The Japanese subsidised their car makers for many years allowing them to compete with the Europeans and Americans otherwise they would have gone out of business.

Once they were more efficient than American producers they could stop the subsidies and compete in the American market to the point we see now where the US manufacturers have not been able to react to a shifting market and had to go crawling to the government for help.

You do not need to aim for a monopoly to destroy domestic producers – any reduction in competitors increases profits for everyone who remains in the market.

Also, you do not have to jack up prices, if you have a capital intensive production process that leads to much lower unit costs at volume then you can set the price low and still be making serious profits – again the Japanese cars in the US are good examples of this.

The Chinese do not have a monopoly in steel.

The price of oil has fallen significantly over the last year.

In the case of EU agriculture, you directly contradicted your previous statement.

“If that is natural decline then sobeit, but if that is a forced decline caused by a foreign power FLOODING THE MARKET in order to later DRIVE UP PRICES then that is not good.”

Then as an example you refer to EU agriculture…

“but this does not alter the fact that supply is much higher than it otherwise would be and so ARTIFICIALLY DEPRESSES PRICES within the EU.”

I’ll post dsylexic’s question again:

“i would like to hear of a real life example where a ‘foreign power first banished local industry to oblivion and then later jacked up prices having thus unfairly having become a monopolist’.”

1. That applies much more to high cost labor like physicians, attorneys, pilots, etc., who most people making the argument don’t really care about, than it does to low cost labor, who are relatively inexpensive to retrain.

2. The most important factor to relieving this anxiety is to decrease barriers to new employment–payroll taxes, unemployment taxes, employer-provided benefits, unionization, tort, minimum wage. All of those things make it harder to get a new job, or more costly to lose an existing job. They unnecessarily tie workers to existing employers and reduce their ability to nimbly move between them. They also, in themselves, involve government intrusions into free trade. Disincentives to save for interemployment transistions–like confiscatory tax rates and a deliberately inflationary monetary policy–are other ways that antifreetraders chain workers to existing employers.

In other words, free trade DOES make it “less painful”.

The currency collapse comes from a market expectation of a fall in the currency. As the government cannot sell its T-Bills the only other option it really has is to print more money which obviously will devalue the currency.

The supply and investment in alternative energy has been retarded by OPECs control of the oil supply. As long as OPEC keep energy prices slightly below the level that makes alternative sources viable then no-one (without govt. subsidy) will make any great inroads into that market.

The EU, through the Common Agricultural Policy of huge subsidies to farmers, has created a huge glut of butter, wine and many other products that place any country trying to import those into the EU at a huge disadvantage. The EU tries to counter this by not allowing ‘all’ the produce onto the market and instead hoards it in great ‘butter mountains’ and ‘wine lakes’ but this does not alter the fact that supply is much higher than it otherwise would be and so artificially depresses prices within the EU.

I could keep going, but I have work to do…

freetraders need to find ways to make this transition less painful or allow free labor movement ie the daughter goes to the neighbor’s house to work.

It looks to me like the pirates in Washington are in cahoots with the dictators in Beijing–the former to increase their power over us, the latter to increase their power over Washington.

When nobody wants to have anything to do with dollars anymore. Foreigners cash out their dollars (by trying to buy things in America), but Americans don’t particularly want dollars either, raising the dollar price tag of the things foreigners want to buy.

Lots of fallacies here. First of all,by keeping your comparitively overpaid labor employed, you are beggaring the rest of the country.Why dont you seethe against that unfair act. When you buy a product from China or elsewhere, it is not because the milk of human kindness is welling up in your bosom, rather it is because you are interested in your own wellbeing in procuring a good deal.
how to manage trade with low cost labor nation? – answer: move on to more productive work. make aircrafts or race car engines instead of rubber tires. i am sorry just because certain buggy drivers are going to be unemployed doesnt mean that i’ll stop using cars.i didnt ask the buggy driver to do what he does for a living.i am NOT responsible for his state of life. i can,privately,out of sympathy,help him learn to drive a taxicab etc.but dont expect me not to buy cars.
if you are worried about the workers that are going to be laid off, help them get skills that are more productive.try to break barriers that prevent people from transferring skills learnt at one job into another.

on moral grounds,just because one is born in X country which in general is richer than country Y, doesnt entitle the citizen of X to special privileges.

Don writes:”Free trade is justified regardless of the trade policies followed by other governments.”
But if the other government does not permit imports or severely limits them (via regulation or tariff) there is no trade. A largely one way transfer of goods or services in exchange for money is not trade. It is simply merchandising.

Don writes:”If your neighbor offers to mow your lawn for free because his psychiatrist recommends such mowing as a sure cure for his depression …” and he also writes:”Should you refuse to accept your neighbor’s tomatoes in exchange for a quick smile, on grounds that your neighbor will not, in exchange for his tomatoes, really purchase anything from you or from the outside economy?”

In both cases Don’s answer is to accept the free goods and services as it “… would not make you richer by refusing his offer.” This is a Clintonian answer to his rhetorical question. That is, technically accurate but not helpful. A one-time event, a limited person to person (neighbor to neighbor) exchange, a small scale transaction is usually not harmful. Extend the same event to a much larger scale and great harm can transpire.

Doesn’t “Free Trade” require “comparative advantage” in order to be valid? Can low cost labor be the sole comparative advantage? Especially when economic relationships are so vastly dissimilar?

What troubles me is that in the guise of “Free Trade” all that is being traded is the living standard of our working class (and to a growing degree the professional class) in exchange for cheap goods and services from China, India, et.al. In effect, we beggar our workers in order to improve the economic status of workers in these other nations. We beggar our workers in exchange for cheap goods in the name of “Free Trade” so we can all pretend to be richer.

I expect to be rhetorically pounded for this position especially as a capitalist etc. What I’m asking though is (a) is it really free trade when all we do is beggar our workers to improve the lives of workers in other nations? and (b) how can we manage trade with low cost labor nations so that we don’t beggar our workers?

Don’t hold your breath… but let’s just say for the sake of argument China IS trying to crowd out US steel. Once they’ve done that, what next? Well, they’d have to crowd out the Brazilians, the Russians, the Indians, and any other country with a significant steel industry. Such a costly and risky strategy could only come about by govt. “planning” indeed.

A more apt analogy would be: “If you have a lawn mowing business, and your neighbor offers to mow your customers’ lawns for free because his psychiatrist recommends such mowing as a sure cure for his depression, should you intervene?”