Why is a closed economy a bad thing?

Why is a closed economy a bad thing?

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Trade increases the value of things.

free trade leads to better more efficient outcomes and greater economic welfare. countries have comparative and absolute advantages in producing stuff.

can eat polish apples instead your owns

There is no bad economy or bad regime. There are just stupid people who feel themselves very special to not to follow it. And these people ruin everything.

That's what Hoxha said too

>hey, you have a nice thing there, I'd like to buy it from you
>REEEE FUCK OFF
>okay, I'll go buy it from someone else then, enjoy being poor.

>hey, I notice you kinda need this thing I can produce cheaper and better than you do because of circumstances of my natural resources and other factors, would you like to buy it?
>REEEEE FUCK OFF
>okay, I'll just go sell it to someone else then, enjoy having to make your own thing and it being shitty and expensive for your effort.

America would be 4th world without open trade

>There is no bad economy or bad regime

i like +15 economy
its the greatest invention of humankind

Because in the case of A country like America you're only benefiting from a division of labor of our working population, rather than the world's working population.

Some econimies and regimes just have more useful tools. So yes, they're better. If everything depends on a small group of unpros, they will probably ruin things or progress very slow (monarchy), if people are elected among pros by those pros, you would see incredible things.

/thread

its was actually opposite for Edo Japan iirc

>hey japan do you want to trade or fucking not? t. english ships
>REEE FUCK OFF t. japan
>should we beat the shit out of you? t. english ships
>hmm t. japan
>edo regime colapses anyway
>borders are open, japan cucked

If you want to be like us, then no, is not a bad thing. (30% poverty)

Because jews from big banks cannot profit with trade or financing if your country is protectionist. Just see how the Third Reich, South Africa, Libya or Syria got shut down because the didn't have any type of debt with globalist banks or they didn't want to open completely trade borders.

but you're pseudo-closed, like russia

Look at Brazil, imported electronics are luxury appliances

barriers != closed

closed economy is close to autarkia

...

It isnt.

only bad for riches essentially and they eventually try to drag normies into the total war.

many enterprises have potential of overproduction for the demand of only one country.
So capitalists urge their country to invade others to gain more market. that was the reason of two world wars and the preceding late colonial period.

It depends on the country.

For banana republics it might be relatively beneficial. But for US it'll be disasterous.

Well fucking jeez I don't know, why don't we consult some Latin American posters about the ISI development model.

glass quality in north korea

best korea

Economies of scale. All of humanity's wealth is based on the principles of division of labor, specialization and mass production. The bigger the economic space, the better off is every individual in that space.

Trade is a voluntary activity for mutual benefit. If it wasn't it simply wouldn't take place. That's also why all that rambling about China's or Japan's or Germany's export surplus is total nonsense.

Those imports are paid with debts that are never paid off.

Ever lasting Export surplus is very bad. How do we give back the money? With tourism or development aid or via the EU?

Nope. That's a common misconception that arose during the sovereign debt crisis of Europe and has beend stupidly repeated ad nauseam.
The budgets of states don't have anything to do with foreign trade. Greece's state budget doesn't change when a German car manfacturer sells cars to a Greek logistics company. Similarly Mr Schäuble doesn't get those profits. They are private profits.

If anything states always benefit from cross border trade, the importing state because of sales taxes and the exporting state because of taxes on earnings. It's for mutual benefit.

This

Somebody gets indebted, the households, the companies and then the banks. And guess who will be in to save the banks. Where does the souvereign debt come from?

Entropy

>If anything states always benefit from cross border trade,
if they benefit too much they got Dutch disease tho and other problems

en.wikipedia.org/wiki/Dutch_disease

tldr trade is not everything, its often cancerous

>Somebody gets indebted
Only for a short amount of time. The average time a payment is open in cross border trade is something less than 2 months. In the economy information about bad payment practices have a habit of spreading rapidly. It wouldn't keep going if payments remained open forever.

>Where does the souvereign debt come from?
From the states' bad practice of living beyond their means, i.e. to have expenses greater than you income. This went on for decades before the crisis. The crisis was just a trigger for reevaluating interest on government bonds which made refinancing the states' bad behaviour more difficult, it was not the cause of sovreign debt.

good post

The Dutch disease isn't a really disease. Many in the world would like to have the problems of the Dutch. The Dutch disease is just an observation of relative decline in non-booming sectors. Emphasis on relative.

This. Why retards think the majority of public spending comes from bailing out failing banks I don't understand.

its very real disease in russia tho

we basically have the oil and gas pipe and the rest of country is simply redundant

you can't beat the oil/gas industry then the whole country becomes its bitch more or less

Banken bürgen in internationalen Geschäften dafür, dass das Geld gezahlt wird. Wenn der Einkäufer im Land pleite geht haben die Banken sehr wohl ein Problem.

Where did the money from living beyond their means then vanish? Pro tip, it didn't vanish it was somewhere else. And guess where.

It went in our export surplus.

for you

Yeah, but Russia was always like that. It's nothing new. As Yegor Gaidar pointed out, oil and grain were the economic causes of the Soviet collapse. Nothing has changed since then. For prosperity you'd first need capitalism. Earlier you had communism, now you have fascism, i.e. the amalgamation of the state and the economy. Both are disastrous. Capitalism needs rule of law and freedom of contracts. You lack the rule of law completely and have inhibited freedom of contracts. So you're bound to have a shit economy. Your abundance in natural resources is not the cause of your economic woes.

>muh free trade economic growth is the point of life objective progress xDmao space colonization when, AMIRITE? ^^ praise Musk

>this german

You think you know what you are talking about, but you don't.

American ships actually.

Banken führen ein tägliches Clearing durch. Damit sind die offenen Bestände netto sehr viel kleiner als das Handelsvolumen.

Banken haben immer ein Problem, wenn Kunden, die sich bei ihnen Geld geliehen haben, pleite gehen. Das ist kein Spezifikum von grenzüberschreitendem Handel.

>Where did the money from living beyond their means then vanish? Pro tip, it didn't vanish it was somewhere else. And guess where.
It went there where the state spent it. That is mostly wages for government employees, but also cases of silly megalomanic unnessessary construction projects, like e.g. the Ciudad de las Artes y las Ciencias:
commons.wikimedia.org/wiki/Category:Ciutat_de_les_Arts_i_les_Ciències?uselang=de
Which may look nice, but has no frigging chance in hell to ever yield a return on investment. Yes, the money doesn't vanish. And no one here ever claimed it did.

Dutch and British ships did that 200 years before

Hard to say who really opened Japan. USA just gets credit for it

Where did the money go then when the state did not have it anymore. Did it go to the citizens? Did it go to other countries? The state paid somebody to build something. Even if the houses built were worthless, where did the state money go?

I can tell he's an austerity supporter

and that is the point where we come back to the export surplus and why it is bad. Because in the end it is state money of other euro countries that goes into german export surplus. The Euro States never get the money back via taxes.

If the state pays for building houses on credit then the money goes to the construction companies. And these are far and away predominantly local. That's why the state does this shit in the first place. It's an easy way to buy voter's approval, but has long term consequences. The Spanish or Greek state also doesn't buy all those German cars and machines which make up the bulk of German exporting prowess. It's private companies which buy them. They can't send the bill to their government just bcause the product comes from accross the border.They have to pay for that themselves. And similiarly the German ministry of finance doesn't reap the profits of those sales. State budgets and budgets of private companies or individuals are different things. Don't confuse them.

The people the state paid.

It goes something like this

State takes on a resource through debt(taxes or actual debt).
State uses this resource to buy something.
99% of the time it buys from a domestic producer.
This domestic producer needs materials though so it buys from a wholesale producer.
This wholesale producer could be either a domestic or foreign company. This company utilizes resources from somewhere.
If it is foreign, some money flows out of the country through more imports.

But the net resource amount remains the same, unless, as sometimes happens, the markets/companies misprice the resource significantly and this causes a net loss in the system.

In most nations, public spending is a GDP multiplier. The problem is that sometimes this can lead to mispriced resources (think housing bubble/€150 oil in 2008).

More expensive goods, particularly imported electronics like video games and cars.

But free trade should never be a value unto itself unless you're a dumbass libertarian. In a context as inequal as the global economy, free trade will always be unfair trade.

Some degree of trade regulation is necessary to prevent elites in the first world from exploiting everybody else, as we're seeing right now. Third world countries are especially screwed by this arrangement, as free trade leads to domestic industries being destroyed or hijacked by western corporations who pay their foreign workers jack shit.

It's dumb for every country to produce and consume all their own shit when it's cheaper and more effective for different countries to produce different things. The US can probably pull off a self-sufficient economy but it would make shit more expensive, probably lower quality, and potentially wreck our service sector as millions are forced into agriculture and manufacturing.

When small countries try having a closed economy, you get North Korea.

What about this simple example here:

Greek state pays good money to their civil servants. Greek civil servants buy german cars.

Money gone. End of story.

>And these are far and away predominantly local.

Yeah and wages are low here. Most money goes to steel, machines, housing technology Steel comes from China, house technology comes from Germany.

And what are HochTief, Strabag? Big projects are developed by big companies.

Money again gone.

>millions are forced into agriculture and manufacturing.
What is digitalization and automatization?

>Money again gone.

Care to explain. Big companies make up half the economy.

Not yet feasible

The US is the most protectionist developed economy and trades the least as a % of GDP.

How much food is the US actually importing?

These are not greek companies building the highway or whatever big project.

That's not relevant to the argument. If a company is domestic, and the government purchases from them, the money remains in the country. No matter how big or small the company is.

The US economy until 1980 was fast growing and the world's largest by a large margin. Guess what else. The US traded less than 2% of its GDP with the rest of the world during that time.

>Yeah and wages are low here.
In Spain an entire generation chose to not finish school but to go work in construction instead because the ever growing housing bubble fueled by state credit provided such comfortable wages even for uneducated people that finishing school was simply not seen as opportune anymore. This has disastrous consequences now.

>Most money goes to steel, machines, housing technology Steel comes from China, house technology comes from Germany.
And for mutual benefit, like every trade. Or else it simply wouldn't take place.

>Money again gone.
Money gone, goods and services gained. Just like agreed in the trade. Or in more abstract terms: capital in one form in exchange for capital in another form.
You stupid mercantilist still think trade is a zero sum game where the profit of one party must be the loss of another. Jesus, a quater millenium after Adam Smith and this nonsense has still so many fans.


HochTief is Spanish since 2011 btw.

in free trade of goods and services it doesn't matter if the company is domestic. It probably won't be in a shithole like Greece or Spen. On one way or another the money will find it's way out of the country and into the wallet of some investment asshole that just sits there, gets richer and pays no taxes at all.

What do you say to the citizens buying foreign products? If these citizens are mainly paid through deficit spending as in Greece, you have a problem.

Didn't work for us or any Latin American country. All it did was halt technology and make us even more third world.

On the long run there is no benefit in buying consumer products from other countries when you don't somehow sell them something of equal worth. Somebody has to pay. But you can go on believing in pure economics and when the masses revolt you will see where that got you.

It's suboptimal because there is less competition between companies.
You pay more for less.
What's more some productions are very very expensive, why do you think there are 2 relevant cpu companies? Those would have trouble supporting themselves the way they are in a noninternational market. So a closed economy will kill entire productions.
What's more the same economy of scale applies to cultural exports even more. All the jobs holyhood provides would be in danger when more than half their revenue disappears over night. They'd have to scale back a LOT.
Another aspect is raw resources, if oil disappears or becomes too expensive it could mean worse things than anything yet listed.

>On the long run there is no benefit in buying consumer products from other countries when you don't somehow sell them something of equal worth.
That's true for every purchase, no matter if it's cross border trade or purely domestic trade. It's equally bad in the long term to buy football stadium tickets of your local team or visiting the strip club around the corner when you can't really afford it. It has nothing to do with foreign trade. Yes, one should live within one's means. What a surprising finding, duh...
And that's true for every entity, be it an individual, a private company, a community a club or a federation of countries.

>2 relevant cpu companies?
they also put spyware in your cpus too, don't forget this benefit

The masses have a problem with automation, not international trade, but are too dim to see it.
Look at the work participation index, it's not just dropping in developed countries, it's dropping in China too.
Better invent new jobs.

>spyware in the cpu
I doubt it.

boingboing.net/2016/06/15/intel-x86-processors-ship-with.html

Then argue with him instead of being a passive-aggressive little bitch.

>business class
>you have to configure it for it to work
oh yes, big spyware, very spook

An argument for free trade, exchange and staying in a more populous economic space:
youtube.com/watch?v=OLHh9E5ilZ4

>went to hardware store the other day
>ask for a half decent set of calipers
>worth 15 US$, shit quality, made in Argentina
>browse alibaba that same day
>chink calipers
>better quality
>10 US$
>of course the import tax is around 50% so there's no reason to even try

Now extrapolate that to every industry. Local manufacturers provide shit at high prices since they don't have to compete even half as much. Everything from clothes to tools, to machinery is more expensive here, and not a better quality. And especially foreign made stuff.
You know how people say that public employment doesn't really provide anything to the economy? It's the same shit with jobs created through protectionist policies.

>business class
Currently, AMT is available in desktops, servers, ultrabooks, tablets, and laptops with Intel Core vPro processor family, including Intel Core i3, i5, i7, and Intel Xeon processor E3-1200 product family
en.wikipedia.org/wiki/Intel_Active_Management_Technology

>you have to configure it for it to work
no afaik, its always working

>>of course the import tax is around 50% so there's no reason to even try

are you sure? we can buy tax-free under some sum (about 1k$ probably) from chinks

I think ours was fairly low. Like 150 US$ but I haven't checked it in a while.
I'm actually keeping track of a few chinese made stuff on alibaba.com and I'll eventually buy a bunch of them so they add to just below that limit.
Thing was that I really needed those calipers right at that moment, couldn't afford to wait the delivery

our limit is actually per-item

jews wanted to make monthly/yearly limit too but there was some butthurt because aliexpress/alibaba is part of our economy atm

Just checked. It's US$300 in total per year. Not even per item.
We get euro tier taxes with african levels of corruption and services.

that sucks
personally i don't buy much from chinks its just easier then irl shops