Re:A Brief History of the Chinese Growth Model
by Symmetry on Sunday February 24, 2013 @08:42PM
(#5276834)
The author cherry picks countries to suit his he mentions 19th century Chile failing while embracing free trade, but Argentina in the 19th century also embraced free trade and reached 1900 nearly as wealthy as America despite starting with a less well educated populace.
I'm not sure why he lists Japan as a protectionist success here either, since Japan was famously importing as much as possible in this period. They also were far more keen on importing laissez faire British advisors.
Not to say that protectionism can't work. As a backdoor way of transferring money from farmers to industrialists it can work, but if your country has the beaurocratic sophistication to engage in direct subsidies those will work better, as they did in Japan or the USSR.
Another benefit of tariffs in practice was that they allowed the government to raise money relatively efficiently, compared to other means of taxation then available. This allowed a larger government, which allowed more advanced commercial institutions. Good luck getting someone to enforce a commercial contract in China in the 19th century! But again, most modern states can pull off having an income tax, so this isn't as much of a concern these days.
I'm not sure why he lists Japan as a protectionist success here either, since Japan was famously importing as much as possible in this period. They also were far more keen on importing laissez faire British advisors.
Not to say that protectionism can't work. As a backdoor way of transferring money from farmers to industrialists it can work, but if your country has the beaurocratic sophistication to engage in direct subsidies those will work better, as they did in Japan or the USSR.
Another benefit of tariffs in practice was that they allowed the government to raise money relatively efficiently, compared to other means of taxation then available. This allowed a larger government, which allowed more advanced commercial institutions. Good luck getting someone to enforce a commercial contract in China in the 19th century! But again, most modern states can pull off having an income tax, so this isn't as much of a concern these days.