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From: zhahai@gaia.UUCP (Zhahai Stewart)
Newsgroups: comp.sys.amiga,comp.sys.atari.st,comp.sys.ibm.pc,comp.sys.mac,sci.electronics,comp.arch
Subject: Re: GATT declares U.S. - Japan chip pact illegal
Message-ID: <347@gaia.UUCP>
Date: 7 Apr 88 17:39:25 GMT
References: <2441@unicus.UUCP> <1259@hubcap.UUCP> <1641@ncsuvx.ncsu.edu>
Reply-To: zhahai@gaia.UUCP (Zhahai Stewart)
Organization: Gaia Corp., Boulder, CO
Lines: 39


The problem with the Free Enterprise Forever Without Government Interference
thing is that it has not worked.  In practice, the US Industrial base was built
during the last century with the help of government tariffs (to protect our
fledgeling industries, including steel, from European competition) and subsidies
, for example, the railroads were considered essential to development, so the US
government gave away massive amounts of land in order to get people to build the
railroads.  Likewise, Japan Inc has been beating us with a system which involves
much more Government intervention than ours does; they have cleverly used
trade barriers (as we did) to boost their industry.  IT WORKED.  The free 
enterprise ideologues tend to ignore realities in favor of purity of thought.

On the other hand, the key to successful trade restrictions is using them
intelligently for a strategic purpose - this is what both the US in times past,
and Japan today have done.  Simply imposing them to prop up a dying industry,
as opposed to supporting a new or revitalized industry, will not work in the
long run.  So I am concerned that many calls for trade barriers will not be
used for any strategic goal, but just to delay and make worse the inevitable.
For example, the import car restrictions propped up the US auto industry, but
may not have had much impact on its overall competitiveness except to make it
more complacent.  (Or maybe not - I am not an auto expert).

We are caught between the free enterprise ideologues (the voodoo economics which
claimed that we would have reduced the national debt by now rather than 
increasing it), and the short-sighted protectionists who are trying to ignore
the market forces.  What we need are people who recognize that both market
forces AND judicious government intervention have to work together for the
system to be competitive.  The Japanese have that; to some degree, so do many
European countries, who have been doing well at trade with the US despite their
"socialized" economies (which the ideologues would tell us should make them
totally unable to compete with the US).

Oh, well - let's turn the conversation back over to the ideologues.  I can only
hope that a few of them will be weaned from their pipe dreams and get back to
reality - to provide a realistic counterbalance to the non-strategic 
protectionists.  Shalom.

-- 
Zhahai Stewart
{hao | nbires}!gaia!zhahai