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Posted on 04/27/2008 2:27:51 PM PDT by Behind Liberal Lines
The damage that trade restrictions cause is probably most evident in the case of rice. Although rice is the major foodstuff for about half of the world, it is highly protected and regulated. Only about 5 to 7 percent of the world’s rice production is traded across borders; that’s unusually low for an agricultural commodity.
So when the price goes up — indeed, many varieties of rice have roughly doubled in price since 2007 — this highly segmented market means that the trade in rice doesn’t flow to the places of highest demand.
Export restrictions send a message to farmers that their crops are least profitable precisely when they are most needed. There is little incentive to plant, harvest or store enough rice — or any other crop, for that matter — as a hedge against bad times.
This tendency to skew supply and demand is also apparent in the Philippines, where the government is tracking down and arresting rice hoarders, who, of course, are simply storing rice for the possibility of even harder times to come.
In commodity markets, it’s not uncommon for high demand to cause sharp increases in prices; on short notice, it’s often hard to match the new demand with more supply. The question is whether supply, and trade, can grow to offset market tightness.
Restrictions on the rice trade run the risk of making shortages and high prices permanent. Export restrictions treat rice trade and production as a zero- or negative-sum game where one country’s gain comes at the expense of another. That’s hardly the best way to move forward in a rapidly growing world economy.
(Excerpt) Read more at nytimes.com ...
Libertarian ping! To be added or removed from my ping list freepmail me or post a message here.
because free trade has done SO much for every other sector /sarc.
Nobody on this planet likes free trade except for the academics and economic elites. I’m going with the majority on this one.
Global corporate socialism.
Perhaps you could tell us how wonderfully rampant protectionism worked in the 1930’s.
The planet produces twice the food needed. The problem is distribution, as usual.
Perhaps you can enlighten the forum on how trade affected Germany’s ability to wage WWII.
And then explain why our trade with China is any different.
We have a right to be saved from ourselves. Please help...
Don't blame protectionism for stock market greed.
The so-called free traders and free market advocates are masters at ignoring every value and every thing except their neat little graphs and theories.
There is a value that has been around for centuries called: being able to feed your own people, or being independent in food production. Tribes, clans, cities, nations and most all groups of people who live together due to some shared interests have always thought it a good thing to be able to produce their own food to the extent possible.
Values like that just drive the little free trade, comparative advantage theoreticians up a wall, and it’s part of the reason that rice isn’t being traded around the world the way the free traders think it should be.
Continue to ignore these theory bound ideologues where food is concerned, and review policies they’ve managed to influence in the past.
And maybe you can tell us what’s so wonderful about trading “partners” who cheat us, poison us, and provide weapons to our enemies who kill our soldiers.
“Perhaps you could tell us how wonderfully rampant protectionism worked in the 1930’s.”
Don’t blame protectionism for stock market greed. “
And they shouldn’t forget the fact the Federal Reserve SHRUNK the money supply by around 30% the few years after the stock market crash, CAUSING many or most of the bank failures and the downward spiral of the economy in general.
http://www.hoover.org/publications/policyreview/3476271.html
That’s from the Hoover Institution, which is esteemed by conservatives.
Trade was a very minor factor, if any at all, in the Great Depression. More and more are beginning to view the Feds action are the main cause of the depth and duration.
Canadian opponents of free-trade point to: the overwhelming power of the American Empire; sharp “Yankee traders” that will con us out of everything; the inability of our industries to compete fairly with U.S. industries; the rapacious U.S. oil companies, that are out to steal our oil; etc. etc. Believe me, the rest of the world fears American competition more than the U.S. has any reason to fear competing with the world.
When I studied economics (mostly taught by American professors, using American textbooks), I learned that free-trade increases wealth. Trade is not a zero-sum game. The benefits of trade seemed to be the only thing that most economists agreed about.
Granted, not all trade deals are equal — and the devil is in the details. However, protectionism is far worse than almost any free-trade arrangement imaginable.
In the case of China — you have a point. Trade with China is different, because China kept the exchange rate for the Yen artificially low for years, while selling their under-priced goods in the U.S. market. That would be considered dumping in any trade deal & would be against the rules. It is a case of unfair trade.
However, any trade has two sides. A drug pusher has drug users; prostitutes have Johns. While China was dumping all it's cheap goods on the American market; and racking up trillions in currency reserves — why did the U.S. allow itself to go into debt to buy all the stuff. You want to be saved from yourselves — start by going back to budget fundamentals. Canada nearly went bankrupt funding socialist programs — when we finally admitted our problem, the “12 step program” to our recovery was very painful; but, ultimately worth it. We got back to fundamentals: balanced government budgets; eliminating subsidies and protectionism for inefficient industries; opening ourselves up to freer trade.
I don’t think that free trade is the answer as much as technological innovation. For instance, rice is relatively inefficient as a food crop in many ways, yet is about 1/5th of the world’s food.
Genetic modification has produced more nutritious rice, but it may have reached its peak in that there is little else that could be done to rice that would not make it more susceptible to other things in its typical environment.
So a variety of rice designed for drier climates might be the answer, growing in much the same way as wheat. This would permit larger grains and more familiar dry climate agricultural techniques. Plus it would significantly expand the arable land on which rice could grow.
While traditional rice would still be grown, the end result would be far more rice, taking a lot of pressure off of the current agricultural areas.
So Thailand and Vietnam and Cambodia and Laos, etc are being hurt by this? That’s all they grow!
I’m not against trade. I am against insane trade against our nation’s best interests. You freetraitors have caused a great many of us to dislike you intensely, when we SHOULD be aleigned.
It’s gotten to the point when I see the words Free Trade, it’s like a red cape to a bull.
Yes, free trade can never be bad, can never hurt our nation and is in every instance the cure for the world’s ills.
Tell that to the kids harmed by led paint, the U.S. Citizens killed by tainted heparin and list of other people, not the least of which those who are going to be adeversely affected by a growing menace in Asia.
The idea is that that's the way grownup free people need to be treated.
Some do, sadly
Sad. Just frickin' sad.
Nice. Very good. Thank you.
Milton Friedman would agree. For anybody not aware, you can watch all of Friedman’s amazing series, Free to Choose for free herehttp: //www.ideachannel.tv/
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