "employer-bashing" as long as all you demand is higher labor cost to employers, forcing them to pay higher wages even though it will cause many of the modest ones to fold. Your plan punishes all employers by driving up their labor cost, while leaving most of the super-rich untouched. You pretend to be outraged at the unequal rewards going to those at the very top, and yet most of them are not employers, and your only answer to everything is to drive up wages, which punishes all employers, even those who are poor, as some of them are, or they have net negative wealth because of high debt from their investment.

You are bashing workers by calling them 'crybabies' and 'whiners.'

They are crybabies if all they can do is whine for higher wages, which punishes all employers, causing some to go out of business, thus reducing production, and does no net benefit for society. Anyone demanding personal benefits to enrich themselves at everyone else's expense is a crybaby.

Employers need employees to run their business. Workers are needed. Workers do productive work. Workers need jobs in order to earn a living.

Running a business is essentially a partnership between the business owners/managers and their employees.

As it stands, it is a partnership with a power imbalance tipped heavily in favour of the employer.....

There's nothing wrong with "power imbalance" or inequality.

There will always be cases of "power imbalance" as long as anyone has more wealth than another. It is not bad that power imbalance or inequality exists. This is not anything which has to be corrected as an evil. The employer/employee power imbalance, where it exists, is no different than the power imbalance between workers paid $40/hour and workers paid only $5/hour. Most union workers have a "power imbalance" advantage over poor people, which they use to promote their interests at the expense of those poor people, because everyone who has more than another uses that imbalance to their advantage over everyone who has less.

And workers in a rich country like the U.S. or U.K. have a "power imbalance" over workers in 3rd-world countries, which they use to promote their advantage over those poor workers who are so much worse off. There's nothing wrong with some having more than others and using their advantage to their benefit.

. . . tipped heavily in favour of the employer.....which for all the given reasons, individual contracts, poor leverage for applicants, etc., results in stagnating incomes for workers while those . . .

Only those workers whose VALUE is stagnating. It's appropriate for those whose value is stagnating to experience stagnating incomes.

. . . while those at the top enjoy practically limitless wealth.

And that will continue if you get everything you're demanding. Because all you demand is higher wages for all workers, including the less competitive, thus punishing all employers and society generally, while the super-rich would be left mostly untouched and would continue to enjoy their limitless wealth.

You can complain all you like, but that is the undeniable and indefensible situation the world is in.

And you would keep it that way, with your pointless employer-bashing schemes, driving up labor cost and thus prices everyone has to pay, while the super-rich would continue just getting richer, and laughing at the Left-wing crybabies who can't figure it out, because all they can do is obsess on punishing the employer class who are not the problem.

 

[Lumpenproletariat]

I still really want to know what Lumpen does for a living.

Care to spill, Lumpen?

I'm a parasite.

 

[Lumpenproletariat]

CEOs rake in 940% more than 40 years ago, while average workers earn 12% more

Are companies 940% bigger?

I don't know for a fact, but probably they are. "940% bigger" is approximately a factor of ten. If S&P 500 is any indication, the market value of 500 largest companies is about 25 times what it was 40 years ago.

That doesn't mean the companies themselves are that much bigger, just that they are that much more valuable.

Has GE built ten more plants for every one in production since forty years ago? General Motors? Boeing? McDonalds? Anyone?

It's stock market manipulation, plain and simple.

Some of this is true. But some companies are small and struggling, and some CEOs also.

If anything is wrong, the solution is to tax higher the top incomes (on ALL the super-rich, including many non-CEOs), and also impose Bernie's tax on Wall Street, which is his one good idea.

But cracking down on all employers by driving up wages artificially will only trash the economy further, hurting everyone rich and poor.

 

[Lumpenproletariat]

More and more replaceable -> less and less valuable -> less and less leverage -> lower and lower compensation

CEO expectations are raised whenever another company is offering more, they feel that this is the current rate that they themselves should aspire to....consequently, unlike ordinary workers who have little or no leverage when it comes to pay negotiations, the . . .

It's because of their low value that they have so little leverage. The ordinary workers this refers to are precisely the ones being replaced by cheap labor and by machines, as their value shrinks more and more, and thus their leverage also shrinks.

. . . the executive class enjoy hefty remuneration packages while . . .

If some of that is higher than their value, the solution is to tax that excess income, so that all society benefits from those windfall profits.

. . . while wages for workers languish in the doldrums.

Because of their languishing value. It's basic economics. They're becoming more and more easily replaceable = less and less valuable.

One is a race to the top, the . . .

Tax the excess. When will you finally figure it out?

. . . the other with incomes and conditions steadily eroding away, gradually losing past gains.

Due to eroding value of the workers who have become so much more easily replaceable, and losing past gains along with their value which was once higher and brought them higher gains.

This shouldn't be so difficult to figure out.

 

[Lumpenproletariat]

eliminating employers / driving companies away

Who said anything about eliminating employers?

That's what you're trying to do when you say a company that doesn't pay enough shouldn't exist. You're not going to make better jobs, you're going to make unemployment.

Who said a company that doesn't pay enough shouldn't exist?

Laws requiring higher wage than what the employer would have to pay in order to attract the needed workers.

Also fair trade demands imposing higher wages and other costly benefits not worth it to the employer to pay. Elimination of sweatshops = they don't exist = employers eliminated.

Or how about the city of Long Beach which recently enacted "hero pay" for grocery workers during the current pandemic.

https://ktla.com/news/local-news/wo...f-food-4-less-ralphs-due-to-citys-hazard-pay/

This resulted in Kroger deciding to shut down a Ralph's store and a Food 4 Less store. That's an example of eliminating employers who don't pay enough.

When laws are enacted dictating higher costs to a company, it means some companies will have to shut down, because such a law says that you can't exist here unless you pay these high costs, and not all companies will find it profitable to operate at those higher costs.

And "fair trade" is largely about imposing higher costs onto companies, especially higher labor cost, which means either the company complies or it's prohibited from existing.

 

[Lumpenproletariat]

With confidence and money in their pockets, people spend, enjoy life, the economy and society thrives. Everyone is doing well.

Sure, if there's a total increase in everyone's wealth, so everyone has more stuff which is magically produced somewhere because Karl Marx or Bernie Sanders or Donald Trump waved their China-bashing magic wand -- Sure, if you know of a way to magically produce all those goodies we want, so everyone can have their own mansion or the "American Dream" or whatever else they think they're entitled to -- Go for it!

I want the moon! Why can't I have it? If you want it too, then let our "President" (or "Prime Minister" or whoever) provide another moon, and another, for everyone who wants their own moon. Isn't that "fair trade"? Why not? I can have whatever I want, and you can have whatever you want. Anything less isn't FAIR!

Whereas "free trade" isn't good enough, because it requires us to compete, to improve our performance, instead of promising us the workers' paradise we're entitled to.

Nobody is asking for the Moon. Reasonable pay for work performed is sufficient.

That's what the market already gives them, based on the free individual choices of employers and employees, without the state dictating any terms. And without either side being forced to have pity on the other instead of just doing what's good for business.

Necessary work, work that keeps society running, yet too often poorly paid.

Only because some of the workers are of so little value, being easily replaceable by cheap labor or by machines. What matters is getting that work done, for everyone's benefit, not feeling pity for workers who are demanding more than what is necessary in order to attract the necessary labor.

In a wealthy developed nation, that is a truly shameful thing.

No, paying everyone only what they're worth and no more -- cost efficiency -- is what makes the nation more wealthy, because it means more work gets done = more production and more wealth = higher living standard for all.

 

[Loren Pechtel]

Another example of why we can't rely on foreign suppliers in some cases:

https://arstechnica.com/tech-policy...h-export-curbs-to-hobble-us-defense-industry/

China is deliberately using their position as the primary supplier of rare earths to make it hard for us to build military equipment that needs them.

(And it's not that rare earths are really that rare, it's that chemically they behave in a very similar fashion and thus you can only mine them as a group and that mining is not exactly good for the environment. China has the technology to extract them and a system that can sweep the toxic results under the rug rather than deal with them safely.)

Non-essentials don't matter, but essentials should be produced locally so they can't be used as weapons against us.

 

[Lumpenproletariat]

Another example of why we can't rely on foreign suppliers in some cases:

https://arstechnica.com/tech-policy...h-export-curbs-to-hobble-us-defense-industry/

China is deliberately using their position as the primary supplier of rare earths to make it hard for us to build military equipment that needs them.

(And it's not that rare earths are really that rare, it's that chemically they behave in a very similar fashion and thus you can only mine them as a group and that mining is not exactly good for the environment. China has the technology to extract them and a system that can sweep the toxic results under the rug rather than deal with them safely.)

Non-essentials don't matter, but essentials should be produced locally so they can't be used as weapons against us.

And therefore what? Don't buy something from China if we need it, but it's OK to buy something from them as long as we don't need it? That's nutty.

There is no conclusion to draw from this except that we should take advantage of ANY source for anything we need or want. And nothing prevents us from developing it ourselves also, or obtaining it also from other sources than China and avoiding helpless dependency on any one source. That need for non-dependency does not imply the need for some penalty on China trade. Negativity and suppression of trade and paranoia against a certain supplier is never the solution to anything.

That we should penalize certain trade with China because they offer something we need, or ban something China offers us because we need it, is Nutcase Paranoid Economics. All that's called for is to also seek or develop other sources for the needed item, in addition to China, and promote some domestic production where practical, without hallucinating that China threatens us by offering us something we need, or that an item produced in China has to be tainted somehow because it's Chinese.

Nothing about NEEDING a certain item leads to the conclusion that Chinese production of it is bad or that buying it from China makes us worse off. If we need it, then China only makes us BETTER off by selling it to us.

It is delusional to obsess on certain "essentials" as being in a special category such that buying it from China somehow becomes a threat to us. This is delusional in the same sense as it's delusional to think the world would be better off if China had never existed, and that destroying China would save the world and all that we hold dear.

 

[Loren Pechtel]

Another example of why we can't rely on foreign suppliers in some cases:

https://arstechnica.com/tech-policy...h-export-curbs-to-hobble-us-defense-industry/

China is deliberately using their position as the primary supplier of rare earths to make it hard for us to build military equipment that needs them.

(And it's not that rare earths are really that rare, it's that chemically they behave in a very similar fashion and thus you can only mine them as a group and that mining is not exactly good for the environment. China has the technology to extract them and a system that can sweep the toxic results under the rug rather than deal with them safely.)

Non-essentials don't matter, but essentials should be produced locally so they can't be used as weapons against us.

And therefore what? Don't buy something from China if we need it, but it's OK to buy something from them as long as we don't need it? That's nutty.

You seem to not understand the concept of need vs want.

I have no problem with us buying a lot of consumer goods from China. We should not be importing anything whose lack will harm the country.

There is no conclusion to draw from this except that we should take advantage of ANY source for anything we need or want. And nothing prevents us from developing it ourselves also, or obtaining it also from other sources than China and avoiding helpless dependency on any one source. That need for non-dependency does not imply the need for some penalty on China trade. Negativity and suppression of trade and paranoia against a certain supplier is never the solution to anything.

If it's cheaper to import than produce locally there won't be much of any local source. That's why we need to wean ourselves off importing essentials.

That we should penalize certain trade with China because they offer something we need, or ban something China offers us because we need it, is Nutcase Paranoid Economics. All that's called for is to also seek or develop other sources for the needed item, in addition to China, and promote some domestic production where practical, without hallucinating that China threatens us by offering us something we need, or that an item produced in China has to be tainted somehow because it's Chinese.

It's not about penalizing, it's about protecting ourselves.

Nothing about NEEDING a certain item leads to the conclusion that Chinese production of it is bad or that buying it from China makes us worse off. If we need it, then China only makes us BETTER off by selling it to us.

Look at the oil shock of 1973. That's what I'm trying to avoid.

 

[Lumpenproletariat]

It's not about economics and survival, but about PARANOIA and CHINA-BASHING.

You seem to not understand the concept of need vs want.

There's not a black-and-white difference between them. It's degrees only. We need the electronic products. And we import food, which is a necessity. We need not only the raw steel, but also the products made with steel. If you subtract everything we "need," that means eliminating probably half or more of all our imports. Which would mean a drastic reduction in our standard of living.

You cannot enumerate all the items we "need" and distinguish them from the ones we do not "need" without drawing a totally arbitrary line somewhere, and greatly reducing our standard of living, no matter where you draw the line. Unless you assume that only the very top .1% of all imports are "needed" and everything lower is not needed. But this is just an arbitrary place to draw the line. There would be many items just below that line which are "needed" very much and without which our survival would be threatened and our living standard reduced.

I have no problem with us buying a lot of consumer goods from China.

Like machines and vehicles and tools and utensils and appliances -- These are necessities without which our survival and way of life would be threatened.

We should not be importing anything whose lack will harm the country.

So all the above imports should be banned, and also food. And why do you think TOYS are not necessary and something without which we would be harmed? How can children grow up in a healthy environment without any toys? and what about books, which are printed in several countries now in order to save on cost. How would it not "harm the country" if all books were eliminated? These are arbitrary concepts which have no meaning.

We "need" ALL the imports we buy from other countries.

There is no conclusion to draw from this except that we should take advantage of ANY source for anything we need or want. And nothing prevents us from developing it ourselves also, or obtaining it also from other sources than China and avoiding helpless dependency on any one source. That need for non-dependency does not imply the need for some penalty on China trade. Negativity and suppression of trade and paranoia against a certain supplier is never the solution to anything.

If it's cheaper to import than produce locally there won't be much of any local source.

Yes there will be. It'll just be produced at lower cost, more efficiently, perhaps at lower quantity, but ready to increase if there's an increase in demand, in which case there will be an appropriate increase in price.

That's why we need to wean ourselves off importing essentials.

Like food. Like almost everything we import. These are NOT non-essential. Cars are essential today, phones, computers. How can we survive without these? You are not explaining the difference between essential and non-essential.

That we should penalize certain trade with China because they offer something we need, or ban something China offers us because we need it, is Nutcase Paranoid Economics. All that's called for is to also seek or develop other sources for the needed item, in addition to China, and promote some domestic production where practical, without hallucinating that China threatens us by offering us something we need, or that an item produced in China has to be tainted somehow because it's Chinese.

It's not about penalizing, it's about protecting ourselves.

No, it's about China-bashing. You obviously cannot explain the difference between what threatens us and what does not. You cannot explain what the threat is, or what might go wrong unless we curtail our trade with China, even though there is no example of any harm you can name which threatens us and that we need protection from, because of China, or any other foreign source.

Everyone of us individually is dependent on others for our survival -- others outside our neighborhood and outside our town and outside our state or province or region. Even within the country we are dependent on other entities than ourselves. There is no way to define some BOUNDARY around us which we cannot cross because it threatens us to be dependent on those aliens out there on the other side of that arbitrary boundary.

Our best security is total openness, acceptance of all sources, trade with everything out there, no matter who or what or where -- whatever competes with the others.

Nothing about NEEDING a certain item leads to the conclusion that Chinese production of it is bad or that buying it from China makes us worse off. If we need it, then China only makes us BETTER off by selling it to us.

Look at the oil shock of 1973. That's what I'm trying to avoid.

The answer to that is MORE sources, including foreign, for the needed item. And also NO PRICE CONTROLS to interfere with the local market. The answer is never to curtail any sources out of delusions that they are a threat to us or other stupid reasons.

It has been demonstrated historically that REDUCING the barriers to foreign sources is the better way to meet the domestic need, and not protecting consumers with price controls which discourage competition from new sources.

When the price controls in the 70s were finally eliminated, the gas prices went up temporarily to allow the market to meet the need better, and soon the prices came back down again due to the increased competition, and the long lines at the pump ended.

The Mideast oil countries were part of the problem, triggering it, but the bad anti-free-market policies made it much worse.

 

[ZiprHead]

 

[Lumpenproletariat]

FAIR TRADE: drive up demand out of pity for incompetent producers. It's "only fair" to provide buyers to consume whatever they produced.

FREE TRADE: Let producers get rich serving whatever demand already exists, and doing it at low cost, including low labor cost.

Apparently to Lumpen it's not shameful to take advantage of the downtrodden so you can get incredibly wealthy.

Right, making "the downtrodden" better off is not shameful.

What's "shameful" about making people better off while taking "advantage of" them? Those "downtrodden" would be worse off if they had not been taken advantage of (by being given low-wage jobs). Just because you get rich by hiring them doesn't change the fact that you're making them better off.

It's an admirable trait.

Yes, it's admirable to get rich while making people better off. Why do you want them to be worse off? Should people who make others better off while also getting rich be condemned for it? What's wrong with getting rich if you thereby make others better off?

Still wondering what you do for a living, Lumpen.

Sounds like you need something to do to keep you out of mischief. I'd offer you a slave-wage job in one of my sweatshops, but you'd have to wait behind too many others lined up and not dying off quickly enough from the Covid Virus for you to reach the front of the line any time soon.

However, here's a volunteer job for you, to keep you off the streets. At least it has an impressive title, Imperial Grand Inquisitor, whose function is to force answers out of anyone who would publish something like the following:

More realistically:

''Assuming a government’s intention is to wind back its contribution to demand in the economy (via government spending) through what is euphemistically termed “fiscal consolidation”, and assuming our trade is not significantly changing, a certain real wage growth is required to generate sufficient growth in demand to warrant sustained investment and productivity growth.

It’s the flipside to this scenario that is worrying. To the extent that increasing profitability through increased productivity is not shared in the form of increased real wages, the economy faces the danger of its productive capacity growing faster than demand. This kind of danger was highlighted long ago by the noted Italian economist Luigi Pasinetti.

In this scenario the profit of each unit of output may increase initially as productivity grows, but demand does not keep pace, in which case the increase in profitability is likely to be short-lived. More worrying in this case is that employment growth suffers and consequently the unemployment rate is likely to rise.

Some economists would counter that real wages would fall in order to absorb any increased unemployment, though this claim has always been contentious. It supposes that unfettered markets will always provide demand for whatever amounts of goods and services are produced – in itself a controversial position in economics.

Of course, none of this deals with the moral or ethical imperative of a minimum wage which ensures a liveable real wage. Rather, the point here is that, quite aside from the moral or ethical case, there are economic arguments to be had for ensuring an appropriate rate of growth of real wages.''

DBT won't explain what the above article is talking about even though he posted it here. I "inquisitioned" him to explain what is the "contribution to demand in the economy" that is needed, or how there is such a thing as a need for more "demand" as the article above says -- i.e., a need for more "demand" which would be provided by increasing wages, or to prevent the "danger" that "demand does not keep pace" or that the market does not "always provide demand" or because production is "growing faster than demand" -- so we need to "generate sufficient growth in demand" and so on.

Why don't you determine the answer why we need more "demand" or "sufficient" demand or more "growth" in demand? instead of needing to just reduce the production of whatever there isn't enough demand for? or perhaps reducing the price of the excess product in order to find buyers for it? What principle of economics says we have to artificially create demand for something that isn't selling?

Why don't you make yourself useful and tackle DBT's problem of being unable to answer this simple question about the need for "demand" from the article which he himself quoted, if you need a mystery to solve. He seems not to have even read it.

When asked to explain why there is any such need to make demand go up higher, DBT's only response was

I don't think you understood the article, the economics or the social and moral implications of an underclass that serves the needs of the rich while getting paid as little as possible. An underclass of working poor, struggling in an economy of tremendous production and wealth....wealth that is reserved for the few.

Why doesn't he even once mention "demand"? -- which is what his quoted article is about, saying we need to provide more "demand" or increase the growth of demand to make it "sufficient" for something, and yet there's no explanation why there is any need for this "demand" which the article repeats over and over and which DBT seems to not see, because perhaps he did not even read the article which he posted.

Whether contributors even read the article they post, or have any idea what it says, is a more important matter to address than what they do for a living.

 

[Lumpenproletariat]

Getting the needed work done is a higher value than driving up the labor cost higher than its worth.

Nobody is asking for the Moon. Reasonable pay for work performed is sufficient.

That's what the competitive free market does, paying what the work is worth, as needed to get the work done, or whatever is necessary to get the needed workers -- and no more than this in order to minimize cost which is beneficial to the whole nation, or to all consumers = greatest good for the greatest number.

Necessary work, work that keeps society running, yet too often poorly paid.

But the free market ensures that they're paid enough in order to attract the needed workers, which is all that matters, because that protects the interests of the whole population rather than any limited narrow interest group.

In a wealthy developed nation, that is a truly shameful thing.

Apparently to Lumpen it's not shameful to take advantage of the downtrodden so you can get incredibly wealthy. It's an admirable trait.

Still wondering what you do for a living, Lumpen.

Based on his arguments for Christ and miracles in the religion forum, apparently he is a Christian. Which makes the attitude, exploiting others for personal gain, some getting extremely rich while others struggle, quite puzzling.

Why is it puzzling, since they're making those struggling ones better off than they would be otherwise? Christ never taught that it's wrong to make people better off.

Unless you mean Christ was just a babbling preacher, like you, whose babbling per se somehow makes the world better, even though what you say makes it worse off.

Not letting needed work get done, as you preach, because you demand that the cost for it be driven up too high, does not make people better off, but worse off. It's better to let anyone get rich making others better off, getting the needed work done at lower cost, rather than your program of preventing the needed work from getting done only in order to promote certain uncompetitive producers/workers to the detriment of everyone else.