What if Tarriffs to Protect the US Manufacturing Base Were Imposed in the 60s/70s?
- Thread starter Omar04
- Start date
Possibly we would have to choose tariffs on things that we export very few of the item that way if the other countries don't buy then we don't lose that many sales. If you do it on things we explored a very lot of you risk retaliation that's going to be worse on us than them of tariffs. Another possibly safer way of doing in would be if country X is placing tariffs say 20% of the value as an example then we could safely Place 20% against them especially if it's items that the u.s. is very much the world leader in
kernals12
Banned
It wouldn't work. The dollar would rise in value making imports cheaper and we'd be right back at square one, except a few favored companies would benefit. The thing about free trade is that the benefits are invisible and dispersed while the costs are visible and concentrated. Cheap imports disproportionately benefit those with low incomes.
RousseauX
Donor
Outsourcing and offshoring wasn't that big of a deal in the 1970s, what actually happened to manufacturing jobs is that they moved from the north (where urban decay happened) to the south, so auto-plants closed in Michigan etc but went to Tennessee and other southern states where wages were cheaper.
The real impact form foreign trade came from NAFTA and China's entry into the WTO.
kernals12
Banned
Manufacturing jobs were replaced by better paying service jobs. And what do you mean by "the American city" it seems to me this was solely a rust belt phenomenon. That most American of cities, New York, has a record number of people.
This empowers fordist labour, organised and disorganised, at the moment when US capital as a system is casting about for ways to discipline and emiserate labour; and, testing them in Chile etc.
Improbable without a revolution in a Western European country of greater impact than Mai '68. You don't buy off the weak.
Improbable without a revolution in a Western European country of greater impact than Mai '68. You don't buy off the weak.
In many cases, the opposite is actually the case. Well-paying manufacturing jobs with benefits were replaced with lower paying jobs with no benefits. This was particularly true as deindustrialization hit the northern US in the mid-70s and manufacturing moved to the less unionized south. This would be the classic "former union auto worker in Michigan now working in fast food for minimum wage" scenario.
kernals12
Banned
That scenario may make for good newspaper articles, but it's not a representative case. 1 million people have left Detroit and presumably have found better life elsewhere.
Another impact is the rising productivity of the American workers. I remember doing a lot of productivity exercises during the 80's and 90's. Sometimes it was as simple as scheduling jobs in a sequence that minimized machine changeover. We also did analysis of bottlenecks and how to eliminate them. There was automation and equipment upgrades. While the more people were hired at the factory, the amount produced climbed at a higher rate.
FillyofDelphi
Banned
±
This, though I'll have to add the proviso that this pattern of free trade and currency floating really only works in a somewhat stable and secure global financial-commercial environment. A US adopting a Protectionist stance is one in which Breton Woods is likely starting to wane, and the knock on effects from that have a very real chance of shifting the global business climate to one where a merchantilist approach makes more sense.
Free Trade is a great game so long as everybody is playing by it's rules. The larger share of the game is "cheating",though, the less benefical it becomes to those still trying to play fair until it's effectively penalizing
Presumably. Here are some facts based upon my life experience and current day travel through the region.
I'm from the area and lived through the 70s and 80s there. Most of them did not find a better life. Much of the population outflow from Detroit proper went to the suburbs, some went south. Few auto workers wound up with an improved standard of living after it was all done; industrial jobs in the south paid less and service jobs in the area paid much less. And this was repeated in cities all across the Midwest. Toledo, Flint, Lansing, Youngstown, Pittsburgh, Akron, Cleveland, Milwaukee, etc. were all hard hit by deindustrialization. This really hit the middle class hard and it was downright cruel to middle-aged workers. This remains a very sore subject with me since the human toll from all this was enormous and I saw it myself. The economic base of these cities was ripped away, leaving human misery in its wake. The idea that a laid-off auto worker pushing 50 was going to find a better life was a tenuous proposition from the beginning and the reality is that many of these people had their lives shattered by this. Few of the people really recovered and the same is true for these cities. Out of those I listed, only Pittsburgh is really doing well these days, on the strength of a strong health care economy, a couple of very good universities and something of a tech sector. The rest are going on 40 years of economic struggle.
FillyofDelphi
Banned
Currency manipulation, internal state investment in/favor towards domestic industries, "sweetheart" exceptions on environmental regulations; basically using state resources to give an unfair advantage to your own export-oriented industries. Yes, it shrinks the overall pie size of the global economy, but it also insures your domestic producers can capture a larger share of the market if you're artifcially boosting your compedativeness relative to the rest of the world.
RousseauX
Donor
But all you are really doing is subsidizing consumers in other countries
currency manipulation basically makes your goods cheaper to buy, government subsidies have to come from your own actually productive sectors and in the end translates into discounts for other countries
FillyofDelphi
Banned
In the short run, yes. In the long run, you're still artifically tileting the market to your advantage by facilitating an otherwise unnatural flow of capital in exchange for labor ("Converting" between the two so far as your domestic economy is concerned) which over any extended period reduces the portion of the producer's productivity that goes back to the worker relative to what it was before while raising that of your own producers; ultimately benefitting them as consumers especially if, at a later point, your policy changes. Its important to remember that in the vast majority of cases people aren't just consumers or producers; they're bothing, and their capacity as the later directly impacts their capacity as the former.
kernals12
Banned
Complaining about all of that is like complaining about all those kids stealing Tom Sawyer's fence painting job. The people who receive those subsidized goods benefit at the expense of taxpayers in the country doing the currency manipulation. And the people whose jobs are displaced can find other things to do.
I must agree with @Apollo 20 on the OTL situation. Whether tariffs would have prevented that remains open. What you're looking for is a way to raise wages in the south while accompanying modernization in the North with structural help.
Marc
Donor
I wonder why people never contrast and compare the American industrial experience to the German one. The latter somehow managed to thrive, while the US suffered - and it had little to do with tariffs for Germany, a lot to do with a leadership that made an active commitment, a national industrial policy if you will.