[mardifoufs]

Latin america and even india are proofs that "pure" protectionism does not work. Even China is an example of free trade working. China opened up massively, reduced customs, reduced costs of doing business etc for 3 decades before moving towards more restrictive and more protectionist policies. After learning as much as possible from foreign corporations that flocked to China. Even now, free trade would be much more beneficial to china economically if it wasn't for the current geopolitical situation. Of course it was very far from a totally deregulated free market, but the Chinese government craved foreign investment for most of the 1990s-2000s and did everything to attract it. India on the other hand has a very bad reputation when it comes to international investment because of it's famously poor economic (and protectionist/populist) policies that made investment very risky.

It's very hard for a country like India or Argentina to actually innovate when they restrict themselves to a local pool of knowledge, talent, and experience. And that's precisely why India has lagged far, far behind China even if they were ahead in the 1970s-80s. You don't want to reinvent everything all the time, it just isn't possible without lagging far behind and that's what happens with protectionism.You will almost always end up with a low skilled economy with basic economic output (like beverages or commodities).

It's easy to totally replace coca cola with local alternatives, it's impossible to do for sectors like semiconductors or finance when you have to start from almost 0 because no one wants to invest in a protectionist economy.

[hristov]

Latin America is an example how the "free market" theory as espoused by the washington consensus is very bad for developing nations. Latin America is the region that most closely follows the washington consensus and they have suffered for this mightily for this over the post ww2 years.

There were little spurts of protectionism in argentina and brasil but those happened only around the 2000s and only as a reaction after many years of gutting the countries under free market policies.

Holding China as an example of free trade success is a little wrong, to say the least. Post ww2 China has always had a very carefully crafted protectionist policies, and while they did open up majorly, they are still very protectionist by almost any sane international standard. Lets not forget that even now to start any significant business in China you need to make sure that Chinese nationals own a majority of your business.

India liberalized much more than China during the 80s and 90s, so if you want to make that comparison, India should be on the free trade side. In my opinion though the Chinese economic success in comparison to India had much more to do with domestic social policies. China simply did the best to ensure that despite wide spread poverty most people have access to education, clean water, modern medical services, modern telecom and transportation infrastructure, etc. India, on the other hand, as part of their "modernization" gutted social programs (again, listening to the Washington consensus) and they still have a vast part of their population in a more or less pre-industrial state of education and development.

[wslh]

> There were little spurts of protectionism in argentina and brasil but those happened only around the 2000s and only as a reaction after many years of gutting the countries under free market policies.

On the contrary. Brazil and Argentina are super protectionists and never had a free market economy in the last decades. Free market means entering product from other markets with a near zero tariff. For example, the price of a notebook in theses markets is 2x the price in US, and always worked like that. For an Argentinian a top of the line 13" MacBook Pro in US at USD 2k is cheap because in Argentina that will cost more than USD 4k. There were arbitrary cases (e.g. clothes) where in the 90s the imports from China broke local factories but never a free market economy but an arbitrary market economy.

[unishark]

> There were little spurts of protectionism in argentina and brasil but those happened only around the 2000s and only as a reaction after many years of gutting the countries under free market policies.

Have you tried selling software or licensing technology to companies in Latin America? In my experience you will need to double or triple your prices because pay a majority of your income in protectionist taxes.

The result is they have local companies selling some select technologies we have, and little or no access to most technology we have.

[mardifoufs]

Of course liberalization isn't magical and does not solve all economic problems. There are tons of reasons why India failed in its liberalization program, lack of focus and coherent policy being the most important ones. Now of course China is far from your standard free market, but as you said, they have been enforcing a very strict protectionist policy for most of the 20th century. And for most of the 20th century, china really was full of misery and abject poverty which is something that only ended with a relatively incredible opening to the world's markets.

I also should've been more clear, what I'm talking about is more free movement of goods than the libertarian definifion of free markets. You can import and export goods in China pretty easily, but it's a nightmare in countries like Argentina. You are (or were, until recently) also relatively safer in china, when you don't have to worry about sudden anti-business measures, tariffs, or outright death by targeted regulations

Also, protectionism in south america has a very long history [0], and was already very strongly enforced much earlier than the 2000s. The concept of protecting "Infant industry" is ingrained in much of the region's recent history. And again, the countries that are doing better right now in latin america have mode liberal trade policies. I don't understand how it's not outright obvious that latin america has shot itself in the foot multiple times with very inefficient, very populist protectionist policies that made competitiveness impossible and commodities/primary goods the only productive sectors.

[0] https://www.nber.org/papers/w8999

[intended]

I think you’ve made an argument for free trade, but your examples and logic don’t refute the value of protectionism.

China is a ridiculously protectionist state - people in the west had theorized that the market would force China to more opennness and democracy back in the day.

China instead found a way to run a market with Chinese characteristics - a dual contract system where the English contract holds little power, knowledge transfer, a closed media environment and more.

It’s worked too. China suggests that some players can extract the benefits of free trade and protectionist policy.

[mardifoufs]

I totally realize that China is far from liberal but it has been much more prosperous and became a superpower because it has liberalized vast swaths of the economy. I guess it would have been better to say that it's doing better than India because it moved a hypothetical protectionism-free trade slider further to the free trade side. There are tons of smart decisions from China that also made the liberalization very successful, such as understanding the vital importance of foreign capital, access to the world's markets, infrastructure investment, and slowly building up knowledge instead of going all in "in house" too quickly.

Still, none of what has been accomplished in China could've been possible with very high tariffs, obsession in homegrown industry before acquiring expertise, and obsession with policies that have always failed but still sound good to the electorate. All of which are characteristic of India, Argentina, Egypt, etc. And I'd argue that China is better when it comes to free movement of trade than India even if it's much worst in almost every other type of freedom.

[unishark]

> China is a ridiculously protectionist state - people in the west had theorized that the market would force China to more opennness and democracy back in the day.

The Chinese government has almost completely lost control of its market. They can control (and profit massively from) very narrow things like blocking foreign servers on their internet (which happens to include our largest tech companies) but otherwise it is very much the wild west over there. The political system has chinese characteristics, but the wildfire of capitalism going in is just plain capitalism, and more so than in the US in some ways.

As for whether the government can survive, this is a complicated question but sooner or later an opposition group always defeats the rulers. I wound't write this ending off yet. Or ever, really.

[adi2907]

China never allowed unfettered access to global firms. Since Deng Xiaoping opened up, the rule for a foreign firm to gain access was 1) to tie up with a local company which will have significant stake and 2) ensure technology transfer to the local company over a period. This was a pre condition for market access, and basically how electronics components makers were built. The recent stars like Huawei, Xiaomi and Lenovo could only be built once the supply ecosystem was local. You will not find a single example of any country becoming developed following free trade except for island nations like Singapore

[jariel]

" You will not find a single example of any country becoming developed following free trade except for island nations like Singapore"

Canada, Australia, New Zealand and in reality, the US as well.

The US has always been pretty open.

But yes, if a nation is in shambles, it may very well make sense to make major strategic investments for the national good, but ultimately, it can't last.

Korea, Japan etc. would be much poorer today if they had continued to manage their economies in a post-war fashion.

[bobthepanda]

The US being open is mostly the postwar period. Tariffs were huge pre-WWII, in fact the Great Depression was probably exacerbated by rounds of tariff retaliation: https://en.wikipedia.org/wiki/Tariff_in_United_States_histor...

[rodgerd]

New Zealand has fallen further and further behind its nearest neighbor over the time it's taken a hard-line free-trade position.

[postingawayonhn]

That's not a very critical look at the situation.

Australia has major advantages when it comes to natural resources and geographic proximity to Asia. There's also major structural issues with the Australian economy with significant agitation at present for major taxation and industrial relations reform.

[mardifoufs]

As I said, China is now able to afford protectionism because of a much more foreign investment minded policy than India. It's weird to only focus on protectionism being a positive when almost all of the more protectionist countries are way behind economically. China has been the most successful when it has had the least closed economy and it didn't start producing Lenovo laptops because of protectionism. If that was the case, why don't we have Indian or Argentinian laptops by now?

Arguing that protectionism is good because you are producing beverages when the downside is literal decades lost to anemic growth and poverty is just missing the forest for the tree. India was at a similar but better place than China was, but China embraced foreign investment, liberalization, low friction to trade. And india got totally leapfrogged. Things are changing now, but for a while China was definitely much safer to invest in than India since the whole country was hellbent on not interfering with foreign investing. You were (and still are) much more likely to get your investment made worthless by aggressive "local at all costs" policies in India than in China. Look at what happened to Walmart recently. India wants desperately to skip the "industrialization" and foreign ownership phase and go directly to where china is now, but that's ignoring 30 years of smart policy in China.

Keep in mind, free trade and free international markets still allow for a very regulated economy and socialist policies. So protectionism, by reducing prosperity and investment actually cripples social programs. Scandinavia is known to be "social democrat" but still has a very open economy. Prosperity has been mostly induced by free movement of goods. Of course, China does not want to keep being a manufacturing only economy, and is moving towards a service oriented one. But that's what always happens

[imtringued]

I agree with your comment. First you want to drag your country up to the same level everyone is at. Usually this is done by letting investors into your country because they will do the same thing they did at home. Only once the investors have established a profitable and self sufficient industry it is time to kick them out.

Someone also mentioned that Brazil is putting tarrifs on foreign goods. This is fine but there should be an exemption for foreign companies operating within the borders of your country. The exemption would apply to products assembled within Brazil. That way Apple could decide to build a factory in Brazil and provide job opportunities.

[markdown]

> You will not find a single example of any country becoming developed following free trade except for island nations like Singapore

So you will.

[systemvoltage]

Easy to prove the point: Stop importing semiconductors and see how India or Argentina would fare.