Imports and Developing Countries: Countering the Myths of Western Exploitation \ stacker news ~econ

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Imports and Developing Countries: Countering the Myths of Western Exploitation mises.org/mises-wire/imports-and-developing-countries-countering-myths-western-exploitation

69 sats \ 3 comments \ @Undisciplined 8 Oct econ

By Lipton Matthews

An enduring myth is that imports from industrialized western countries have decimated production of goods in developing countries. Economic history tells a much different story.

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49 sats \ 2 replies \ @0xbitcoiner 8 Oct

I must be missing something here. If industrialized Western countries are importing because it’s cheaper, how does that actually decimate production in developing countries? Aren't we talking about the same countries (i.e., imports from developing countries)?

I'd say that importing from developing countries 'wipes out' our local production.

44 sats \ 1 reply \ @Undisciplined OP 8 Oct

There's a long standing idea in economic development that poor countries need to have highly protectionist import barriers for manufactured goods because they couldn't compete with the industrialized nations.

This predates the more recent concerns about offshoring and outsourcing, where it's the industrialized nations that feel they can't compete with the developing world.

0 sats \ 0 replies \ @Solomonsatoshi 19h

The world has changed since the 1950s. Developing nations can now manufacture goods more cheaply than wealthy developed nations where financialisation has shifted the centre of production from physical goods to financial services. China is the most obvious example of this. Previously it was seen as necessary to impose tariffs on imports to preserve domestic manufacturing production. There is a strategic aspect to this as well- having manufacturing capacity in your economy has advantages as the US is discovering now that China is restricting exports of rare earths to the US military. Economics is never simply about free markets- it is always also a matter of how nations compete for advantage in the supply of raw materials and manufactured goods. Many countries impose tariffs and other trade barriers in order to encourage and preserve a domestic capacity to produce food and other strategic supply chains. Only governments can logically impose and manage such trade management and development strategies- left to the 'free market' nations would risk being left unable to produce vital goods and the result would be being held over a barrel by competing nations.