(04-21-2015 06:41 PM)Sonsowey Wrote: (04-21-2015 06:34 PM)Tex Wrote: (04-21-2015 06:23 PM)Sonsowey Wrote: After visiting and having lived in the 3rd world, and seeing what it's like when governments don't repair the roads, provide clean water, provide education, pay the cops, etc. I am less in favor of it.
You could argue that all those things (outside of education) are within the realm of "proper" government action, since most flavors of libertarianism argue for restraining government action to doing things it's "supposed" to do rather than "could" do. And I don't think many third world countries are libertarian.
But still you have a point, going to really underdeveloped countries makes you want to see the government do more to get their countries out of poverty. Libertarians would argue they need to do more export-led industrialization to get there though, and I'd argue that they're right.
Thinking of Latin America, they export everything. This has been the case with Gold, Silver, and Guano since the first Europeans arrived, and now it's continuing with all sorts of mineral resources. It isn't really working out for anyone but the people on the very top, relatively similar to the last 500+ years.
Peasants are kicked off their land because a valuable mineral lies underneath it, a multinational comes in and blows up a mountain for several years until they have extracted the mineral, then they leave. The country and people are no better off, the people who cut the deal definitely are though. And then the country is left without its resources.
Latin American countries' agricultural sectors are devastated by FTAs with the U.S. because our subsidized food floods the market to the point where millions of peasants abandon their homes and land and move to cities in search of jobs, where they have no skills, and end up working as menial labor and creating sprawling slums.
So they end up exporting people to the USA, where we have over 10 million illegal immigrants working outside of our laws, profiting the criminal businessmen who hire them illegally, which is all winked at by our political establishment.
So yea, I think Latin America is already trying the export led development thing. I must say that I think protectionism, especially in agriculture, helped Latin America a great deal. Helped keep their society intact, helped keep their cities from not being huge slums, helped keep people without education employed in a productive endeavor.
Textiles have suffered from Free Trade as well, as local textile industries in many countries have been wiped out by cheap Asian imports. Latin America on the whole is a region that is on the global "average" in terms of well-being, income level, etc. So it's easy to import clothing made in some place with lower wage costs. Again, with the terrible education there, this leaves many people without any real opportunities.
I suppose if the U.S. had a "libertarian" government that would mean opening the door to anyone and everyone who might wish to come here, allowing free movement of goods and people to maximize efficiency in labor and capital markets, right?
Before we get into export-led vs. import-substitution (the later being the most common response to free trade for fear of being exploited by cheaper goods elsewhere in the world, which you point out, and for trying to create economic independence, which is responsible for millions of death, mainly in China), it's important to realize every major idea in economics and politics has some merits, and cons. And what you pointed out about free trade is very legitimate. But eliminating free trade entirely, which it sounds like you imply wouldn't be a bad thing, would lead to devastation for a lot of people. Especially in Latin America.
First, you can easily see the merits of export-led industrialization in the economic development Brazil has had, as well as the Asian tiger economies and Japan's economic success. You can also see the limitations with them too--specifically the Asian financial crisis in '97. But, in the big picture of things, export-led industrialization gave the Asian tigers the tools they needed to become economically secure states.
Talking about Latin America, though, you make it sound like Latin American countries have always been export-oriented. They haven't. In fact, the region is famous for its refusal to use export-oriented trade in the 50's and 60's, and that is still true for the vast majority of Latin American countries that simply pumped more government funding in their import-substitution programs. The fact that, as you've pointed out, Latin American countries are often very backwards lends itself to the idea that export-orientation is a very viable option. Which it absolutely is. It may not work for all countries, but it can be seen as a very viable option for a large chunk of underdeveloped countries.
Second, there's a big distinction between peasants and the country as a whole. The idea of building the poor class up has been tried and tried and tried, and it's pretty much never worked. Some things, like export-orientation, even make the poor classes worse off. However, export-orientation gives rise to a wealthier country that can then spend more on infrastructure, which then encourages foreign investment in its specialized industry, and helps form a self-serving cycle for the developing nation. This can screw over a lot of poorer farmers who are being cut by the agricultural imports, but the increase in exports the country sees enriches the country itself as a whole (unless the treasury is being used as a personal bank account by its highest officials, which is a ruined country from the start).
As far as protectionism and Latin America, it's actually interesting that you bring up slums, because some of the biggest slums in the world are attached to Latin American countries, because the lack of industrialization and exposure to foreign investment has left such a stunted private sector. A lack of specialization in industry also hurts the establishment of a professional middle class, and keeps the poor from having any real chance of upward mobility.
As far as textiles, the reason cheap Asian textiles wipe out Latin American ones is because Asian economies use export-led industrialization to establish a specialized field of economic dominance, which is exactly what Latin American countries should start exploring, especially ones with economies of scale, like Brazil (has already done to great effect). Latin America's biggest threat is probably the exploitation of China--being that China encourages Latin American countries to produce cheap things and use unskilled labor that reverses the development made in those countries.
And yes, if America had a libertarian government that's exactly what it would mean. Personally I don't think that would work because in my opinion America should keep the world down.
Moving away from economics a little, the US should just invade North America and work its way into Brazil so we can put all the big booty bitches in a cage and distribute them to betas, which will in turn cure being beta I guess. Or something. Something will happen.