The Case For Free Trade
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by Devoid
You may have seen proposals lately like this one which call for increasing tariffs. Let me explain the result this would have.
- All goods will cost more.
- Wages will not rise correspondingly.
- You, the eNew Zealand citizen, will be poorer.
- Our supply will be lower, leading to crippling shortages in times of increased demand.
All of this to benefit a handful of companies. Companies which are succeeding, by the way. So to support raising tariffs, is to support helping out a handful of already-successful companies at the expense of the entire nation.
It comes down to supply and demand, really. Reduce supply, which of course is what raising tariffs will do, and prices rise. Wages will indeed rise somewhat *in nominal terms*, but the amount of stuff these wages can actually buy will decrease. The foreign companies currently competing on our market are the best and most efficient ones; they must be, otherwise they could not compete against our companies. Shut out the best companies and we are forced to buy from less efficient, domestic companies. Those companies are the only ones these tariffs would benefit. The rest of us would all be poorer for it.
And don't forget the impacts of having a lower supply. Time and time again, I've seen protectionist nations run into massive shortages, or entirely run out of weapons and food during key battles. There are times when nations need significantly more than they can produce domestically. And do not make the mistake of thinking that "moderate tariffs" of perhaps 10% or 20% will give us a happy balance. Anyone with experience running businesses can tell you that even a couple percent can make all the difference in choosing whether to sell in one country or the other. No company owner is going to buy an export license to a country with tariffs at even these seemingly-moderate levels. Plus, we'd be screwing over those who have already bought licenses.
Also worth mentioning is the fact that our domestic companies are pretty successful, even without tariffs. Keeping wages relatively lower keeps them tight and efficient, and able to compete in both domestic and international markets.
By all means, let me know if you see something in here you disagree with. But I've been focused specifically on the issue of trade in eErepublik for well over a year. I can say, both based on the theory and based on experience, that what I have said above is what will happen to the country's economy if these tariffs are enacted.
If you think it's right to rob our nation's citizens for the benefit of a handful of already-successful companies, and endanger our nation's security in times of crisis, then maybe you should support these tariffs. But I don't think most of us want that. I certainly don't.
- Devoid
eNZ Minister of Trade, Congressman from Auckland
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Comments
Voted and supported,
Flux Capacitor
Tl😉R
I'm sure it was good though.
Successful companies are already successful, and don't need tariffs!
I support this wholeheartedly.
Supporters of eTariffs need to read their Frederic Bastiat.
Voted
Voted. Free trade benefits the people rather equally, while protectionism tremendously helps one set of citizens but hurts another.
Put some pictures in to break up the monogamy
Devoid knows what he's talking about.
Yup
Right, but there's an additional factor to consider, which may justify some tarrif-level (or none, or a low or high one, it all depends on the numbers):
Foreign competitors do not pay eNZ income taxes; moreover they (being more efficient) bring about lower commodity prices. This is not bad at all in itself, but it means less VAT taxes (thought not too much), and more importantly drives out some domestic business, which do pay income taxes.
Which is important if the country is low on funds. And every country needs a good solid treasury to survive a war - plentiful cheap weapons and food aren't much good if you go broke early in a war.
How does raising tariffs benefit a select few in the country? And with some countries currencies being less of worth then the eNZ currency, wouldn't that result in lowered prices which our companies producing here can not sell at and still make a profit. If you can produce a significant amount home-grown, why not raise tariffs? I can see if products are hard to come by, or if you don't have the resources necessary to produce that specific product.
"If you can produce a significant amount home-grown, why not raise tariffs? I can see if products are hard to come by, or if you don't have the resources necessary to produce that specific product."
Because if you Raise Tariffs the buying power of the Worker (Or anyone for that matter) weakens, for already state reasons, did you even read the article or did you just scroll and post?
Devoid knows what he's talking about! Free trade!
How to robbery NZ? Very simple – declare orientation “Free trade” and mask goals.
i support this article... i am against higher taxes, specially the protectionism is really bad.
even though i understand what they're trying to do... it's raising money to get gold for MPPs...
but still, this is just not good.!
lakotnyk
I understand why all USA origins will support this article.
Did you ask yourself Why?
Who care about NZ economy - just take money without any investment in our economy? That’s basic motivation for this pressure in media and resist against protection domestic economy.
Why not to open more company’s on NZ and then we can choose best paid work?
u can't have good competition on closed market... there should be fair taxation on all accounts... 50% import tax on grain per example would mean that only eNZ production can compete on this market, why would we want this? why do we feel that we need such import tax? most grain companies in eNZ are producing to export, we don't rly need such tax at all...
do we think that someone will sell from outside countries here and pay 50% tax? ofc not... noone will, and that is wrong.!
as for other taxation... 25% on food import and 10% VAT... will only mean that we will be getting protectionism here, coz only our companies will be competitive on this market and all others will be too stressed with taxes, so they will rather not sell here.
it's true we have enough of our production, and that we can supply for our demand, but this will be ok only in normal situations, when there will be a great need for food (also weapons) because of battles etc... there WILL BE shortages, and prices will rocket skyhigh... and who will benefit from this? only eNZ companies, while the workers will only become poorer, their wages will stay the same, and eventually they will not be able to help eNZ when eNZ will need them...
as for VAT... that's a tax that only raises prices of goods, and that means that mostly hurts the new players, the ones with low wages/low production skills, since for higher skilled, better paid players the rise in prices represents a smaller percentage of their disposable income.
Do we want to get rid of new players in eNZ ?!
eventually the money eNZ collects from taxes will go for MPPS, wich we need, and other crucial stuff, but more money in the eNZ pocket will also mean more chances for someone from the government to steal or just leagaly transfer it somewhere...
Funny story. : ) )
If you don't trust CP and MoF why you elected they? Is that mean No tax No money = no chance to steal?
My opinion is that this law is needed becouse with salaries this high, a land with small population must protect domestic companies...
Where the our money goes when foreign companies sell in our market, and buy grain and other resources in their homelands?????
Why let others earn, and poeople who invested in NZ more than 20 g for a licence work with losses???
This isn't permanent law, when market found a balance, and even some day NZ take war actions, you can change the law within 24 hour, or isn't it so???
This way you are only crippling your own economy, try to sell our products in other countries and you will see what profit can you make, and how high are Import taxes....
MCMOOX je bio ovde!!!!