Military Self-Sufficiency
- not economic, political and military
- need to preserve industries that are essential for national defense
- point: when you do this, you will incurs economic costs
- what counts as "essential?"
- common in economies dependent on one or two products (Saudi Arabia)
- need to diversify at home because changes to the dependent product markets can be devastating
- not relevant to the US
- need to shelter young industries temporarily until they compete globally
- which industries will be capable of competing in the future?
- protection may not be temporary
- dumping: the sale of a product in a foreign country at prices either below cost or below the prices commonly charged at home.
- tactic for driving competitors in other countries out of business.
- US imposes antidumping duties where it find it
- hard to differentiate between dumping and competition
- tariff to "save our jobs"
- common during recessions
- idea is to protect certain jobs by blocking foreign imports
- jobs are also created, only some gone
- maintaining status quo by making neighbors poorer
- trade wars likely
- domestic workers must be shielded from counties where wages are low
- ignores the fact that trade benefits both parties
- ignores comparative advantage
- ignores differences in labor productivity
Let's talk about labor in the third world
