Showing papers by "Robert W. McGee published in 1996"

The Philosophy of Trade Protectionism, its Costs and its Implications

Abstract: This article is divided into four sections. The first section is on the philosophy of protectionism and reviews several of the most commonly given reasons that have been used to justify protectionism over the past few hundred years. The author points out that these arguments generally support the producer's position, often to the detriment of consumers and the general public. Each argument is analyzed empirically and logically. The general conclusion is that the case against protectionism and in favor of free trade is strong from both an economic and liberal democratic perspective. Part two takes a look at the cost of protectionism, with emphasis on the case in the USA. The auto, steel, textile and agricultural industries are given special attention. Some nonmonetary costs often overlooked or ignored by many commentators are also discussed. These costs include the net deadweight employment loss, social harmony costs, reduced choice and the violation of rights that is inherent whenever consenting adults cannot trade. Part three examines antidumping policy in the USA from both a theoretical and practical viewpoint. After a review of the economic and legal background of the antidumping laws and a look at how they are administered, the author proceeds to examine the many problems inherent in the present policies, such as the many computational problems, the harmful effects of antidumping policy and the weakness of the predatory pricing argument. The section concludes with a discussion of the philosophy of antidumping policy and examines issues such as the ethics of using the law to batter the competition, the irrationality of antidumping as a policy, a rights approach to antidumping and the relationship between antidumping laws and the legitimate functions of government. Part four discusses the implications of United States protectionism for international trade in Europe. The author examines the options for trade policy in Europe, with emphasis on emerging market economies, from both the rights and utilitarian perspectives. The author concludes that, while total and immediate free trade is the best policy, policymakers may find it necessary, for practical reasons, to adopt a gradualist approach that involves temporary protection. Of the two options examined -- infant industry protection and unemployment payments -- the unemployment payment approach is the more efficient.

Should the Law Favor Consumers or Producers? A Look at the Effects of Protectionist Trade Policies

Abstract: There is no doubt that protectionism costs. But it is less clear exactly how much it costs and who pays. And while protectionism results in a deadweight loss -- there are more losers than winners -- some individuals and groups gain from protectionism. And it is those who stand to gain who have the ear of the legislature, at least for the most part. Part I of this article provides an introduction and overview of the topic. Part II provides an overview of protectionism and the costs associated with it. Part III examines the monetary costs of protectionism, with emphasis on the costs of protectionism in the auto, steel, textile and agricultural industries. Part IV discusses the nonmonetary costs associated with protectionism, such as unemployment, reduction in social harmony, reduced choice and rights violations. Part V concludes that protectionism is a bad policy, whether viewed from a utilitarian or rights perspective, and recommends that laws that support protectionism should be repealed because protectionism is not in the public interest.

Antidumping Laws as Protectionist Trade Barriers: The Case for Repeal

Abstract: Antidumping laws were designed to protect domestic industry from foreign competition. They protect producers at the expense of consumers, which results in higher prices, lower quality products, less consumer choice and a general lowering of the standard of living for the vast majority of people. Antidumping laws also destroy more jobs than they create. Part I of this article provides an introduction and overview. Part II reviews the theory and practice of antidumping law in the United States. It looks at the economic and legal background of the area, the administration of the antidumping laws, and computational problems involved in arriving at an antidumping decision. It also provides examples of antidumping investigations in the areas of autos, steel, textiles, agricultural products, and televisions and discusses the harmful effects of antidumping policy. It also explores the predatory pricing argument as applied to antidumping. Part III discusses some philosophical issues relating to antidumping law and policy. It views the antidumping laws as a club that can be used to batter the competition at the expense of consumers and questions the ethics of using government for this purpose. It also points out the silliness of antidumping policy, since it in effect protects consumers from low prices, and develops a rights-based argument against antidumping laws. Part IV concludes that antidumping laws are harmful, serve no useful purpose and should be repealed, the sooner the better.

A Discussion of Protectionist Trade Policies in the USA, Japan and Korea

Abstract: Part I provides an introduction and overview and discusses topics such as the present state of Japanese-American trade policy, the trade deficit mentality, antidumping laws, auto industry protection, exchange rate manipulation, Super 301 and the hypocrisy of the United States position. Part II discusses the present Korean-American trade policy and includes issues such as U.S. trade barriers to Korean exports, tariffs, quantitative restrictions, antidumping and antisubsidy duties and Korean protectionism. Part III presents conclusions.

Some Ethical Issues for Accountants in Antidumping Trade Cases: An Examination of Recent Case Studies With Emphasis on Latin America

Abstract: A search of the accounting, trade and ethics literature failed to find a single article that discussed the role that accountants play in assisting in the data gathering process of a trade investigation. Yet there are serious ethical issues that need to be addressed. Certain aspects of trade investigations are unethical, whether one takes a utilitarian or rights view of ethics, and accountants play a role in this unethical conduct. This paper looks at those issues and makes recommendations for change. The author calls for the various state and national accounting organizations to closely examine the ethical issues involved when accountants take part in an antidumping investigation and establish guidelines for ethical conduct.

Antidumping Laws: A Bright Future for a Bad Idea

Abstract: This paper reviews the evolution of antidumping laws, the negative effects they have had on trade, and the recent changes in these laws that resulted from the Uruguay Round. The author then focuses on the human rights abuses that are inherent in any antidumping law regime and concludes that the only way to stop such abuses is to abolish the antidumping laws, the sooner the better.

U.S. Trade Policy Toward the People's Republic of China: Some Thoughts and Suggestions

Abstract: This Policy Analysis discusses some of the restrictive trade policies the United States imposes on the People's Republic of China. Special attention is given to recent Customs Service policy and antidumping actions that have been initiated against the PRC. The author concludes that these policies are counterproductive and should be changed.

Do We Need Protection from Imports? A Reply To Alan Tonelson

Abstract: This paper was written in response to an article by Alan Tonelson, titled "Beating Back Predatory Trade," which appeared in FOREIGN AFFAIRS, Vol. 73, No. 4 (July/August, 1994). After reading Alan Tonelson's article defending protectionism, the authors felt compelled to respond to his many incomplete and inaccurate assertions. He resorts to loose terminology and straw men to support his mostly untenable positions and makes a policy of using selective facts and statistics while ignoring the total picture.

Some Recent U.S. Antidumping Cases Against Korea 1

Abstract: This paper presents an overview of antidumping laws, summarizes some recent antidumping cases that have been filed in the United States against Korean companies, and discusses some moral aspects of initiating an antidumping investigation that have been ignored by other researchers and commentators.

Trade Policy in the Computer Industry: Suggestions for Change

Abstract: This article reviews some recent anti-dumping and countervailing duty investigations that involved various segments of the computer industry. Part I provides an overview of the anti-dumping laws. Part II discusses administration of the anti-dumping laws. Part III reviews recent anti-dumping investigations involving segments of the computer industry. Part IV points out some of the harmful effects of the anti-dumping laws. Part V presents some philosophical issues. Part VI offers conclusions and recommendations. The authors conclude that the anti-dumping laws violate property and contract rights, are harmful to the computer industry in particular and to trade in general, and should be repealed, the sooner the better.

Some Recent Studies on the Application of the U.S. Antidumping Laws Toward Malaysia and Thailand

Abstract: United States trade policy has been criticized on a number of counts in recent years. The last few presidents have advocated free trade and the free flow of goods and services and have taken steps to reduce some trade barriers such as tariffs. But other policies, most notably U.S. antidumping and countervailing duty enforcement actions, have had the effect of reducing trade and raising the prices that American consumers pay for a wide variety of products. This paper begins with an overview of antidumping theory and practice in the United States, then examines some recent antidumping and countervailing duty actions that have been taken against companies and industries in Malaysia and Thailand. The paper concludes that these actions have been counterproductive in that they have a chilling effect on competition and trade and result in higher prices for American consumers.

Why Trade Deficits Don't Matter

Abstract: This paper takes the position that trade deficits are irrelevant from a policy perspective and that any attempt to reduce them is counterproductive and violative of individual rights. Hardly a day goes by that the media do not mention some international trade problem such as the trade deficit. The general tenor of the story is usually that trade deficits are bad for the U.S. national economy, with the implied or express conclusion that something should be done to reduce them. The choice of terms used to describe trade -- voluntary exchange -- makes it sound like trading with foreigners results in disaster: we are being "invaded" with foreign goods; foreign goods are "flooding" the market; foreigners are "dumping" their products. Senator Donald Reigle has been quoted as saying: "The continuing Japanese attack on our basic industries is another Pearl Harbor. The time has come to close America's door to the flood of Japanese imported products."(Ekelund and Tollison, 875)

Who Really Benefits from Liability Litigation

Abstract: Various studies have estimated the annual cost of product liability litigation alone (not to mention other kinds of liability litigation) in the United States to be between $80 and $117 billion. That's more than the combined gross national products of Bolivia, Chile, Costa Rica, Ecuador, El Salvador, Guatemala, Honduras, Nicaragua, Panama, Paraguay, Peru and Uruguay or about equal to the annual profits of the top 200 corporations in America. But that's only the direct cost. When you add the indirect costs that are incurred in order to avoid liability -- needless testing, excessive liability insurance costs, etc. -- the total could reach as much as $300 billion a year -- the combined gross national products of Austria, Luxembourg, the Philippines, Portugal and Switzerland. This article discusses the liability litigation situation in the United States.

Protectionism and Morality

Abstract: The vast majority of articles and books that have been written about trade and trade policy -- nearly all -- look at trade from a utilitarian perspective. Utilitarians take the position that if free trade is a good policy, it is good because the vast majority benefits. Free trade gives consumers more choices. It gives them lower prices. It creates more jobs than it destroys. It is a positive-sum game. An underlying assumption of most utilitarian-based trade arguments is that governments have some inherent right to regulate trade. This article looks at trade policy from a different perspective. While utilitarian approaches to trade have some value, and while utilitarian arguments often --and rightly -- conclude that free and unrestricted trade is the best policy, they do so for the wrong reason. This article points out that the real reason why totally free and unrestricted trade is good is because it is the only trade policy that does not violate individual rights. Part I provides an introduction and an overview. Part II reviews utilitarian approaches to trade policy and points out the weaknesses of the utilitarian approach. Part III presents the rights approach to trade policy, which is superior to the utilitarian approach for several reasons. Part IV summarizes the article and presents conclusions.

Some Thoughts on Acid Rain, the Clean Air Act and Implications for Acid Rain Policy in the USA and Europe

Abstract: Part I discusses the Acid Rain Report [National Acid Precipitation Assessment program 1990 Integrated Assessment Report], the ten-year scientific, technological and economic study mandated by the U.S. Congress and conducted at a cost of $570 million. This study found that ozone, not acid rain is responsible for killing trees. What is disturbing is that the media mostly ignored the NAPAP findings, and continue to speak of acid rain as though it were a problem of crisis proportions. And what is worse -- the U.S. Congress passed the Clean Air Act of 1990, which was intended to deal with the acid rain problem, without even looking at NAPAP's study. Part II discusses what acid rain policy should be.

A Solution to the Education Crisis

Abstract: One of the largest expenditures of state and local governments in the USA, and of various governments at all levels in other countries, is for the provision of education. In the USA, states provide a free public school education to students for the first twelve years, and subsidize tuition at state universities thereafter. As a result, public education has become a near monopoly because privately provided education finds it difficult to compete on price. Where private education exists, it can compete only because of nonprice advantages. This near monopoly position with regard to education exhibits many of the attributes of monopolies in general -- the price is higher than would be the case in a market system and the quality is lower. This phenomenon has been recognized, and some economists and others have advocated breaking up this monopoly by the use of a voucher system whereby parents can purchase education for their children by presenting these vouchers to the appropriate authority. Vouchers inject choice and competition into the public education system, which, it is thought, will overcome the disadvantages of the present near-monopoly situation. The funds for these vouchers would be provided by taxation, just as the public school system is presently funded by taxation, except that parents would have some power to decide where the tax proceeds flow. While the use of vouchers would trigger markets, and would cause the price of public education to decrease while improving quality of service, vouchers are only a half-way measure because they ignore some fundamental issues, such as whether government should be in the business of providing education in the first place. This paper explores the possibility of privatizing education and attempts to answer questions such as: Is providing for public education a legitimate function of government? How would education be funded if government didn't do it? How would a privately funded education system provide for those who couldn't pay?

If Dwarf Tossing is Outlawed, Only Outlaws Will Toss Dwarfs: Is Dwarf Tossing a Victimless Crime?

Abstract: This paper explores some legal and philosophical issues surrounding the practice of dwarf tossing, the sport by which dwarfs are thrown for fun and profit. Part I provides an overview. Part II provides some background information regarding the sport. Part III analyzes the body as property argument and tentatively concludes that individuals have an absolute right to do with their bodies as they see fit. Part IV discusses whether the balancing of interests argument is a valid limitation on the body as property argument and concludes that it is not. Part V looks at the argument that dwarf tossing should be banned or restricted on public policy grounds. Part VI asks whether dwarf tossing should be outlawed and concludes that there are no valid arguments to justify outlawing or restricting the practice.