[maximus-decimus]

But if they literally have free clothing, doesn't it make that local industry useless? Literally provides no value at that point. This only seems like a problem to me if people literally can't provide value in any other way. To which the solution would seem to create a new type of industry, not create an artificial need by creating a clothes penury on purpose.

[kube-system]

If you put a shoemaker out of a job and give them free shoes, they now can’t afford anything other than shoes.

Economies grow prosperous when there are more opportunities for economic exchange.

[maximus-decimus]

But my point is, why isn't the solution to create more jobs that aren't shoe-making so that they can contribute to the economy in a new way (idk, making yoyos) and now they have both yoyo's and free shoes?

[kube-system]

That is the ultimate solution. But it’s extremely difficult to leapfrog any steps in the process of advancing an economy. It’s hard to take a shoemaker and turn them into a scientist. Usually it’s a better idea to give the shoemaker a good shot at turning their kids into scientists.

[paulmd]

the terrible thing about economics is that it's very complex - "the parable of the broken window" is only a parable. the entire field of keynesian economics says that yes, you can break a window and then pay someone to fix it and increase net economic activity, as long as it's not crowding out actual economic activity that would otherwise have occurred. the "burying jars of money in the desert and paying people to dig them up" is precisely a broken window, economically speaking, and that's just a parable too.

in the real world domestic workers don't all go on to become farmers (oops that's dumped onto by subsidized western businesses too) or some other business... some degree of protectionism has consistently worked well to the extent it's arguably necessary*. And don't take this as me defending sweatshops either ;) but a moderate degree of protectionism and public investment has very consistently allowed countries to move beyond the absolute basic "we have sweatshots and scrap out old electronics and recycle garbage" stage of development. Neoliberalism and free trade will suck away any public investment you give it the opportunity to, and engineer around any comparative advantage you can find.

[hgsgm]

Keynes' point is that money stimulates economic activity, breaking deadlocks. Paying people to do useless work is only helpful because it is more socially acceptable than paying people to do no work. In no case is the useless production valuable.

[kube-system]

In a practical sense this is pretty avoidable for the general population, however. Because you just choose something that would be useful, e.g. public works.

[joshuaissac]

In isolation, yes. It is better for the locals to get clothes for free than for local resources (whether capital or labour) to be expended to produce them locally.

But having a strong textile manufacturing industry promotes the development of other adjacent industries (e.g. dyes, chemicals) that would not be able to stand on their own initially, and can output products that are useful to more than just textile manufacturing. It easier to develop a new industry if the country already has other industries that can support its growth.

In a sense, it is like a tax on clothes, paid by the consumers, funding textile-adjacent industries, but directed by private actors rather than the government. If it pays off, other things become cheaper and potentially offset the increased cost of clothes.

[hgsgm]

The government can raise taxes from Al the people who aren't wasting money on shoes to pay for all that extra industry that they want to subsidize.

In no way is being poorer the solution to not being able to afford things.

[joshuaissac]

Poor countries are generally bad at collecting taxes,[1] and what little is collected is at risk of being pocketed by officials due to higher levels of corruption.[2] Subsidies may also fall afoul of WTO obligations.[3] Besides, Western countries also have anti-dumping regulations that are in practice used to shield domestic industries being damaged by cheaper imports.[4]

1. https://www.brookings.edu/blog/future-development/2015/04/30...

2. https://bigthink.com/technology-innovation/are-poorer-countr...

3. https://www.trade.gov/trade-guide-wto-subsidies

4. https://www.semanticscholar.org/paper/Ten-Years-of-Anti-dump...