We’ll look at the costs and consequences of tariffs, quotas, and protectionism. How do tariffs affect consumers? What about producers? Who wins and who loses? Find
We’ll look at the costs and consequences of tariffs, quotas, and protectionism. How do tariffs affect consumers? What about producers? Who wins and who loses? Find out with this video.
We’ll apply the fundamentals we learned in the supply, demand, and equilibrium section of this course to real-world examples — like that of protectionism in the U.S. sugar industry — to determine lost gains from trade or deadweight loss, the tariff equilibrium vs. the free trade equilibrium, and the value of wasted resources as a result of tariffs.
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If there is a huge disparity in production costs (largely labor) in the US vs much of the developing world, isn't the implication that employment in the US (or any developed nation) will drop, or wages will drop dramatically? Essentially, short of a few items with technical barriers to being produced elsewhere, anything that CAN be produced elsewhere WILL be produced elsewhere. Combined with mass immigration, this then becomes a situation where any job that CAN be done by an immigrant at a lower wage WILL be. Where does this leave lower skill US workers? My conclusion is that they become socialists who simply vote themselves the wages and benefits they are no longer earning through jobs.
Yes that might be true in cases where same product is produced in developing world and in and of same quality and value. But with comparative advantage and opportunity cost, one will be better at producing one thing while the other will be better at producing other things and free trade between them will bring out the best out of everyone everywhere. Regarding the low skill labor, yes you are right. But with technological advancement, better human capital, better infrastructure capital, better organization and stability of political system, regulations and culture, even the low skill labor will have positive external support that will help them in being more productive in their work compared to those in developing world. Please correct if I am wrong.
What about the other costs of free trade such as higher domestic welfare spending? What about the non-monetary costs such as dependency on foreign sources? This has led to wars (Japan-steel and oil, US-Gulf War I) with their immense costs. What about the "hidden" costs of free trade such as the maintenance of huge navies to protect trade routes (British Empire, USA today).
Finally, I must ask, given global trade's huge technological advances, what jobs exactly will the 50% of US workers who have sub 100 IQs do for a living? And what do you expect these jobs to pay relative to the old economy of say 40 years ago?
All costs are directly and indirectly included while making a trade. Just like invisible hands, we intentionally and unintentionally tend to add the risk of everything that can be calculated and foreseeable.
With increase in number of advance/smart machines and dependence on those machines and technology, human input (labor intelligence) is less required and so even a sub 100 IQ can do good job in a high tech society.