There’s a story of some smallish island nation (Carabian somewhere?), which had a functioning Domestic diary system. They made a free trade deal with USA, incoming corporations bottomed out the price until no locals could compete, and then once the domestic market collapsed, they jacked them back UP again, (for massive profits).
And, after “they jacked them back UP again”, was it illegal for anyone else to import dairy themselves? Were there legal or regulatory barriers from whomever had previously been part of the former “functioning [domestic] [dairy] system” from restarting their party of the system?
Was there some reason why none of the “incoming corporations” undercut the prices of the others? Were those corporations part of a cartel?
More generally, are there or should there be any particular sensible limits to ‘local production’ – either in terms of the local system, e.g. the prices they can charge (or are guaranteed), or how local any particular system is? It’s not obvious to me that ‘protectionism’ is an unalloyed good.
I admit that I’m still sympathetic! I’ve definitely come around to protectionism not being obviously or always bad. It doesn’t seem ideal that basically the good/best ‘silicon’ production, for pretty much the entire world, currently is concentrated in one somewhat beleaguered island nation.
(Small Caribbean island nations in particular seem sorta inevitably fucked, if only by geography. I’ve never come across great ideas for what they can really do beyond hope for honesty and goodwill from their trading partners.)
And, after “they jacked them back UP again”, was it illegal for anyone else to import dairy themselves? Were there legal or regulatory barriers from whomever had previously been part of the former “functioning [domestic] [dairy] system” from restarting their party of the system?
Starting a farm back up again takes a lot of capital. It takes TIME (during which, like, you need food). Land changing land is not like an instantaneous thing.
What you are describing sounds all well and good, assuming you are working in a frictionless economic system, where start up capital is available, etc etc. But the system is NOT frictionless, and overseas companies had just demonstrated that they could and WOULD slash prices in order to break the domestic market (hence, investment in local infrastructure didn’t just have to make sense NOW, it had to make sense in the knowledge of what importers would do in response)
As for other importers coming in and providing competition… I don’t know. “International importation” seems to concerntrate the market into the hands of a smaller number of players. Economic theory may say that nice equilibria exist for “many sellers, many buyers”, and it may say that bad equilibria exist for Monopoly pricing, but on the scales discussed here, I suspect we have a case of “Two or maybe three Importers”, and there… even if there is no explicit cartel going on, I can easily see both sellers just deciding NOT to get into a price war with one another.
And, after “they jacked them back UP again”, was it illegal for anyone else to import dairy themselves? Were there legal or regulatory barriers from whomever had previously been part of the former “functioning [domestic] [dairy] system” from restarting their party of the system?
Was there some reason why none of the “incoming corporations” undercut the prices of the others? Were those corporations part of a cartel?
More generally, are there or should there be any particular sensible limits to ‘local production’ – either in terms of the local system, e.g. the prices they can charge (or are guaranteed), or how local any particular system is? It’s not obvious to me that ‘protectionism’ is an unalloyed good.
I admit that I’m still sympathetic! I’ve definitely come around to protectionism not being obviously or always bad. It doesn’t seem ideal that basically the good/best ‘silicon’ production, for pretty much the entire world, currently is concentrated in one somewhat beleaguered island nation.
(Small Caribbean island nations in particular seem sorta inevitably fucked, if only by geography. I’ve never come across great ideas for what they can really do beyond hope for honesty and goodwill from their trading partners.)
Starting a farm back up again takes a lot of capital. It takes TIME (during which, like, you need food). Land changing land is not like an instantaneous thing.
What you are describing sounds all well and good, assuming you are working in a frictionless economic system, where start up capital is available, etc etc. But the system is NOT frictionless, and overseas companies had just demonstrated that they could and WOULD slash prices in order to break the domestic market (hence, investment in local infrastructure didn’t just have to make sense NOW, it had to make sense in the knowledge of what importers would do in response)
As for other importers coming in and providing competition… I don’t know. “International importation” seems to concerntrate the market into the hands of a smaller number of players. Economic theory may say that nice equilibria exist for “many sellers, many buyers”, and it may say that bad equilibria exist for Monopoly pricing, but on the scales discussed here, I suspect we have a case of “Two or maybe three Importers”, and there… even if there is no explicit cartel going on, I can easily see both sellers just deciding NOT to get into a price war with one another.