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Re:Supply Chain Shortages Continue Around the World. Get Use... by tablespoon on Friday September 03, 2021 @03:32AM (#28401392)
> Tariffs are among the worst in this hierarchy because their incidence is - to an economist - arbitrary. In classical economics, specialization is good, and industries should go to whichever country is most efficient at providing them. Any sort of national tariff interferes with that: to the extent that the tariff succeeds at collecting revenue, it does it by making consumers choose an inferior product (in the sense that without the tariff, they would've chosen differently).

Listening to the classical economists in this case is a lot like listening to a paperclip optimizer complain about all the non-paperclip production that wastefully divert resources away from more paperclips. They have a point, but only from a perspective that leaves a lot of important stuff out.

> When nations cut themself off from the global economy, they often think that they've made themselves self-sufficient right up until a foreign power that's been trading the whole time shows up in your capital city with a fleet of gunboats to forcibly open your country to world markets.

That's a straw-man, though. I don't think anyone in favor of tariffs or protectionism is advocating for a pre-Meiji like economic isolationism.

Also military vulnerability is not the sole territory of protectionism:

When nations make themselves over-dependent on the global economy, they often think that they've made themselves competitive right up until a foreign power they've outsourced their gunboat production to cuts them off from their just-in-time supply of spare parts and shows up to their capital city with a fleet of gunboats to forcibly subject them to a new political or ideological regime.

Re:Supply Chain Shortages Continue Around the World. Get Use... by simonh on Friday September 03, 2021 @04:42AM (#28401798)
The point is if you ramp up costs and inefficiencies in your economy you're making yourself uncompetitive globally and that can have lots of undesirable consequences, including strategic ones. There is of course a balance to be struck. Are we taking advantage of efficient production abroad to cut prices for consumers, or are we becoming excessively dependent on foreigners?

Whichever it is, the point is that tariffs are the worst way to coerce change in an economy. There's no guarantee they will have anything like the effect intended, because the point in the economy where they're levied (importing X) is completely different from the point in the economy we're trying to change (locally making X). Even if they do, the costs of the change can be incredibly high. If you want to promote local production, just subsidise local production. It's generally a bad idea, but the least worst by a long mile.

Re:Supply Chain Shortages Continue Around the World. Get Use... by tablespoon on Friday September 03, 2021 @11:30AM (#28405526)
> Are we taking advantage of efficient production abroad to cut prices for consumers, or are we becoming excessively dependent on foreigners?

Another important point is that outsourcing as-actually-implemented isn't usually seeking "efficient production," just labor arbitrage.

> If you want to promote local production, just subsidise local production. It's generally a bad idea, but the least worst by a long mile.

I'm also fine with subsidies, but often that seems more difficult to sustain politically. It seems like tariffs and subsidies go hand in hand rather than be an either/or policy (e.g. use tariffs to fund the subsidies).

Re:Supply Chain Shortages Continue Around the World. Get Use... by nostrademons on Friday September 03, 2021 @12:11PM (#28406084)
Labor arbitrage is efficient production. If you can outsource a job for less than it costs domestically, it means labor is underutilized in the foreign country and can be employed for higher-value uses.

Pretty much any arbitrage is an economic inefficiency being exploited, whether it's financial (information inefficiences), shipping/merchants (geographic & local preference inefficiencies), storage (time preference inefficiencies), outsourcing (labor), etc. And in the course of exploiting it, it makes the inefficiency go away.

Re:Supply Chain Shortages Continue Around the World. Get Use... by tablespoon on Friday September 03, 2021 @05:56PM (#28409865)
> Labor arbitrage is efficient production. If you can outsource a job for less than it costs domestically, it means labor is underutilized in the foreign country and can be employed for higher-value uses.

I think the key points are 1) that's not the kind of thing the word "efficiency" typically brings to mind, and 2) there are quite valid political reasons to want to discourage that kind of "efficiency."

Re:Supply Chain Shortages Continue Around the World. Get Use... by elihu on Friday September 03, 2021 @04:52PM (#28409284)
In a lot of cases a better alternative to subsidies is just to have the government be a buyer for locally-made products. That way you're not just handing people money, the government is actually getting something. That seems like it should be more politically viable. That's assuming the government has some use for the things being subsidized.