Other than the aforementioned arguments aimed at protection of the interest of the nation, these tariffs are perceived as incentives for discrimination and injustices on political grounds as others believe that different nations basing on their European ties and geographical locations are subjected to different tariff rates. It is strongly believed that these so called tariffs and other related policies are used more often than not in income redistribution more especially in cases where the government is not willing to reveal the rates at which the incomes are being transferred (George, 2006).
The idea of protection is perceived as dissatisfaction to the consumers so that the incompetent producer gets the opportunity to benefit from that. This is because reduced competition among producers leads to scarcity of particular items in the market that even provokes incompetent players to venture into the business. It paralyses trade under the pretext of being patriotic (George, 2006). It is these injustices with protective tariffs that enabled George to question such policies and suggested the adoption of subsidies instead to the domestic fraternity as away of motivating the entire production sector as opposed to tariffs which only allow selected “fortunate” industries in the booming business (George, 2006).
George gives his full support of the bounties by saying that they enable the entire population visualize by themselves the nature and the quality of products produced by a given industry and views the policies of protective tariffs as keeping the individuals away from light. In his conclusive statement on the protective policies, George argues that it proved inefficient in generating wages and thereby never key in poverty eradication.
In my theoretical understanding of the whole concept, I tend to disagree with George on this matter simply because through the creation of employment opportunities which was only possible through the establishment and sustenance of the local industries, more job opportunities are created (George, 2006). It is therefore my strong belief that fee trade would even encourage higher unemployment rates compared to that of protected trade. It is through my own understanding of the major factors contributing to poverty and one of the major factors is unemployment. In summary, tackling unemployment is tackling poverty given a situation where other factors are held constant (George, 2006)
My view is that instead of imposing heavy taxation on imports, the nations would rather partner through business franchise so that similar products are produced in both countries with the incense from the major exporter. This kind of partnership will encourage more investors to invest within the nation so much so that other than providing employment to the citizens of that nation, they are taxed at lower rate and because of their large numbers, the little taxes eventually contributes significantly to the country’s revenues.
It is evident from George that other than advocating for free trade, his focus was on creation of a society that was free obstacles in everyday life. His interest was a society whereby an individual is free to do all that pleases him or her as long as his or her own activities do not cause any kind of discomfort to his immediate neighbors. This in my understanding of the current society. It implies no leaders, no law courts, no policemen as well as soldiers (George, 2006).
You can imagine having such a society? This would immediately translate to high crime rate as individuals as crime committers would not be held responsible for their ill deeds. It was noted in the year 1999 that the conditions of most industrial employees in America had shown significant improvement when protection or tariffs was done away with.
The controversy lies in the fact whether the workers who are paid low wages will eventually produce goods and other commodities which are as cheap as they are. A very good and most practical illustration is that case in the United States compared to that in Japan or Indonesia where it is known that the US produces more that four times what is produced in Japan. This in comparison does not translate to 400% returns higher so the theory is faulted in practice (George, 2006).
Going further to fault and disagree with the theory of protection that postulates that nations should not import those goods which are produced domestically, then what stops an individual families from producing all the crops they need? Why would an individual marry from a neighborhood or something? Just as the old saying goes that no person is an island, such protection tariffs should either be lifted or adjusted to a much pocket friendlier rate. If people were to produce their own at domestic level then why trade or what could be the essence of trade?
My take on trade is that through trading, the concerned parties would be able to access and acquire all the commodities that they might be in need of “all under one roof” than to try to produce them on your own which I perceive as rather expensive, time consuming and labor intensive exercise. In my own reasoning I would say that it is the existence of the great diversity that makes people trade among themselves that is to say resource distribution in the word is non-uniform.
Assessing at the population advantage in relation to production, it is argued that particular commodities are produced with efficiencies and effectiveness in those areas where the human settlement patterns are sparse compared to those regions where the settlement patterns are met with a relatively higher density. In my own understanding, trade gives enough room for specialization. It is through trade that the nations produce what they are capable of producing best and are identified with (George, 2006).
The limitation of this kind of specialization through trade is that it creates a bias in the market when a new product is brought in the market for the first time which even makes it worse in a case where the new product is originating from that country which is not known for producing such products. This gives its marketers reasonably hard time as a lot of demonstrations and marketing strategies have to be put in place. Another school of thought is whether protection or imposition of tariffs negatively impacts labor and the notion that free trade on the other hand promotes worker’s wages. The question is whether the advocators of free trade clearly explain how free trade significantly generates wages or if there is any way in which it increases the level of production of a given nation.
This again raises yet another question on the entry point when it comes to raising the general wages by looking at the major determinants of wages? Is it the rate of their productivity, the number of hours worked or how best the worker bargains with the employer? In my understanding of wages, I strongly believe that the level of freedom that is allowed when a trading activity is being carried out between individuals from different nations has nothing to do with the availability of jobs neither does it determine the waging scale of both nations involved. I believe that the number of jobs is solely dependent on the availability of land (other factors like political instability among others held constant) within that particular nation and how effectively or efficiently it is used and managed (George, 2006).
This eventually enables us to come up with the overall and general conclusion that both free trade and protection are not the key players as far as raising wages is concerned. So our next question is who are the key beneficiaries in protection? The key point here is that if a country does not export much, the same applies to its import rate due to the principle that resources which are considered natural and are economically protected eventually translates to profit increment in their proprietors. Cutting down on the exportation rates by nations also implies a reduction in the resources considered natural hence leading to a reduction in such exports. In my conclusion, I say that imposing barriers on trade leads to loss of the nation’s diversities which could either be natural or scientific hence a reduction in the production standards of both nations (George, 2006).
If assessed in the long run, free trade increases the rate of production with the key beneficiaries being the owners of land but not single individuals as most people would think. The point here is that nations still benefit from free trade even if they have not adopted similar policies in place. This is made possible through increment in production rates that brings in a variety of commodities to choose from. It is imperative to note that as much as the regulations on tariffs decreases the rate of production by not leaving any benefits to the workers free trade as a principle still encourage the influx of products from other countries that can be of harm to both the environment as well as the end consumers of such products.
This raises yet another question of the equilibrium balance between job creation and wage increment for every worker. In my own view of critical thinking, I see a great possibility of eliminating those individuals who have held their land idle by imposing a huge tax on idle lands so that they are all put into use for the benefit of everyone as clearly stated by Henry George where he advocates for a society where every individual would use lands fairly without any restriction only if such land tracks of land are leased out to communities to engage them in productive activities.