Milton Friedman on free trade and the steel industry

[myp]

I have been watching a lot of Friedman's videos on youtube recently and I really suggest them to anyone interested in economics and the unintended consequences of restricting trade.

This particular one is on free trade and steel, in which he combats the still very prevalent misconception that free trade vs. China or India would hurt the United States.

[YOUTUBE]j0pl_FXt0eM[/YOUTUBE]

 

[DodgeFB]

He spins it very well, but I don't agree. It seems everyone must first get money from us, so they can buy stuff from us with our own money.

 

[myp]

He spins it very well, but I don't agree. It seems everyone must first get money from us, so they can buy stuff from us with our own money.

The arguments against protectionism are extremely strong economicly with tons of studies over the years and nearly no economists arguing that protectionism helps even the country issuing the tariffs and restrictions. These restrictions only get passed and these ideas popularized because of the money the special interest groups send to the politicians and the pleas they make to the public to sell it such as "this industry will lose all their jobs". In reality the only benefactors are said industry and special interest groups.

Why take one side over another without any evidence other than mere intuition? This has been a heavily studied matter for decades.

The failures of such policies are also seen very clearly historically, especially with India and China before their capitalist pushes. They learned their lessons and are moving away from that protectionist past- we seem to be going the other way.

 

[DodgeFB]

They learned their lessons and are moving away from that protectionist past- we seem to be going the other way.

Could that be because the US loses their ass on most of these "free trade" deals? What ever the studies show, things are not working out in our favor. I may just be stupid. But I don't see where what we are doing is working.

 

[myp]

Could that be because the US loses their ass on most of these "free trade" deals? What ever the studies show, things are not working out in our favor. I may just be stupid. But I don't see where what we are doing is working.

Well tariffs and domestic subsidies are passed by the US and no one else has a say in it- it is domestic policy.

 

[DodgeFB]

Well tariffs and domestic subsidies are passed by the US and no one else has a say in it- it is domestic policy.

Well ya can't find anything wrong in our "domestic policy". Everything is working so well for us.

Let me just do a little "ol guy" thinking here. If what we have been doing is not working, and we keep doing the same things when does it get better? If I am doing something and going down the toilet I may try something else. And we all need to decide if we are satisfied with the results. I for one feel like I am watching a wreck as far as the country goes.

 

[myp]

Well ya can't find anything wrong in our "domestic policy". Everything is working so well for us.

Let me just do a little "ol guy" thinking here. If what we have been doing is not working, and we keep doing the same things when does it get better? If I am doing something and going down the toilet I may try something else. And we all need to decide if we are satisfied with the results. I for one feel like I am watching a wreck as far as the country goes.

Our domestic policies include things such as tariffs on steel so that US steel can have more market power, subsidies for agriculture, tariffs on autos, and countless others. That is what I am arguing against here.

You say you are watching the country go into a wreck and while it is just a correlation (at least until you attach some data and empirical data to it- some which is certainly out there, but let's assume it's not), this is happening over a period of time where free trade has been REDUCED with tariffs, regulations, etc. So how can you blame free trade?

 

[DodgeFB]

Our domestic policies include things such as tariffs on steel so that US steel can have more market power, subsidies for agriculture, tariffs on autos, and countless others. That is what I am arguing against here.

You say you are watching the country go into a wreck and while it is just a correlation (at least until you attach some data and empirical data to it- some which is certainly out there, but let's assume it's not), this is happening over a period of time where free trade has been REDUCED with tariffs, regulations, etc. So how can you blame free trade?

Let's " assume" it's not free trade. Let's " assume" it is all going well and everyone's future is safe.

 

[myp]

Let's " assume" it's not free trade. Let's " assume" it is all going well and everyone's future is safe.

If there is not free trade and if correlation and numerous empirical studies suggest that protectionism hurts the citizens, then how can you argue against free trade, especially when you have no proof other than a hunch. I just said let's assume to make the argument simpler- I was giving you a better scenario to argue in- if you don't want to assume and want to use data, then you will have a tougher time arguing your case because the data is on my side.

 

[DodgeFB]

If there is not free trade and if correlation and numerous empirical studies suggest that protectionism hurts the citizens, then how can you argue against free trade, especially when you have no proof other than a hunch. I just said let's assume to make the argument simpler- I was giving you a better scenario to argue in- if you don't want to assume and want to use data, then you will have a tougher time arguing your case because the data is on my side.

I am not arguing a side for me. Either way it is too late to help me or hurt me. But just a few years ago I was a big fan of free trade. Now I just go by results. I don't like the results. It is not that hard to understand. It does not require 20 links and pages data. We all know data can be presented to show different things. I sometimes like to think for myself. Not see what the experts think.

 

[myp]

I am not arguing a side for me. Either way it is too late to help me or hurt me. But just a few years ago I was a big fan of free trade. Now I just go by results. I don't like the results. It is not that hard to understand. It does not require 20 links and pages data. We all know data can be presented to show different things. I sometimes like to think for myself. Not see what the experts think.

Well what results that you see that makes you think free trade has been bad?

The data doesn't tell you to think one way or another- at least not for me. I look at the data to understand the situation and then think for myself to come up with a conclusion. But, when it comes to systematically sound empirical studies, it is hard to not place weight on the results.

 

[DodgeFB]

Well what results that you see that makes you think free trade has been bad?

The data doesn't tell you to think one way or another- at least not for me. I look at the data to understand the situation and then think for myself to come up with a conclusion. But, when it comes to systematically sound empirical studies, it is hard to not place weight on the results.

See there is the difference. We come from different generations. You are younger than my grandson.

First 50 years of my life there was no net to Google data. Sure we had libraries and reference books. But the "data" was outdated by the time it was published. So I can't expect you to understand how I think. What seems to be a puzzle to you is so simple to me. Like apple or cherry pie. I know data says one is better than the other. I don't care. I know which one I like.


If I had to think about "empirical studies" on how I live my life I would blow my brains out today! I do not mean this in a mean way. But I think all these "studies" sound or not get in the way of people using their own judgment. I would call it a "herd"mentality for lack of a better word. This to me is the cause of turning people into "sheeple". I repeat I am not saying this as a put down to anyone. Anyone with access and the ability to mess with the data could change the world. Because too many depend on data in place of their own common sense.

 

[myp]

See there is the difference. We come from different generations. You are younger than my grandson.

First 50 years of my life there was no net to Google data. Sure we had libraries and reference books. But the "data" was outdated by the time it was published. So I can't expect you to understand how I think. What seems to be a puzzle to you is so simple to me. Like apple or cherry pie. I know data says one is better than the other. I don't care. I know which one I like.


If I had to think about "empirical studies" on how I live my life I would blow my brains out today! I do not mean this in a mean way. But I think all these "studies" sound or not get in the way of people using their own judgment. I would call it a "herd"mentality for lack of a better word. This to me is the cause of turning people into "sheeple". I repeat I am not saying this as a put down to anyone. Anyone with access and the ability to mess with the data could change the world. Because too many depend on data in place of their own common sense.

But what is it that turns you off to free trade then? What have you seen that makes you think it is bad?

And the use and analysis of data is not something new. Academically, it was extremely important in your generation and the one before that and the one before that. Heck, Milton Friedman is probably before your generation (born in 1912) and certainly wayyy before mine. Data has always been important in science and industry. Inventors use it to test their products, companies to predict their profits, etc.

In fact, you and I use such data, evidence, and facts in everyday life when we judge opportunity costs, place value, or think about what we want. If someone offers you $10 for something and another offers $7, you will take the $10. That is not some mere coincidence. You used your experiences and what you know about the world to decide that. In looking at studies, this is what you do- you test something in the real world and then you try to make a logical conclusion based on that. It is just like what we do in our everyday lives except the subject matter might be different. This is not what leads to "sheeple". What does is not looking at data, not thinking logically. Because all that leaves is dogma and ignorance. That is when people become susceptible to snake oil salesman tactics from politicians and the like. Sheeple are almost by definition people who stop thinking and do what they are told. Considering data and history constitutes thinking- just picking a side because it seems good does not take nearly as much thought.

No disrespect intended to anyone here either by the way.

 

[DodgeFB]

But what is it that turns you off to free trade then? What have you seen that makes you think it is bad?

And the use and analysis of data is not something new. Academically, it was extremely important in your generation and the one before that and the one before that. Heck, Milton Friedman is probably before your generation (born in 1912) and certainly wayyy before mine. Data has always been important in science and industry. Inventors use it to test their products, companies to predict their profits, etc.

In fact, you and I use such data, evidence, and facts in everyday life when we judge opportunity costs, place value, or think about what we want. If someone offers you $10 for something and another offers $7, you will take the $10. That is not some mere coincidence. You used your experiences and what you know about the world to decide that. In looking at studies, this is what you do- you test something in the real world and then you try to make a logical conclusion based on that. It is just like what we do in our everyday lives except the subject matter might be different. This is not what leads to "sheeple". What does is not looking at data, not thinking logically. Because all that leaves is dogma and ignorance. That is when people become susceptible to snake oil salesman tactics from politicians and the like. Sheeple are almost by definition people who stop thinking and do what they are told. Considering data and history constitutes thinking- just picking a side because it seems good does not take nearly as much thought.

No disrespect intended to anyone here either by the way.

1. I do not trust the data!. I do not trust talking heads, college professors, (Some of them we called hippies in the 60s) and I do not trust anyone's government.

2. Just look at the clowns we have running the world today! WE even have flashers making policy. To me the elected officials we are seeing posting their gear on line are no different than the homeless flasher in the Walmart parking lot. They just have a degree.

3.This is all I will say on this subject because we are both set in stone with our opinions. I have already lived 60 years with mine and you have yet to see how yours turns out.

 

[myp]

So basically you trust nothing other than your intuition? I know you have been intuitively wrong during some part of your life, we all have, so do you not trust yourself either?

There is probability in everything- many studies publish everything from procedural info to results to error and it is all about just the probability of things. Ironically, thinking the way you do and living life in intuition is almost certainly statistically less likely to be truthful than looking at actual experiences and numbers. But to each his own, I suppose.

Just a last point- don't say your generation was not big on data because it absolutely was, at least in the people who made great strides in fields such as medicine, technology, energy, etc. Thankfully they placed faith in data and science and it worked out better for all of us. I have the data to prove it

 

[DodgeFB]

So basically you trust nothing other than your intuition? I know you have been intuitively wrong during some part of your life, we all have, so do you not trust yourself either?

There is probability in everything- many studies publish everything from procedural info to results to error and it is all about just the probability of things. Ironically, thinking the way you do and living life in intuition is almost certainly statistically less likely to be truthful than looking at actual experiences and numbers. But to each his own, I suppose.

Just a last point- don't say your generation was not big on data because it absolutely was, at least in the people who made great strides in fields such as medicine, technology, energy, etc. Thankfully they placed faith in data and science and it worked out better for all of us. I have the data to prove it

Sure ya do. I remember granddaddy spending hours on the ol steam powered computer. I am sure you know much more about my generation than I do. But what you know you got 2nd handed. I lived it.

So long my young friend. As I told you before. My opinion means nothing anymore. I leave it to the one's that have it all to win or lose. Good luck to you all! You will need it.

 

[myp]

Sure ya do. I remember granddaddy spending hours on the ol steam powered computer. I am sure you know much more about my generation than I do. But what you know you got 2nd handed. I lived it.

So long my young friend. As I told you before. My opinion means nothing anymore. I leave it to the one's that have it all to win or lose. Good luck to you all! You will need it.

I'm not saying I know more about your generation- far from it. But you can't deny that scientists in your generation believed in science

 

[DodgeFB]

I'm not saying I know more about your generation- far from it. But you can't deny that scientists in your generation believed in science

Why does everyone think I am denying things I just don't like? I know as far as medical my generation of know it all smart ass doctors ruined my life.

 

[?thelfrith]

The arguments against protectionism are extremely strong economicly with tons of studies over the years and nearly no economists arguing that protectionism helps even the country issuing the tariffs and restrictions.

A mercantilist approach, where there is a deliberate attempt to ensure a trade surplus, can help an economy within a Keynesian context. We just need a situation of mass unemployment. The problem though is that we can expect retaliation, with the result likely to be rather negative

There is, however, a very big argument in favour of protectionism: the infant industry hypothesis (where short term protectionism can enable an industry, through 'learning by doing', to acquire economies of scale such that they can compete with international prices). However, that's very much focused on how trade can be used to encourage economic development.

 

[myp]

On the infant industry hypothesis: the problem with that has historically been that the industries that lobby for those tariffs never stop and most of the time those short-term tariffs end up becoming permanent. But, let's assume that didn't happen and the politicians actually followed through on the original plan to end the tariff- even then by imposing that tariff, you are effectively hurting every other industry in the domestic market that relies on the goods of that industry for their own production. In addition, the infant industry tariffs only apply to those industries which have grown enough to gain a name and lobby the government- what about all the industries that never got big enough to do that or are still only ideas written on paper? How does the government choose what industries are right to support with tariffs and which aren't? Naturally, the price mechanism would take care of it in the market, but there is no way any group of people or even modern computers can do that.