Free Trade Does Not Make Countries Richer

In part 2 of INET's interview with Ha-Joon Chang, he says that history shows that developing countries need protectionist trade policies to nurture young businesses -- including the United States until World War II

[ganosgal]

This is the main reason why Republicans in the United States were against
the reduction of import tariffs between the years 1850-1912 because it
would damage the incipient heavy industry that was concentrated in the
northern states.

[Yokopo_]

Tariffs benefit the industry that has the tariff protecting it but hurts literally every other industry that wants to consume that good. If there was a high tariff placed on steel this would benefit the steel industry but would harm car manufacturers, appliance makers, construction, literally anything that consumed steel. They would have to pay more for the same good meaning they cannot produce as much or hire as many people.

[dontbetonit]

The USA was protectionist in the 1930's the only reason the US became the power it is is because the rest of the worlds factories were blown to pieces and the USA took advantage of the vacuum. The last time the world gave up on free trade caused the Great Depression. combined with a drought in North America.

[HariPolitopoulos]

What about the European Common Market? Has not this free trade area been the source of much economic growth?

[jamesmurphy]

Indeed once a strong nation is strong they expect a open market into other nations
In my book that's called a racket

[MrAce]

@haripolit Economic growth for export-led economies like Germany at the expense of peripheral european countries.

[danielhalm]

Industrial growth really picked up in Britain when free trade was introduced after the repeal of the corn laws.

The primary way for a country to catch up in growth is free trade given countries can catch up technologically by importing capital and by freeing up more income to spend domestically by lowering living costs. Of course this is only possible at times by ignoring intellectual property rights. Tax receipts from naturally better performing industries can be reinvested to diversify through infrastructure, education and training to develop industries needing ‘nurturing’, but tariffs and subsidies only lead to corruption, endless lobbying and as a result of the difficulty in reducing them with time (due to special interests), dependence.

[EdmontonRails]

If there is no trade protectionism small domestic business around the world will be trampled by huge international corporations, it's that simple.

[sizzla]

Matthew 6:24 No one is able to serve two masters, for either he will hate the one and he will love the other, or he will be devoted to the one and he will despise the other. You are not able to serve God and mammon.

[DwAboutItManFr]

Even if true this only means you have to lift it eventually.

[kennilini]

in conclusion: free trade does not make countries richer because I said so...

[mujaku]

Historically, free-trade has never worked. Karl Marx supported the idea of free-trade in 1848 because it was so destructive, a fact that is not taught in ECON 101. Here is what he said:

"the protective system of our day is conservative, while the free trade system is destructive. It breaks up old nationalities and pushes the antagonism of the proletariat and the bourgeoisie to the extreme point. In a word, the free trade system hastens the social revolution. It is in this revolutionary sense alone. . . . that I vote in favor of free trade."

Developing countries need to rely on autarky: to become economically self-sufficient and only then cautiously enter into international trade without losing their independence.

What an excellent excuse for companies getting protection and subsidies from governments to receive privileges ad eternum

[harshitmadan]

Hong Kong. Singapore.
I rest my case.

[ivandate]

deep in their mind ... they love Trump

[davidagainstgoliath]

This guy is full of baloney. Milton Friedman would wipe the floor with him.