The Trickle Down Theory and Time Progressive Tax.

Discussion in 'Economics' started by morganist, Feb 28, 2011.

  1. No they concern economics in the aggregate

    Otherwise 1 nation will subsidize another's consumption ( like we see now). If china would build it's internal markets then they wouldn't be forced to subsidized Americas's consumption. This is the "high wage doctrine" of the lost school of American Political economy.Unknowing to most economists today. America didn't prosper from the English free trade model. The american system disproved the comparative advantage religion of ricardo and adam smith by placing tariffs and building internal markets. Which resulted in America out mechanizing (innovating) British textiles. If america would of stuck to comparative advantage. We probably would still be a raw material provider to Britain. Being no more than a pseudo colony or vassal.History shows Free trade only benefits already industrialized countries at the expense of the undeveloped by not allowing them to industrialize. Fredrick list brought this same doctrine to Germany named Zollverein which led to the fastest growing economic output the world had ever witnessed.90% of economists, bloggers etc. just repackage neo classical economics tiring to make it work. Why not move on and use the American System the historically successful model.

    try this
    http://www.amazon.com/Americas-Protectionist-Takeoff-1815-1914-Michael/dp/3980846687/ref=pd_sim_b_2

    http://www.amazon.com/National-Syst...UTF8&coliid=I1GBS1BSXMAM1&colid=1JXBKXZAZWBN3
     
    #11     Mar 1, 2011
  2. morganist

    morganist Guest

    I think I understand you point (perhaps not) but people from one nation buying another nations goods is not subsidy it is trade. I appreciate your views of domestic trade and value but it is changing unless you stop trading with other countries it will not work.

    Is your idea to create a self sustaining nation which is not dependent on others?
     
    #12     Mar 2, 2011


  3. when one nation has to carry the debt of another to export, like U.S./china I would call that subsidizing consumption.China would be better off selling it's goods to itself.I know you don't think this is sustainable.

    free trade centers around the theory of comparative advantage. Which basically means that each nation has certain things it's good at and should exclusively focus on that.
    Go back to the textile example. Britain had a comparative advantage over the U.S. because of it's mature textile ind. It could under sell any other country at that one point in time. according to comparative the advantage the U.S shouldn't of even tried to enter this industry, but they did and out performed them.So the obvious flaw here is mistaking one nations comparative advantage at one specific time as the best that can be achieved.The only way the US could compete is to put up temporary tariffs on that ind. and try it for themselves over a 20 year or so period.This is why undeveloped nation stay undeveloped their markets are open for the mature industries to dump cheap exports never giving domestic production a chance. In the case of agriculture the US destroyed many countries ability to produce food by dumping cheep US grain. Now we have to give food aid to these countries and in turn they sell us their indigenous resources on the cheep.Building up their own food supply and industries based on their indigenous resources would be beneficial . Certainly a self sustaining country is more stable then relying on foreign energy and cheap goods from other countries. we subsidize foreign oil, defense is half our budget in the US how much of that is to keep the oil flowing. Despite having plenty of nat gas for 100 years or more.

    I'm not saying all nations should isolate themselves, just that free trade gives a country that has an advantage at that specific time and turns it into a permanent advantage.If each nation would act to it's best self interest developed countries would push free trade and underdeveloped should push for protection.Through negotiation a balance hopefully would be reached.
     
    #13     Mar 2, 2011