Ray Dalio's economic template book can be found online here: http://bwater.com/Uploads/FileManag...hine_works__leveragings_and_deleveragings.pdf (210 pages - PDF)
Why read? It is so unAmerican! <iframe width="640" height="480" src="//www.youtube.com/embed/PHe0bXAIuk0" frameborder="0" allowfullscreen></iframe>
uhhh.... yeah... the productivity increase has to be examined a little better than in that video. Productivity increase essentially means machines replace workers. For awhile, in US history, productivity increases went hand in hand with more jobs being created as food prices came down and people had more discretionary income. That is at an end, in fact people are learning that factory farming is producing food that isn't healthy and are learning to reverse the trend in food productivity for the sake of their health. The last recovery that we had that included an increase in jobs was before 1970. All recoveries since then have been jobless in nature as "productivity increase" == "machines replace workers".
The "Candle Maker's Petition" is a satire of protectionist tariffs written the by great French economist, Frederic Bastiat. In many ways, it expanded on the free market argument against mercantilism set forth by Adam Smith, but Bastiat's target was government tariffs that were levied to protect domestic industries from competition. In Bastiat's "Candle Maker's Petition", all the people involved in the French lighting industry, including "the manufacturers of candles, tapers, lanterns, sticks, street lamps, snuffers and extinguishers, and from producers of tallow, oil, resin, alcohol, and generally of everything connected with lighting" call upon the French government to take protective action against the unfair competition of the sun. They argue that forcing people to close "all windows, dormers, skylights, inside and outside shutters, curtains, casements, bull's-eyes, deadlights, and blinds - in short, all openings, holes, chinks, and fissures through which the light of the sun is wont to enter houses" will lead to a higher consumption of candles and related products. In turn, they reason, the industries that those in the lighting industry depend on for materials will have greater sales, as will their dependent suppliers, and so on until everyone is better off without the sun. This satirical essay suggests that forcing people to pay for something when a free alternative is available is often a waste of resources. In this case, the money that people spend on additional lighting products would indeed boost profit for candle makers, but because this expenditure is not required, it is wasteful, and diverts money from other products. Rather than producing wealth, instituting the candle maker's petition would lower overall disposable income by needlessly raising everyone's costs. Similarly, using tariffs to force people to pay more for the domestic goods when cheaper foreign imports are available allows domestic producers to survive natural competition, but costs everyone as a whole. Additionally, the money put into an uncompetitive company would be more efficiently placed into an industry where domestic companies have a competitive advantage. (To learn more about the theories that have shaped economics, read The History Of Economic Thought.)
It is better than allowing cheaper imports and giving food stamps to displaced workers because people lose their, faith in the system, their tough with production and are demoralized. Your argument does not stand. As far as the video, it is a very simplistic and even wrong assessment of how the economy works because it looks at it as a closed system apart from trade imbalances and currency manipulations. More importantly it does not define what âincreased productivityâ means. Does it mean buying a robot and displacing 100 workers?
China is the prime example. China has more tariffs, more protectionism than the USA, and is somehow growing their economy more than the USA. So protectionism is good? :eek: