Milton Friedman debates a protectionist.

[Willredd94]

Lol Professor Cohen, Japan is no where to be seen in international competitiveness now.

[jrcahill2]

I don't think I have enough of an IQ to carry on a conversation in this comments forum :(

[TradingTutor]

Even if everyone played by the free market rules, it wouldn't work for some countries. Free markets might be good for the overall world economy, but they may be bad for individual countries. Germany and Japan rose up from the ashes with smart state-intervention, and they wouldn't have done it without it. Just cut your damn free-market ideology, it's not based in any real facts, and it's very harmful to conduct policies based in an ideology.

[StatelessLiberty]

@TradingTutor Facts! Reality! Ideology! Idealism! Country X had state intervention that worked! - these aren't real arguments.

And your citation of Germany and Japan is too vague to be counted as evidence for something. I could equally cite Hong Kong and Singapore as places which had very little state intervention yet rapid economic growth.

You need to be more specific with your evidence and perhaps suggest the economic mechanism by which such state intervention would help.

[TradingTutor]

@StatelessLiberty "Country X had state intervention that worked" is a sufficient counter-argument to the argument that state intervention is always bad, popular among free-market ideologists.

My argument is that there's nothing that proves laissez-faire is always the best way to go, so state-intervention may or not be necessary, and it shouldn't be dismissed as always prejudicial to the economy (continues)

[StatelessLiberty]

@TradingTutor "Country X had state intervention that worked" - the statement in isolation doesn't prove anything - it's question begging. You need to present evidence or economic reasoning to show that the state intervention that led to success.

"My argument is that there's nothing that proves laissez-faire is always the best way to go"

I have never denied market failure, but I think there are strong Public Choice criticisms of advocating state intervention. See: /watch?v=J5maguX5x8c

[TradingTutor]

@StatelessLiberty Like Cohen said on the video, Germany and Japan looked at the competition in certain key industries from other countries, and put protectionism in place so those industries could develop in their country - and it worked. State intervention led to success.

"I have never denied market failure, but I think there are strong Public Choice criticisms of advocating state intervention."

I've seen that argument before, and I'm curious to see the evidence behind it. I'll see it tomorrow

[TradingTutor]

@StatelessLiberty "I would argue that's true for every economy. Why only for emerging markets and not for all markets?"

China, Russia and other former URSS countries didn't even have capitalism as their base system. Hong Kong, China and India needed industrialization and so they needed to let free markets exist.

But on advanced capitalist economies the markets are already free enough, that's not the problem. Moreover there are many monopolies/oligopolies in advanced capitalism.

[TradingTutor]

@StatelessLiberty In the case of emerging markets, it's obvious what they needed was more open markets and allowance of freer trade.

It's not me that has to prove anything - it's the laissez-faire economists that have to prove that it always works, and that state intervention it's always detrimental.

[StatelessLiberty]

@TradingTutor "In the case of emerging markets, it's obvious what they needed was more open markets and allowance of freer trade."

I would argue that's true for every economy. Why only for emerging markets and not for all markets?

"state intervention it's always detrimental"

Firstly, most laissez faire economists argue for minimal gov't intervention, not no gov't intervention.

Secondly, while it may be the case that gov't intervention sometimes helps, Public Choice says it will probably fail.

[dovahkiin516]

@StatelessLiberty Here is a simple example of gov intervention that has worked: China's government started in 2001 a policy of buying US currency. This is called dirty float, which allowed China to depreciate their currency, which allowed exports to grow, ie manufacturing jobs, and this grew GDP. Basically, what they did was subsidized their exports, which left US jobs at a disadvantage, and it eventual took jobs away from the US. Proof gov intervention can work, albeit at the US expense

[StatelessLiberty]

@dovahkiin516 That argument seems to rest on the (in my view) faulty assumption that increases in aggregate demand lead to greater output in the long run. An increase in AD, just increases the money supply in the long run and causes the price level to rise.

Also, when the Chinese subsidise their goods, in the short run some Americans get laid off, but in the long-run America gains due to comparative advantage.

[dovahkiin516]

@StatelessLiberty Nice, someone that has taken some econ class, or at least read about it. The inflation rate has reached 5.5% in may 2011 (EPI by Robert Scott) in China. However, inflation rates for food and oil has gone up much higher in China. This is the only negative problem China is facing for increase job growth and rapid GDP growth. So, far after 10 years of this policy America has lost jobs, and it is argued that they have not gained due to comparative adv.

[dovahkiin516]

@StatelessLiberty Part two: I would argue that the US hasn't gained jobs because we have hit a diminishing marginal return on service industry jobs. On top of which the US wants China to revalue, so an estimated 2 million jobs come back.

[IBloodSweatTears]

@StatelessLiberty So in your statement you do say that "Some American get laid off." Which is true, they will be laid off because of the exsporting of the jobs. But who cares if the goods are cheap, IF ALL THE JOBS ARE GONE! No one can afford to buy anything! The job comes before the purchase & the quality of life. So opening up our markets and letting "some of our jobs get lost", is awful economic policy.

[StatelessLiberty]

"But who cares if the goods are cheap, IF ALL THE JOBS ARE GONE!"

But who cares if people have jobs if goods are so expensive you can't buy anything. It's what wages can buy that matters, not their monetary value.

The fact is, the jobs aren't gone. The jobs have been reallocated to another area of the economy where we do have comparative advantage. At best, there is a period of frictional unemployment during reallocation, and we lose a little there - but due to CA everyone gains in the long run.

[IBloodSweatTears]

@StatelessLiberty Well why are the goods so exspensive? Not because of Tariffs or a sales tax. But because of the hidden inflation tax cause by the rapid growth of the money supply from the Federal Reserve. The government runs trillion dollar deficits, They sell bonds at interest to the Fed, while the Fed print unlimited amounts of money, thus causing inflation.

What you forget is that there is a global economy, the jobs are being reallocated to another country!

[IBloodSweatTears]

@StatelessLiberty Suppose you are right and I'm wrong, the jobs are being reallocated to another sector of the economy. You can't sustain that, You will eventually obliderate your goods-producing sector, and that's what we have done, we run a 700+ trillion dollar trade deficit. Cheap goods from another country can be good, but it's monetary policy & inflation that causes the most dramatic cost of living increases.

[IBloodSweatTears]

@StatelessLiberty So with your trade policies, we would have a service-sector economy, and the service sector is even being weakend by high tax's/regulations.

I agree with your reallocation idea, but you forget that labor can be exported, or reallocated to another country, just like capital can. Chinese subsidies hurt us in the long run, cheap goods in the short run mean nothing if we debase our currency. Those subsidies will further destroy our own manufacturing.

[IBloodSweatTears]

@StatelessLiberty So, China keep's it's currency artificually low, and subsidises some goods, Oh yeah! America get's "Some" of it's jobs killed, and in the short run, They get cheap goods, But when China wakes up and let's there currency go to real market value & stops financing all of our debt, Prices will go threw the roof, and we will go bankrupt, and have a currency collapse.

You don't seem to understand the adverse effects a near trillion dollar trade deficit has on an economy.

[TradingTutor]

These libertarians just heard the truth, and they can't accept it. They're ideologists, and that has nothing to do with science.

[astro7894]

Milton Friedman is correct except that now we all have to learn Chinese to get a job!

[tehatemachine]

@astro7894 Really? I don't and I have a job.

[astro7894]

@tehatemachine Well you are one of the lucky ones in the recession because Milton Friedmans so called free market pushed the jobs and investment overseas. As Cohen said, there is no point playing by the rules of the free market when your competitors don't.

[tehatemachine]

@astro7894 cohen is a dead wrong idiot. Life is not a zero sum game and Milton was correct. the reason why companies have been going overseas is because of bloated regulations within the states and the taxing minimum wage standard. In san francisco they just raised it to 10 dollars an hour

which is going to destroy many small businesses. .

[astro7894]

@tehatemachine Yes I agree that is part of the problem. Another part of the problem is that China keeps its exchange rate artificially low, thus creating more demand from US customers for chinese products. This artificially low exchange rate is not a free market situation. There is no point having a "free" market in the US when its not free in China, because China will just use this to their advantage.

[myboycoltmccoy]

I am no history buff but didn't Japan have a financial meltdown in the 2000's. Looks like that centralization didn't pan out so well.

[redsox1006]

Well what ARE you saying Dr. Cohen?

[MrGreeneggsnham]

They must have filmed this during the Japanese stock market bubble.

[DackIsBack]

Who is this Cohen character... somehow that name doesn't surprise me! Oh... stereotypes- how I love & loath thee...

Let me guess, he serves on some board of corporations who profit massively from protectionism... whilst fucking everyone else over.

[DackIsBack]

@DackIsBack "board of corporations who profit massively from protectionism"

Berkeley... that's close enough for me.

[apagoogoo]

japan's success can in large part be attributed to an american by the name of w. edwards deming.

[fountainherz]

3:04 Friedman gives him the finger lol

[1000g2g3g4g800999]

@fountainherz lol

[fountainherz]

but, but china is taking our jobs and flooding the american market with cheap crap!!!

[AsymmetricalWarfare]

@fountainherz That's just ideology!



[SomethingSea1]

@fountainherz I'm sure that the minimum wage had nothing to do with that. Why would jobs be shipped overseas where people would work for a lower wage that wasn't dictated by the gov't? Makes no sense.

[Goodatconnect4]

We've been trying to eliminate murder, rape and theft for the last few hundred years- should we just stop trying to stop these acts since they haven't yet ceased entirely?

[humanhiveanomaly]

ugh... listening to statists debate economic policy (even the minarchists) is like listening to debates within the science of deferent and epicycles, extremely complex by fraudulent set of assumptions (Walker sees a flavor of the truth but makes inaccurate assessments). There are people and more people. There are no nations, only some people that impose their will through violence through the guise of legitimacy. Ultimately all I hear are squabbling over how to employ violence.

[Smullet90]

@humanhiveanomaly

Cool story bro, I bet you have all the answers too all the world's problems. Too bad you couldn't tell anyone your answers or debate the merits of your viewpoint, since then you would simply be talking about how to employ violence, eh?

[PrivateAckbar]

@humanhiveanomaly Well then you can't hear properly.

[StatelessLiberty]

@humanhiveanomaly Sorry, but I completely disagree.

1) Any system of property norms is violently enforced. If someone has a different view to ours of what constitutes legitimate property, then our property system is violently enforced on them.

2) Also, there's nothing more "libertarian" about statelessness. I would argue that libertarianism is more sustainable in statelessness, and that a polycentric legal order is more efficient - but communist societies could also exist without a state.

[oblonsky]

@humanhiveanomaly you're calling milton friedman a statist?

[WalterLiddy]

@humanhiveanomaly How to employ violence is a question that bears looking into. Violence in and of itself has no moral significance. Context is everything. A violent act that saves the lives of innocents from the hostility of an aggressor is not immoral. So the question of who should exercise violence and under what circumstances is terribly important. It is in fact the question at the heart of politics. That you dismiss it says only that you don't want to think.

[humanhiveanomaly]

@WalterLiddy These replies need a clarification from my initial comment. I thought given the state action advocacy nature of the video that my comment applied to states, apparently not. With that in mind, my initial comment should be more in line with those who replied in concern. The state has the proclaimed right to initiate a rich tool-set of aggression, I call violence, and this should bear huge moral significance. There is no state, only individuals who claim to act in its name.

[trilerkiler]

Damn you are active youtuber, my main page is always filled with your comments and ratings not saying its a bad thing just pointing out. Anyways good stuff keep it up, and by the way that HappyCabbie is fucking retarded.