From a professor of international political economy

As a matter of fact I am not opposed to all tariffs. In fact, in the case of lower income countries I think that tariffs often have a strong and positive role to play in the development of economies, firstly by protecting local business and secondly by providing an easy, cost-effective, and desirable tax base that is charged on the effective rent that they are due for the loss of their natural resources.

What does that last clause even mean?

But so too, necessarily, in situations such as this (but not in the case of low income countries, as I previously described) well-being is reduced because whilst there are, undoubtedly, problems with the Ricardian theory of trade, it is also undoubtedly true that some countries do have a competitive advantage over others in some activities, and it is to the overall benefit of all that they be permitted to exploit that advantage so long as others are able to do so in their own area of advantage as well.

It’s comparative advantage, dingbat.

And yes, it gets worse:

James E says:
March 8 2018 at 12:16 pm
“easy, cost-effective, and desirable tax base that is charged on the effective rent that they are due for the loss of their natural resources.”

Is there a typo in there? Isn’t the tariff paid to the importing country, not the exporting country?

So if a developing country charges tariffs on imports (as part of its tax base and to protect domestic industry), aren’t the imported goods using up natural resources of the exporting country (ie another country), not those of the importing country charging the tariff?

Reply
Richard Murphy says:
March 8 2018 at 12:22 pm
No: many of these were effectively export charges and were for a long time considered unacceptable

I think they are just fine

Reply

Ritchie thinks export tariffs are a good idea. What he’s trying to crawl to is the idea that the taxation of resource rents is a good idea. Which it is. Stunningly good idea. But that’s different from export taxes. Because resource rent taxation is upon all uses of the resource, not just that portion exported. Tax the hell out of the location value of, say, oil. But don’t distinguish between domestic and foreign consumers.

Sigh, no wonder he thinks there’s a problem or two with Ricardo. He doesn’t understand Ricardo.

11 comments on “From a professor of international political economy

  1. Tim – slightly o/t but if you’re looking for a bit more source material of academic idiocy then the university strike over pensions is a rich seam. Lots of media lecturers opining on finance in utterly clueless terms and Marxist sociology lecturers explaining why they shouldn’t have to abide by the same economic conditions as everyone else.

    Apologies if you’ve already covered this, been away from here for a while. Hi everyone!

  2. “…firstly by protecting local business…”

    In a developing country, doesn’t the often weak currency protect local businesses by making foreign imports expensive?

  3. There was a time, of course when export duties on wool were a major source of revenue to the crown. Those were the days!

  4. TMB: Well it gave Chaucer an income so he could scribble away in-between weighing bales of wool, but was also a major factor in the Great Uprising, so scorecard mixed.

  5. “Dr Jo Grady of Sheffield Uni”

    Ah, I managed to track down her scribbles. Basically, complaining that if she doesn’t turn up to work she doesn’t get paid.

  6. Pendantry, BICR, but the “great uprising” was the Indian Mutiny – the “great rising” was the Peasants’ Revolt.

  7. Ah, I managed to track down her scribbles. Basically, complaining that if she doesn’t turn up to work she doesn’t get paid.

    And on international women’s day too. Shameful! A fair day’s pay for no work! A slogan to unite the public sector under.

  8. Re Dr. Jo:

    “Jo’s overall approach ‘teaching and learning’ is to provide students with a critical and engaging understanding of the contemporary workplace and labour market, which is underpinned by theory, but also empirically driven.”

    Alternatively, students could just go and get a job…..

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