>"We saved some money" is how economics works in price competitive markets. This is a result of many players doing what keeps each one competitive, but without collaborating on what the large scale effects are down the road.
An excellent and accurate elaboration of the modern economic theory that led us, nevertheless, to our current precarious position.
Modern economic theory doesn't disallow subsidies - it's very possible to exist in a primarily capitalist society with either tariffs or domestic business subsidies to ensure certain key industries remain on local shores - it might be politically infeasible for such laws to be passed in the US, but it is a very reasonable response.
The United States has all kinds of tariff and other subsidies for key industries. Foreign airlines and shipping companies are literally blocked from providing domestic US services. (That's also why all major US cruise ships touch a foreign port in their journey). Steel and autos and much of agriculture are also heavily protected.
These are all anti-consumer and bad public policy.
> That's also why all major US cruise ships touch a foreign port in their journey
In a pedantic sense, major US cruise ships don't need to touch a foreign port in their journey. The catch being there is only one major US cruise ship - The Pride of America, which generally does Hawaiian cruises: https://en.wikipedia.org/wiki/Pride_of_America
The other major cruise ships you see operating in the US are actually foreign-flagged so they can avoid US environmental, gambling and employment regulations, etc. These are the ships that must touch a foreign port during their journeys.
Good info. But why is this bad policy? Is globalization really just better? Because "the consumer" (whom is usually also an employee/business owner and a citizen) may be able to buy stuff for a bit less?
That's not the right question to ask. The right question to ask is 'Who is this bad for?'
The Jones act, for instance, is good for US shipworkers, and for enforcement of US shipping laws, but moderately bad for Hawai'i, and really, really bad for Puerto Rico.
Who do you care more about? Preserving the comfort of the continental American middle class employed in maritime transportation, or a bunch of people in Puerto Rico? The answer to that question determines how you see the Jones act.
> The Jones act, for instance, is good for US shipworkers, and for enforcement of US shipping laws, but moderately bad for Hawai'i, and really, really bad for Puerto Rico.
Alas, the Jones Act isn't actually good for US shipworkers in general. The Jones Act makes it so that there are nearly no US shipworkers in the first place.
(However, the few US shipworkers that do exist are to a certain extent protected by the Jones act.)
Left unchecked, globalization will likely lead to just a single huge shipworking company, or maybe two or three. Does that benefit shipworkers in either the US or Puerto Rico?
Generally anything that gets in the way of pure competition shifts the incentives that players have to make good products or services. When this happens, the consumer is usually the one that gets the bad end of the stick with faulty goods or services, while the producer still gets to keep the proceeds.
Yes, but looking at this only from the perspective of a consumer seems rather limited. One additional consideration, the one we're talking about here, is the importance of being somewhat self-reliant when shit hits the fan.
And even if only consumers matter, what you're saying only hold in theory, given a 'perfect market'. In practice, consumers have imperfect (read: atrociously bad) information, and big corporations hold many unfair advantages.
Unfair advantages, or simply advantages? Companies have a hard enough time surviving in a market where everything is not hitting the fan, their concern about surviving when shit hits the fan is on the fringes of things to worry about.
I absolutely never said consumers are the only thing that matter. I don't know where you read that between my lines. I said that in a market that is propped up by subsidies, the consumer is the one that gets hurt the most.
It doesn't disallow them but it discourages them - the ruling class of the Western world has been on the side of globalization for many decades now (still is) and that is really what is in question.
An excellent and accurate elaboration of the modern economic theory that led us, nevertheless, to our current precarious position.