The Exigent Duality
Protectionism - 07:52 CST, 1/05/17 (Sniper)
I wonder if I'll wind up being wrong about protectionism?

My take has always been that doing business in a given country is a simple return-on-investment calculation; if the State's taxes or immoral regulatory laws are too high or burdensome respectively, then entrepreneurs will simply go elsewhere. Slapping tariffs on imports doesn't magically cause entrepreneurs to manufacture like objects in the draconian country-- instead, it merely means that people won't have access to those objects either at all, or will but at a high price.

This view seems deductively obvious to me, and there is real-world evidence to support it.

For example, the Brazillian State put massive tariffs in place for electronic goods, to the point where it cost something like the equivalent of 800 or 1000 USD to import a contemporary video game system. Meanwhile, the State also had laws that made it prohibitively expensive for Sony or Microsoft to manufacture there-- and Nintendo pulled out of the market altogether. What wound up happening was that Brazillians instead bought, over the course of years, millions of licensed, third-party, "made in Brazil" Sega Master Systems-- yes, a console from 1987-- because that was the only game platform they could afford.

On the flip side though, Trump seems to be making headways, one company at a time, with the mere threat of tariffs. And unlike my Brazillian example above, companies are in fact deciding to manufacture in the United States. Additionally, I was reading about the history of tariffs, and during the 1880s in the United States-- perhaps the greatest period of economic growth anywhere in the world, ever-- there were massive tariffs in place, to the tune of 44%! Incidentally, my favorite US President-- Grover Cleveland-- was fighting to drastically reduce the tariffs, but was struggling to get it done.

There is a caveat though: the US was a borderline anarchist country throughout the 19th century, so perhaps economic growth would have been even better in the 19th century, sans the tariffs? That's what makes the pseudo-science of economics difficult to fully analyze.