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Comment by amunicio | Hacker News Reader

> Why should middle class in the West vote to allow outsourcing to cheaper countries?

Because you can run but you can't hide. If you institute protectionist policies, you will in turn become less competitive. Hence, you will require even more protectionist policies, that in turn will make you even more uncompetitive. In the end, you will have higher prices for lower quality domestic products.

I don't like gravity, but it doesn't mean I can ignore it and jump from tall buildings. While economics is not an exact science (probably not even a science), you cannot ignore its principles.

If protectionist policies worked, we would have figured out by now. The truth is that limited protectionist policies might work to give a push to a nascent industry in the short to medium term. But it does hurt the country as a whole in the long term.

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> If you institute protectionist policies, you will in turn become less competitive

less competitive against whom? If West had not shipped its factories to China, I am sure West would have still stayed competitive against China by miles. In fact, by shipping its technical know-how for manufacturing, West has allowed China to become more competitive.

> I don't like gravity, but it doesn't mean I can ignore it and jump from tall buildings.

Sure, but outsourcing is nothing like gravity. It is a mixture of greed on part of corporations to reduce labor costs, naivete on behalf of politicians who thought China and others would welcome Western values along with Western jobs and stupidity on part of voters who traded short term cheap junk for long term stable jobs.

In the 1960s, US auto-makers appeared content to make crappy, unreliable cars until Japanese imports (also crappy at first) came in and improved quickly, putting pressure on the domestics to also improve.

Consumers have vastly benefited from that competition, far in excess of any losses from the domestic automaker labor group.

It’s not entirely voluntary, but if you want to see what protectionism and economic isolation will bring, go visit Cuba. Then hop over to Grand Cayman, Grand Bahama, or Puerto Rico to see what being more integrated but competitive has to offer.

If Japan had completely decimated Western car markets, had conflicting values with the US and posed a geopolitical rivalry, I would still have preferred crappy cars for the Western societies. After all, West didn't strengthen USSR via trade when there was a cold war.

Also, if the long term cost is "Western lifestyle regressing to mean" (original context I replied to), I'd still prefer crappy cars to preserve well-paying jobs.

My belief is that "isolationist economies fall well below the mean" in the long-term. If you want a comfortable Western lifestyle, you don't want to isolate yourself from global trade, but global trade means you aren't isolated from global competitive pressures.

> if you want to see what protectionism and economic isolation will bring, go visit Cuba

Hasn't its neighbour and biggest economy in the world been levying an embargo on Cuba for over half a century? Doesn't seem like the appropriate example for your argument.

It's exactly a (forced as a political matter) economic isolation situation. North Korea is another politically isolated economy. I don't think they're doing very well either.

Trade helps poorer nations more than it helps richer nations, but it helps both.

There are billions of people living under worse regimes than Cuba, yet only it and a handful of other nations have been on the receiving end of US sanctions. This was devastating to its economy (prior to the revolution it was of course Cuba's biggest trading partner).

There is no justification for the embargo. It was Cold War aggression, pure and simple, now sustained for the last decades purely because of electoral reasons.

I completely agree politically, assuming Cuba is no longer willing to host missiles or other non-defensive military apparatus from an adversarial nation.

Like Turkey hosted our missiles to hit Russia? No, sorry, I forgot, that's okay because we are good and they are bad.

>Sure, but outsourcing is nothing like gravity. It is a mixture of greed on part of corporations to reduce labor costs, naivete on behalf of politicians who thought China and others would welcome Western values along with Western jobs and stupidity on part of voters who traded short term cheap junk for long term stable jobs.

Agreed. Fundamentally, if you want to institute protectionist policies for labour, you also need capital controls to prevent all your businesses from exporting their operations to avoid these policies.

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