Re: Unemployment is actually worse than numbers showFeb 5th, 2012
The masses control inflation by making decisions when to buy if companies want to stay in business they won’t gouge the consumer.
If you raise tariffs, you may be reducing competition for certain specialized companies, though even that might be possible to regulate with enough regulation and the added bureaucracy to enforce the rules.
Beyond that though, there is also the reintroduction of make-work jobs mainly via the shipping industry. For example, imagine a company with a factory in Seattle and one in Montreal. With free trade, the company would be smart to reduce costs by having its Seattle factory cover the Western North American market, and the Montreal plant the Eastern market. The moment you reintroduce protectionism, both plants suddeenly have to pay more to ship their products further afield in each respective country, thus pushing shipping costs up.
Does this create jobs for truckers? Sure it does. Does it increase national wealth? Absolutely not, since those truckers are not producing anything of economic value, and considering that they're doing a job that would be totally redundant in the context of free trade, we must conclude therefore that those are purely make-work jobs, thus a burden on the economy, the costs being passed down to consumers.
While I can agree that protectionism creates jobs, it does not create wealth. Free trade does kill jobs indeed as it eliminates such make-work jobs especially in the shipping and other such industries, and definitely governments have to deal with this reality by providing quality trades and professional training programmes for the unemployed to help them re-enter the job market in the new economically productive jobs that are created by people spending their extra money to buy other products and services that they would otherwise have spent on the extra shipping overhead costs for products under protectionism.