January 15, 2020

Arguing with Idiots, Free Trade Edition

Timothy Birdnow

I got into a fight on Facebook with someone arguing for unrestricted, unlimited, absolutist trade policies. The fellow argues bitterly against the tariffs against China, and I rebut him.

Below is the thread. Apologies for any misspellings or bad punctuation, as I wanted to leave this in the raw state. Also, there is some obscene language midway through from my interlocutor. I left it as is.  Below is the whole debate:

Gillee Sherman

https://fee.org/articles/in-1970-milton-friedman-called-for-unilateral-free-trade-rather-than-retaliation-we-still-haven-t-learned-that-simple-lesson/?fbclid=IwAR3INYsmZ-pG_EUIWBsRRTgplbFCDULr-KiM1ZEJfg0oynHl1RCMtMJKwG0

China has cut their tariffs by 90% since the 1990’s. Coincidentally (🤔) they’ve also grown tremendously during that period and like 600 million people have gone from poverty to the Chinese version of middle class AKA consumers of American made goods.

But tariffs make poor countries poorer, except for China.

Countries don’t trade with each. China does not trade with the us and the us does not trade with China. That’s pretty clearly explained and you obviously dont get that key point. People trade with each other and they do so voluntarily by purchasing and selling their goods.

Farmers sell to Chinese buyers or Germans or brits or whomever wants to buy their goods.

When a private buyer here buys Chinese goods no money is not coming from the treasury. Nor is that purchase going on any deficit balance sheet.

Let’s be specific, though i thought the article was pretty clear.

A PRIVATE US buyer voluntarily (free market capitalism) purchases $5 million worth of widgets from a private Chinese seller.

The US buyer sends his own $5 million dollars to the Chinese seller and in return he gets his goods.

The voluntary transaction is complete and the Chinese seller is paid in full.

In crazy government speak we’ve just incurred a $5 million deficit.

Ok, so who we do owe? Nobody. So how is there a deficit which means somebody owes somebody something. And who is the they that supposedly owes the money? Not the United States government that’s for sure.

Take our trillion dollar budget deficit which was a bad thing under Obama but now all the ‘conservatives’ out there love big government, corporate welfare (tariffs, payoffs to farmers to make up for the damage that supposedly didn’t happen) and high deficits.

That money is owed. There is an actual deficit, incurred by the us government that must be paid back.

But the government doesn’t have any money. So they print, tax, and tariff their way to way we are now.

That’s a real deficit with interest on top of it.

There’s no trade deficit because A. The transactions are paid for and B. Countries don’t trade with each other.

End

I replied:

Gillee Sherman you say "People trade with each other and they do so voluntarily " but that is not exactly true. It IS true in a free market system but the Chinese are not such. Oh, they have corporations, all owned indirectly by the Chinese government, and there are rich people who "own" companies but all are ultimately the property of the communist state. You don't seem to understand that point. It's why there is a big difference between tariffs against, say, France and against China. China does not follow ordinary economic rules.

And it also should be pointed out that China has been playing all manner of dirty pool - like stealing our technology. IF you just assume they are any other country then you don't care about their growing wealth and power. BUT China is not any other country. It still supports Communism with a capital C and is attempting to supplant the U.S. We have restricted trade with many countries in the past for the same reasons. We embargoed the Japanese prior to and during the Second World War. By YOUR reasoning we shouldn't have because, hey, it's just people trading with people.

Gillee Sherman replies:

it is people trading with people. Why you don’t get that is beyond me and since you don’t get it nothing else will make sense for you.

But you keep thinking countries trade with each other. 👍 Who cares about those pesky facts?

Just like how there is no deficit and how harming the average Chinese worker aka purchasers American made goods to a a good thing somehow.

T\o which I respond:

YOU are the one who doesn't get it; it is not "people trading with people" in a case of a communist country. The people aren't getting squat out of any deal. The government and those chosen few are the ones who benefit, not "people trading with people". I cannot understand how you can be so obtuse on this matter.

I am astonished you can't grasp that fact. Poor countries always import more than they export, and that for a good reason. You can continue to believe in the fairy tale of a pure free trade, but it doesn't make it true.

He didn't like that and replied:

Timothy Birdnow you are wrong. Not a little, but a lot. Perhaps you haven’t noticed the liberalization of China’s economy which in part encourages private property and business ownership.

So you couldn’t be more fucking wrong and no matter how much you post the same stupid shit doesn’t get anymore right.

When a Chinese buyer purchases from an American seller whose money are they using jackass? Where does the money used in the transaction come from?

From the Chinese government? If you say yes you should stay away from sharp objects and heavy machinery.

Countries don’t trade because countries (government) doesn’t produce anything. That’s a really basic consecutive argument and one that’s rather unchallenged.

But i have to keep reminding myself that trumpists are trumpists first and not really conservatives.

so when Chinese pig farmers buy soybeans they aren’t using their own money but money from the Chinese government account not the buyer? The buyer in your world isn’t using his own money, right? 🤦‍♂️

Say yes and prove how fucking stupid you are.

I answered:

Gillee Sherman you just lost the argument when you started cursing at me. That is the surest sign of intellectual defeat - and a rather childish mind.


You apparently don't understand the concept of communism. The STATE owns the means of production, not individuals, who are primarily employees. You argue about a liberalization of China, but that liberalization is only the establishment of corporations "owned" by party members. The pig farmer is not a pig farmer, but rather a pig tender for the government. That you are completely ignorant of all of this is a testament to the decline of modern education. When Americans do business with China they do business with the Chinese government. Your inability to understand this simple fact is quite amazing.

He replies:

Timothy Birdnow you clearly don’t know what going on in China which has completely liberalized their economy and it many ways are more capitalist than we are.

You’d be right, in 1989. That’s not the reality today.

So i ask again, when China buys from us where does that money come from? The communist party account or the pig farmer?

Timothy Birdnow you’re only arguing against 300 years on conservative economics agreed to by every single major and minor conservative economist and those who know economic history.

Adam Smith was right in the 1700’s and he’s right now.

And my response:


The simplest Google search would disabuse you of that notion, Gillee Sherman. Here are your reforms http://countrystudies.us/china/93.htm In the end the government and the party still control the economy. Your assertion that it is "people trading with people" is untenable See also the Britannica entry. https://www.britannica.com/place/China/The-role-of-the-government If you understood anything about this you would know China moved into a corporatist, fascistic economy from a purely Marxist one. In either case it is the government that controls economic activity, not the people. People are essentially employees. You cannot cite any sources that actually contradict this. Basically, you are trying to win this argument by filibuster at this point and have shown you don't really know what you are talking about.

Gillee (who the hell is named Gillee, especially a man?) responds:

Timothy Birdnow who pays?

And my final (hopefully) reply:

Gillee Sherman, by stating China WAS totalitarian and the economy had nothing to do with people you have destroyed your own argument. You have admitted an exception to the claim "people trade with people". If there is one exception to such an ironclad rule then the rule is not universal, as you are claiming. You have basically admitted you are wrong. The problem is you want a simple, laboratory answer to a chaotic system. It's like the global warming crowd who claims carbon dioxide is the principle (nay only) driver of climate. That is based on laboratory conditions and the Arrhenius equations. It ignores the complexity of a chaotic, open system. It's a neat, pigeon- holed theory that works in a glass jar but fails when tested in the real world. That is not to say free trade is a failure. I have often argued that we don't need to defend it at all as it is a manifestation of Natural Law, because people will trade with each-other unless somehow hindered by others. There is no "theory" of "capitalism" insofar as it is in fact a purely natural, instinctive thing. It is not a theory invented by the mind of Man. The Left uses that argument to put it on an equal footing with socialism, which IS artificial and an intellectual construct, and they know it deep down. That said, large corporations are NOT natural, and what we have now is not pure free markets. We haven't really had them since the Bronze Age in that governments have been intimately involved in economic activity ever since. I am not advocating that, but AM saying that we have to accept the world as it is. And the world does not turn on "people trading with people" in any absolute, or even primary, extent. By your logic we have no right to ever use economic power against another country. We should remove all restrictions on Iran, for instance, because, hey, that is "people trading with people" and what the Mullahs use our trade for is none of our business because it's about people. Had Reagan thought that way the Soviet Union would be alive and well today. Governments set the terms of trade. Why else have thousands of pages of trade "agreements"? You wave this all away with nary a thought on the matter. Astonishing.

Frankly, your attitude in this is more in line with a religious belief than with an historical or scientific one. You seem to believe in this as an article of faith. You are right in many ways, but you are not right for the right reasons, it seems to me.

The rise of China is complicated and has little to do with tariffs. It mostly has to do with the West falling over itself to sell products to China  and in return ignoring Chinese behavior, both economic and geopolitical. We MADE China a great power by offering all manner of special privileges. Our elites in America and Europe decided China would replace us as the manufacturing center because their labor was cheap - a labor cost mandated by their own government (you have to work in China and you have to take what they will give you.)  This was the way  around U.S. labor laws and union scale. At the same time the U.S. tried to maintain THOSE things by expanding government employment and offering generous social welfare programs more in line with European democratic socialism. In other words we empowered China and handicapped ourselves. Now China is challenging us, not just economically but politically and militarily. WE did that, not China. It was sold to us through "free trade" schemes. (The West did that with the Soviet Union during the 20th century, I might add.)

Even Newt Gingrich admitted he was wrong about this policy.

Oh, as to your question "who pays?" It is the wrong question. It should rather be "who decides who pays what". In China that would be the government. Your argument here is like the claim by the IRS that taxes are voluntary because you voluntarily file a return - or go to prison.


Posted by: Timothy Birdnow at 07:08 AM | Comments (1) | Add Comment
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