Trade barriers, in the sense of protective tariffs to prevent outside manufactures selling cheaply in your domestic market, can be very, very, very good for industrial development.

Governing a nation is like cooking a small fish, grasshopper. A little bit of salt (subsidies, tariffs, regulation, taxation to pay for infrastructure, etc) is a wonderful thing, too much salt is unfortunately very easy to apply. And arguments about whether salt "is good" or "is bad" are just plain silly and show that you haven't cooked that many fish.

> Trade barriers, in the sense of protective tariffs to prevent outside manufactures selling cheaply in your domestic market, can be very, very, very good for industrial development.

Not really.

You hurt your own economy because your own consumers now to pay a higher price for their goods. The protected manufacturer has reduced incentive to reduce costs or improve quality. And of course you have hurt people on the other side of the world, who also happen to be humans with families and aspirations, by cutting them out of your market.

The only winners from trade barriers are the protected. Everyone else loses, over and above the ostensible benefits.

>> Trade barriers, in the sense of protective tariffs to prevent outside manufactures selling cheaply in your domestic market, can be very, very, very good for industrial development.

> Not really.

Yes really, though not always. (The word "only" when talking about who benefits is a little to coarse a generalization...) The tradeoff is between cheap goods now and capitalization (building of factories, etc) for later; often, without tariffs, the local industry would never even be able to get off the ground to where it is competitive. And if "the protected" contribute to the overall economy (a big if, I grant) then the country as a whole benefits. It is how the US did, how Japan did/ does it, sort of how China does it, etc, etc. And you are right that too much protection can make industries less competitive ... except when it doesn't... Like all tradeoffs, there are tradeoffs.

The complexity of human society defies abstract reasoning, and begs for actual example. I don't see any grounding in actual knowledge of history in your arguments (though (1) I grant that too much protectionism is just as bad as too little, and (2) you are probably better grounded in fact than your arguments).

I think I could probably agree to some degree with an argument that short term trade barriers in emerging market segments may be useful as a tool to encourage investment.

Even that is dangerous because of the tendency of the emerging industry to rely on them.

An alternate model is that followed by Thailand and its car industry. The Thais aggressively pushed for and signed unilateral free trade agreements with a number of post-industrial and industrial economies and then leveraged those trade agreements as a tool to encourage large investments in heavy industry.

The fact that cars imported from Thailand attract no import duty in a large number of countries has made them a very attractive investment target for companies like Honda who have since built factories there.

> The complexity of human society defies abstract reasoning, and begs for actual example. I don't see any grounding in actual knowledge of history in your arguments (though (1) I grant that too much protectionism is just as bad as too little, and (2) you are probably better grounded in fact than your arguments).

The complexity of human society is an argument in favour of freer markets. Knowledge about resources and demands is distributed extremely widely and no one actor can gather and react to even a miniscule fraction of it, compared to the totality.

Protectionism, amongst other things, is an act of central planning. Those who decide what to protect and what to leave open are making guesses about the current and future economy which might or might not be true. Given the poor record of central planning in every form it has been tried (most famously Gosplan), I would prefer to let a distributed dynamic optimising system create an approximate solution to an incomplete-knowledge problem than to wait for a single actor provide a perfect single solution.

A completely open market will favor the introduction of single-source monopolies - such as making all electronics in China. It is ostensibly more efficient to do things this way, but there is a massive downside. It's fragile, it's over-optimized to specific environmental conditions.

For an example of a shock that exposes these problems in the U.S./China trade, if oil prices rise, everyone loses. The producers will have to absorb higher export costs by raising prices. Subsequently, sales fall. Recession on both sides.

Trade barriers are a way to encourage local production, which will not only diversify the economy, but insulate against resource shocks. The problem isn't in raising them, but in lowering them later on when the market needs more efficiency; at that point, the fat incumbents will lobby hard to keep their protection.

All well and good, but this approach implies that "someone" is better at predicting the future than the market. The historical record on this is pretty clear: nobody is very good at predicting the future, but out of central planners and markets, markets are far better at adjusting to change.

See, for the classic example, Japan's MITI. An uninterrupted story of the brightest men and women in Japan making incorrect guess after faulty prediciton, leavened with a dose of no-better-than-random-chance blockbuster industrial picks.