It is a mathematical and economic fact that countries operating under a system of free trade achieve greater welfare as a whole than if that same country were to operate under a system of legally imposed barriers against trade.
The supremist south of 1860 was not interested in the good of the whole country, just its own section. Lets use one simple example from that era to illustrate my point. In 1856 when southern Democrats LOWERED tariffs and added goods to the Free List, the industrial sector of Great Britian quickly undercut American producers of iron for the railroad. This quickly led to the recession (some say depression) of 1857, and the early rise of the Republicans in 1858.
But since we're mixing the past with the present lets use another simple modern example. According to you it is better to buy all our mechandise today from Communist China (just because its cheaper,) than it is to protect our domestic industries, or trade with countries whose comittment to democracy we wish to support. So what if China uses prison labor, or persecutes christians, etc.
Protective tariffs are very much part of capitalist economic theory, and are rational in many different situations. Furthermore, it was rational for mid 19th century America to be mildly protective of its fledgling major industries. But the supremist south with its backward single commodity ecomony and its eyes on other countries land and resources, wasn't interested in trying to achieve greater welfare as a whole, was it?
When you look at the deep south today, its funny how strong those confederates states are toward protection of their sugar subsidies, their textile industry, etc.. Why don't you preach some of that Ricardo theory to them? Tell'em Jeff Davis said it was a good idea. (Lol).
If that is your belief, make your case on why you consider it to be so. In the meantime, I need only note that it is the entire basis of modern trade economics. None of the competing theories come anywhere near it in reach. Not Smith's absolute advantage model, not hecksher-olin, and certainly not the mercantilism you peddle.
Adam Smith stated years before that protective tariffs, while rational as economic policy, should not be applied to "products of the soil".
And on matters of trade, Smith's theories were flawed. They failed to recognize comparative advantages.
Far from being "economic nonsense", protective tariffs are well represented in capitalist economic theory.
Not among economists! Trade is in fact the one area of that field where there is virtual unanimaty of consensus between competing schools of economic thought. Even the Keynesians on the left have consented that protectionist tariffs are, in almost all cases, illegitimate as economic policy and in conflict with the capitalism that even they admit to work best when it comes to trade.
The supremist south of 1860 was not interested in the good of the whole country, just its own section.
And it was perfectly rational for them to be so, just as it is rational for people to pursue self interest to this day. Your argument encounters problems though because the policy of free trade that the south advocated for itself out of its own interest also happened to be in the interest of the nation as a whole.
Lets use one simple example from that era to illustrate my point. In 1856 when southern Democrats LOWERED tariffs and added goods to the Free List, the industrial sector of Great Britian quickly undercut American producers of iron for the railroad. This quickly led to the recession (some say depression) of 1857
Bullsh*t. The panic of 1857 was caused by shifts in the world market as a result of the conclusion of the Crimean war and by corruption-induced industrial troubles at home in America. Specifically, as the war concluded the wheat demands it had created bottomed out. Overproduction occured and the wheat market collapsed causing an economic setback at the exact same time the continental European banks were being adversely affected by the war's conclusion. At the same all this was happening, several major railroad embezzlement scandals hit the fan shaking up their creditors on Wall Street, all of them already uneasy due to the wheat problem and shaky banking state in France. The banks then panicked and a recession set in. Northerners at the time fraudulently used the panic as an excuse to promote their illegitimate tariff policy, but practically all credible economic studies of the recession place the causes of it in those areas I just described.
But since we're mixing the past with the present lets use another simple modern example. According to you it is better to buy all our mechandise today from Communist China
No, not necessarily. There are some areas where China has comparative advantages that we may benefit from by doing trade, but that does not mean we should get everything from China nor COULD we get everything from China if we consciously set out to do so. As for their communist political system, it may be legitimate cause for sanctions of various degrees against China itself. That much I do not dispute. But those sanctions should come in the form of imposing trade barriers on them instead of imposing barriers on ourself to "protect" us from them.
Protective tariffs are very much part of capitalist economic theory
Nonsense. They constitute nothing more than government intervention to distort a free market and government action to redistribute wealth. Both of these items are directly in conflict with free market capitalism by their very nature.
and are rational in many different situations.
Not really. The legitimate uses of protectionist tariffs are extremely few and generally apply in only a limited number of foreign policy-related cases. 99% of the calls for protective tariffs are not among these cases and are economically illegitimate arguments.
Furthermore, it was rational for mid 19th century America to be mildly protective of its fledgling major industries.
No it wasn't. Protection of fishing diminishes the consumer surplus by raising the price (we'll denote that as "C"). A portion of that consumer surplus is redistributed to the producer surplus (denoted as "P"), though far from all of it. Of the remainder of C-P, it divides between two parts. The first is that which returns in a small ammount of government revenue (we'll call this "G"). The remainder is a dead weight loss that escapes the home economy (we'll call that "L").
Expressed mathematically: C=P+G+L, or the area that shifts as a result of the tariff's price rise. Absent the protective tariff on fishing, the economy retains all of C as a consumer surplus. The economic welfare of the country without a tariff, denoted as "W," includes all of C.
Now let's look at what happens mathematically with the tariff. Subtract C from Wt (Wt means W with the tariff) because of the price rise after the tariff. P is transfered out of C to the fishing industry and returns to the economy, so add it back to Wt. You may also add G to Wt as it returns in the form of government expenditures, though they will as a general rule be spent less efficiently there.
Since L is lost, the tariff leaves us with Wt + -C + P + G. Since C = P + G + L, it may be substituted in giving us Wt + -P + -G + -L + P + G. Combine the terms, and Wt = -L. That makes Wt < W
Hence the nation's welfare with the tariff is less than the nation's welfare without it.
When you look at the deep south today, its funny how strong those confederates states are toward protection of their sugar subsidies, their textile industry, etc..
Not exactly. The former CSA states are almost all Republican now save a few Democrat holdovers who win reelection on 90% black votes combined with a Democrat minority among everyone else. Republicans as a general rule tend to vote free trade in Congress. Where they push for tariffs, it is generally through Democrats like Mary Landrieu.
Why don't you preach some of that Ricardo theory to them?
Cause most Republicans already understand it and vote in support of it. I suppose I could try with the 'rats, but I don't believe I'll have any success. No ammount of truth will sway a 'rat when he is bought and paid for by the AFL-CIO and the NAACP to vote otherwise.