👍 I agree

@@ryanwilliams9466 Cares.

@@maxwellcraig302 Who made who, ain't nobody told you?

@UCGQYRaaTp0h2DJHu0Pd8S-Q "Deez"

@@davidzubiria3783 Who?

@@maxwellcraig302 Cares.

Who?

@@maxwellcraig302 What do you mean "Who?" Him. He. Alex Tabarrok. The only person in the entire video.

Understandable yes, but the economic assumptions a floored.

Good points. But these are political arguments for tariffs, not economic ones.

@Elias Håkansson and if one particular country has been out-playing one country in particular that introduced it to the concept of free trade? Using its huge population pool that could be paid much low wages relative to the rest of the industrialized world and especially that other particular country, to the point where it now controls almost all of its vital Industries in one area or another, products, and medicines. Meaning that country, who is a rising power and wishes to overtake the other country as top dog, has created a road to doing so without firing a single shot or ever having to going to war with that other country. Essentially being able to dictate more and more of the economic and policy decisions of that country by infiltrating all its major businesses and money hungry leaders that want a piece of its ever-growing pie. In case you haven't figured it out, I'm talking about China and the US increasingly over the past several decades.

If you agree with this video, read this too.

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+shashank gupta The tax revenue is simply $0.This is because the diagram is made simple to analyse the cost and benefit to producer and consumer only. And the government does not make money out of the tax because it is simply to expensive (above the world supply) to import the good and hence it is fully provided by domestic firms.

Transportation costs have the same effect on trade as tariffs. I'm not sure what you're asking. If transportation costs make imports more expensive than domestically produced goods, then there wouldn't be any reason to trade.

+J Virgo People employed in industries that are less efficient than it needs to be - so yes, wasted resources. Those resources would have to be spent on something else if unused (assuming a free market; regulations etc prevents that from happening) You are arguing for protectionism because your government screwed up the domestic economy.

***** Nope, that's not the definition. Look it up.

***** Ah, so you mean workers don't voluntarily engage in employment? If a job that matches your skill level doesn't provide you with the wages you desire, you are free to not accept it. Just as producers are free not to produce if a product's price is not high enough to justify his costs. Your perspective on efficiency is archaic. The books you've read probably assumes that wages are equal across all areas. They are evidently not.

***** Tariffs do increase domestic production of the protected product, because domestic prices rise. If prices rise, there are going to be some producers who will produce it because that thing suddenly becomes profitable. "increase domestic production of protected product" is key here. A steel tariff will increase domestic production of steel (I picked this because it is arguably one of the most protected industry in the US). What we don't see is the decrease in the production of manufacturing equipment. This serves to increase the price of manufactured goods. Producers/Entrepreneurs can't afford new equipment -> can't create a new firm to produce or have to stick with older, more wasteful machines -> supply is lower than what it should be -> prices are higher than what it should be. "but are forced into it voluntarily" What? o_O "lack of opportunity as a result of laisez-faire government economic policy." And why did letting things be create reduced opportunity? Are you saying heavy regulations, like almost every industry in the US, is a laissez-faire policy? One has to ask why aren't people producing (either as an entrepreneur or an incumbent producer), not why aren't jobs being created. Is it government projects that resulted in wages being artificially pushed up (government demand is demand nonetheless), preventing entrepreneurs from creating long term (government projects don't last forever), profitable businesses? Government pushed up labour cost (by employing people for whatever stupid projects they can think of), resulting in people not producing, resulting in jobs not being created in the private market, thus government needs to push up labour cost again (by employing people for whatever stupid projects they can think of). It's a self-fulfilling prophecy. And another thing - nominal wages (or "wages" for you) is different from real wages.

🧠 Keith L. Thank you for sharing your thoughts. I would like to bring the following to your attention: "Confirmation bias is the tendency to search for, interpret, favor, and recall information that confirms or support one's prior personal beliefs or values. It is an important type of cognitive bias that has a significant effect on the proper functioning of society by distorting evidence-based decision-making. People display this bias when they gather or remember information selectively, or when they interpret it in a biased way. For example, a person may cherry-pick empirical data that supports one's belief, ignoring the remainder of the data that is not supportive. The effect is strongest for desired outcomes, for emotionally charged issues, and for deeply entrenched beliefs." source: en.wikipedia.org/wiki/Confirmation_bias Thank you for your valuable time, Keith L.

Hi Cornel, Unfortunately, there's not much we can do about that. You can pause the subtitles to get a better view of the graph. Cheers, Meg

You can turn off the sub by clicking cc button, subtitle has been helpful for non-english speaker like me

I get what you say. But that really falls in the hands of the consumer. Deciding on what we spend our money is a big responsibility. Even if something is stupid, or unnecessary, if people are buying it, its going to create incentives to produce more of that. I think all schools should have basic economy classes, where they teach about their power and responsibilities as consumers and producers to society. In our days we hear lots of criticism towards the producers (big corporations mainly), but we hear little criticism towards the consumers, whom are the ones that give that power to the big producers in the first place.

+Noura Ebrahim What do you mean? Higher level of what?

Bc at the equilibrium point means there is no free trade. Even with tariffs, there would still be some sort of world trade.

only if people in india are better at producing the videos. but it's certainly a good thing that there is international competition in creating educational ressources. i would be much worse of if all my education would come from germany.

Only if the guy in India has a comparative advantage in making them (they don't) :)

This is a bogus anti protectionist piece and I'm finding they almost all are. This is a manipulation that goes back hundreds of years. Protectionism is the only way. Tariff what you can produce and don't tariff what you can't. His arguments are bogus.,

Maybe Denmark's economic environment would fair better from free trade because the can't domestically produce more than they can consume. But America would benefit from economic protectionism.

TheGuyWithTheBratzDollz What president of the world? If you try and ban even the discussion of of economic protectionism I will violently rebel against your administration, 1v1 m8 irl.

There are many good reasons for tariffs. Protectionism keeps currency circulating within a country. For every dollar that gets spent outside your country you have lost wages of that amount times the number of people within the country they would have exchanged with. If an industry can no longer compete everyone has the cost of the good elsewhere plus the value of lost wages to everyone in that industry, and therefore lost wages to everyone people of that industry would have spent that money with and so on. If prices are lower globally the odds of the money coming back are lower. I bet I'm the first person you've heard this from, Nobody talks about this.

TheGuyWithTheBratzDollz Wow, you're pretty passionate about free trade. But tree trade and globalization suck.

lel

Elias Håkansson , thank you for spending your valuable time explaining economics.

🧠 "Confirmation bias is the tendency to search for, interpret, favor, and recall information that confirms or support one's prior personal beliefs or values. It is an important type of cognitive bias that has a significant effect on the proper functioning of society by distorting evidence-based decision-making. People display this bias when they gather or remember information selectively, or when they interpret it in a biased way. For example, a person may cherry-pick empirical data that supports one's belief, ignoring the remainder of the data that is not supportive. The effect is strongest for desired outcomes, for emotionally charged issues, and for deeply entrenched beliefs." source: en.wikipedia.org/wiki/Confirmation_bias

very good analysis

sorry, i think you are so wrong..nobody forces people to buy and eat sugar..please just think about it. If what you write is true, then it should be better to ban the sugger. It is nonsens. People like sugar, they dont care if they will be less productive and more ill, they are more happy a they prefer it. Worker on sugar plantations can work elsewhere. If they have oportunity to take a better job, they will do it. So tariffs make them poorer. It can be said without data. Do you really belive that pressure on other countries make living there better? I think that free market makes better world.

@@DominikMaxima You assume that people are rational actors, which very often they are not. Most people do not realize that sugar is making their life worse, or if they do they lack the ability to self-regulate. The argument could very easily be made that people are happier when they eat less sugar, and that free trade exploits human instinct for the sake of maximizing the profit margin, whereas a sugar tax would at least counter-balance the hit of dopamine someone gets from eating sugar and therefore encourage self-regulation.

CobaltBW I agree that some people do not realize that sugar is making their life worse, but i do not asume anything. I really do not know if sugar is making their life better or worse, i assume that they would not buy it if the sugar make their life worse BUT who am i to ban the sugar or regulate it for their good. It is their lives. I do not like people which think that they know to live other peoples lives better and therefore may or even have duty to force them to something. free market do only what peoples want. If some companies exploits human instincts then there is hole in market for other companies that show it to people and offer solution. Freedom is bound together with responsibility. I think that a whole range of drugs are dangerous, even alkohol, tabbaco, even coffea and what about extreme dangerous sports.. should we ban all of this? Live and let live. It would be great if everybody live this way. Simple with no expections. Unfortunately every single state is violent to their citizens, tax almost everything, makes milions of orders or regulations. Lots of problems people have cause states and then they offer some solutions which only causes other problems and so on.

"This is very oversimplified....let me lead my argument with an analogy..." aaaaaand, no thanks, I'm out.

this video doesn't address how other industries are affected. For every job "saved" by protectionism in one industry many more may be lost in other industries that are indirectly or directly connected to that one industry.

The consumers pay the tariffs so it is NOT good for the working class. It benefits the wealthy that own domestic production but not all of them. Many of the domestic producers still use the goods being taxed in production. That is why the Koch brothers opposed the tariffs.

I can see how one could reach this conclusion, but they are missing something. Now that disintermediation is possible. You can open a brokerage account and buy non-u.s. companies, we are all both consumer and producer. What would be worth fighting for is free access to capital markets, like in China and other developing nations. Plus, foreign surpluses are invested in american capital assets, which increases productivity. Imagine paying 20% on a car note. No one is getting a free lunch. Things could be better, but globalization, has improved our standard of living, on the whole.

It actually benefits domestic investors a lot, lol. If an investor has a stake in a zombie industry doing well, they're going to support tariffs as it restricts international competition. It's not a "working class" issue at all.

Like all the economist that told us the subprime housing market couldn't cause an economic collapse?

ZDriver1996 experts make mistakes, bruh. Still doesn’t diminish their expertise over an average nose picker

MERLE CELESTE BROWNLEE so instead let people who run for office that have no idea how economics work make decisions instead? I’m confused at to who we should be deferring decision making to if it’s no longer in the hand of economists?

I agree with you but let's not make tariffs too high. If I'm not mistaken doesn't free trade make a country more dependant on foreign nations. if I'm not mistaken. just wondering I'm a teenager that desires to learn about the real world.

Isn't it better to have a free market where the government doesn't force themselves on companies. And are you completely against the domestic tax or are you willing to a low tax

+J Virgo So you would buy the same number of goods even if the price of said goods go up? Falling consumption is not the assumption, it is the conclusion.

***** The increased price of foreign goods will cause previously inefficient domestic producers to produce said product. At the end of the day, the price goes up. Cost is subjective from producer to producer. Some domestic producers may be able to produce at a competitive price, some won't. Pushing producers to produce at above world price is taking them away from more efficient industries - essentially wasting resources.

***** " actual wasted resources are when men sit at home unemployed when there is work to be done and physical resources available to do them" They are sitting at home precisely because there isn't work to be done! One has to ask why the markets are slow to adjust (not all countries weather shocks at the same rate). Regulations increase the cost of a product without adding value, try looking there instead of proposing more non-value adding costs. Full production cannot happen without full employment, but the reverse isn't true. Are you really using the Pyramids, which uses slave labour, as an example for not wasting human lives?

***** RE: Pyramids. Interesting, never knew that. However, I must say that government projects are generally not going to be as profitable as private businesses (too high risk or too high cost). This can be seen through the many ghost towns in China, and Olympic stadiums around the world. "Yes, the sources I read are very archaic" LOL, you're funny. "what happens to the workers who aren't needed to achieve "full production"?" If you have unemployment, you don't have full production. I was saying that full production cannot happen unless everyone is working. However, if everyone is working, that doesn't mean we have full production. If "Full Production", then "Full employment" is true. The reverse statement, If "Full Employment", then "Full Production" is not equivalent, and not necessarily true. Like If "Dog", then "Mammal" is true. If "Mammal", then "Dog" is false.

***** "The big exception where market forces can't operate effectively is in "natural monopolies," for example water utilities" Nope, "market monopolies" is a made up concept. mises.org/library/myth-natural-monopoly "I'm arguing for tariffs that are applied across the board" That will increase the price of everything that uses anything. The ripple effect is not going to be as mild as a mere steel tariff. "The biggest benefit, however, would be the decrease in wage competition. If there were 30% tariffs across the board, quality foreign items would still be purchased by those who could afford them - German cars, Italian handbags, Swiss watches etc" That's the problem, now is it? The people most reliant on imports are the ones who can least afford to buy local products. It's not about quality, anyone who wants quality will buy it at any cost. It's about affordability. "would be the decrease in wage competition" Would you favour a ban on any new products that is potentially a competitor of incumbent industries? What about if other countries retaliate, resulting in a decrease in demand for American goods? You are back to square one, where people are hired because of an increase in local demand, but fired again because of a decrease in foreign demand. "Export goods would be forced to compete more on quality of the goods themselves and less on the wages paid to the people who produce them." Higher prices across the board, which harms the poor the most, due to lower purchasing power, but somehow it's supposed to be a good thing. "High wages are actually a good thing for economic development" Higher REAL wages, which result from increased productivity is a good thing. Higher nominal wages can result from an inflation. In the best case scenario, people are in the same place they were before the tariffs. "Imagine the extreme alternative case, where there are an effectively limitless supply of workers who are willing to work basically for free" Why did this phenomenon happen in the first place? Is it because entrepreneurship is too costly, and therefore no one is willing to produce? Such a phenomenon can only result in a heavily regulated industry. Fix that. "invest in labor-saving machines, otherwise known as capital" The best way to increase investment is to encourage saving. Not many people are going to be able to invest if there isn't enough savings to lend out. That's not going to happen with interest rates at 0.5%. "keeping wages down" keeping NOMINAL wages down. REAL wages increased due to lower prices. "ending around the 1970s with the elimination of tariffs through mechanisms like GATT and the WTO." The reduction in tariffs and the lower importance of American exports on world trade had nothing to do with each other. the 1970s were the time when socialist countries were starting to free up their economies. America became dominant only because it was one of the freest economies (domestically). With the freeing of socialist societies, America became less free (in a relative sense). Now with heavy regulations on American and European markets, the relatively freer Asia is catching up. On a final note, environmental regulations are, to some extent, a good thing. So what if China is suffering from smog or whatnot? They are the ones suffering because they have to spend more on healthcare. They don't have a good legal system to counteract polluters. Even so, China is now the biggest investor in green energy. A better solution would be to allow people to sue polluters (for damaging their property), but I don't see that happening soon.