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From: radford@calgary.UUCP (Radford Neal)
Newsgroups: net.politics.theory
Subject: Re: Strange Bedfellows: and shoes
Message-ID: <591@calgary.UUCP>
Date: Fri, 29-Nov-85 18:52:24 EST
Article-I.D.: calgary.591
Posted: Fri Nov 29 18:52:24 1985
Date-Received: Sat, 30-Nov-85 08:09:01 EST
References: <549@qantel.UUCP> <579@calgary.UUCP> <11113@ucbvax.BERKELEY.EDU>
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Organization: University of Calgary, Calgary, Alberta
Lines: 36

> >So do any "socialists" out there want to defend shoe quotas against the
> >libertarians (me included)? If not, perhaps you'd like to give a list of
> >what current state interventions you oppose also. Then we'd have something
> >to agree on...
> 
> I can conceive of a situation where shoe quotas might be desirable.
> Suppose one country plans to flood the shoe market in the other
> country with cheaper shoes until all shoe producers in the other
> country are driven out of business.

If they continue selling cheap shoes after all the domestic producers
go out of business then I'm all for it. -:)

Presumably, you think they'll hike up the price once they have a monopoly.
For this to work, it must be the case that establishing a shoe industry
takes a long time, or costs a lot more than just maintaining one, otherwise
as soon as the price goes up, the domestic industry will reappear.

Lets say this is a potential problem. How about this solution:

   The domestic shoe producers, seeing the foreigner's plans, recruit
   investors to pump in money to maintain their business at a level
   allowing them to quickly expand once the foreigner's try to up the
   price. 

I haven't done a detailed analysis (and probably am not competent to 
anyway :-), but I suspect that there is no way for the foreign producers
to come out ahead against intelligent defense of this sort, or for the
domestic consumers to lose overall.

The flaw with this plan at present is that the government would probably
slap a "windfall profit tax" on any domestic producer who had the 
forsight to mothball his factory and then cash in on exorbitant shoe
prices.

     Radford Neal