Quote from: pening on July 09, 2014, 08:28:02 PM

Quote from: Marlo Stanfield on July 08, 2014, 02:12:48 PM

Do you know of any modern of current examples of a country or a corporation doing this?

Its a very interesting question that often polarises people along ideological lines. From a pure economics point of view protectionism is bad, and letting cheap labour take the jobs is better for the wider economy as a whole as prices are kept down while profits kept up. win all round. But from a social-economic point of view, where peoples livelihoods are considered of course its not so black and white with winners and losers.

The thing that gets me is that I can imagine that in the modern world where we have multinational corporations who are extremely adept at paying as little tax as possible, that even in the pure economic and idealist view points that you outline it can still be a net loss for the country and people. Think of it like a game between three economic actors: the multinational, the country, and the people of that country. Ideally what would happen is the multinational would move jobs overseas and benefit from lower production costs, the country would benefit from more taxes from the increased profits of the multinational, and the people would lose some income in the long term but gain from the higher tax base of their country. Total economic production should increase and I think this is the way I think a lot of people think about it.

However, what I think is a more likely scenario in modern times is that the multinational reaps all the economic gain and very little of that gain if any is shared with the country or the people losing their jobs. The total amount of loss is very unlikely to be made up by the multinational since the accountants have devised some incredible clever systems for multinationals to avoid sending profits home. The global economy gains of course.

So what I suspect is that it's actually irrational for some countries to not have protectionist policies designed to maximise their economic gain. And part of the problem is, especially in a place like the US, is that it's the multinationals who are buying government officials to bend policy to their gain. And I'm pretty sure that a large part of people in the western world as actually lost quite a bit in the last 15 years of globalization. Some people have gain tremendously, but lower and middle class people? I find it pretty unlikely that they have benefited economically, despite being told for years that they would. Globally many have benefitted, but I think some governments are playing a losing game economically speaking.