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Notes -
The arguments in favour of free trade are convincing, but I've always wondered why we don't see unilateral free trade. After all, if you take at face value the arguments that tariffs on foreign imports hurt domestic consumers more than they benefit domestic producers, it would make sense to completely remove foreign tariffs without waiting for trading partners to do the same.
There are two explanations I can think of:
Unilateral free trade is good, but multilateral free trade is better. Having tariffs gives governments the option of removing them in exchange for foreign countries doing the same. Without tariffs, governments have no leverage.
Politics. Domestic consumers are better at lobbying governments than consumers, since the benefits of lower tariffs are diffuse, whereas the cost of removing them are concentrated on a small number of producers.
Am I missing anything?
Comparative advantage locks you in place at the technology level you're on. In 1955 South Korea might've gone 'oh we should only export rice since the US does all industrial things way better than us'. Indeed, in 1955 that was the case. But they used protectionism to develop their industries so they could eventually compete on world markets in cars, televisions and microchips. There are ways to protect markets without making them lazy, by requiring a quota of vehicles to be exported for example. If someone in a free market wants to buy your cars than they're not totally horrendous.
Furthermore, countries need food security, energy security, domestic weapons production. Better economic efficiency than getting starved or annexed.
Then there's anti-dumping stuff. For instance Saudi Arabia can open up the taps and flood the world with oil to suppress competition. China can do the same with steel.
The problem is that what worked in South Korea doesn't work anywhere else. See Brazil's extreme import restrictions / protectionism which, with the sole exception of Embraer, hasn't created any South Korea level champions despite a 200m+ population. It's entirely possible that with a homogenous, hardworking IQ 105 population situated right between two huge markets in Japan and China, South Korea could have reached first-world status even without protectionism.
True. If there's a group project, no matter how they're organized the smart kids are going to beat the stupid kids.
But government support can help. I'd argue that a high-IQ, hardworking, sophisticated country can do government support better than a stupider and corrupt country, just as they do other administrative/economic tasks better.
If communism can put a country behind, logically good governance should put it ahead. Fostering R&D spending for strategic industries would certainly be helpful. Guaranteeing their domestic markets temporarily in exchange for requiring them to export competitively. I read snippets of Lee Quan Yew's biography where he basically acts like a salesman, going around asking for investment from British and American companies, showing up to conventions... he was really actively supportive of industry in a way few govts are. In the case of China, they have institutionalized IP theft using state cyberespionage, that puts them ahead.
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