As the White House aims to bring more manufacturing to the United States with its disastrous tariff policy bludge, most economists focus on short-term hits to the profitability of American companies.
It’s difficult to imagine. For protectionists to make such corrosive damage policy to long-term Cels, that we may never observe what happened.
Beyond that history, the US was where Peple took risks by trying new ideas. It’s a better place to fail and try again than any other country in the world. In recent years, we have excellent retail and distribution, and in many cases we have handed out other countries the production of Uonus. But the advantage of our central comparisons has always been that we have nurtured fresh new ideas that are unlike anything else in the world.
In 1998, former Federal Leaaaaan Greenspan, who spoke to the University of California faculty, “Is there a new economy?” His fascinating observation was that creative destruction led to a smaller weight in the US GDP over time. The fiber optic cable replaces one ton of copper wire. Lightweight building materials have replaced heavy concrete blocks. These days, instead of going to a clinic using a car or gasoline, you have to rely on doctors online. We do less, but without the free market, which is always the next entrepreneur, we cannot make the lives of new customers easier or make them a better free market. This is part of the reason we evolved towards service and away from manufacturing.
The White House customs policy is intended to act like a time machine, and ostensibly regain high-paying and heavy manufacturing jobs as in the 1950s. But it is a time machine that is maintained in a society frozen in amber, frozen by manufacturers, without evolving that there is far less competition facing far less competition, and does not do their best. For a summer like me, a trip to Cuba gives a window into what life looks like if the car never evolved.
But India offers even better comparisons. Because Cuba has never built a car. Built in India between 1957 and 2014, the Hindustan Ambassador has argued for the worst car ever built in terms of the desires and needs of service consumers.
The idea for India was to build cars in India, like President Trump today, to create jobs for domestic manufacturing. However, the government decide which industries to protect and provide (see if Apple is getting a reprieve on IPHONE on iPhone from tariffs), which is the slippery shore for the government in industrial production.
The Indian government has decided that it is not a free market, but that it is best to choose which aspects of the economy need to protect against foreign competition. Apart from trade protection, the industrial licensing system had to curb private companies, and all private companies beyond a certain small size had to obtain licenses to do things like expanding plants, tranasity, or transferring to production of new products. The system therefore placed private sector activities under the substantial government control.
Even if other car companies had advanced new features such as cruise control, air conditioning and disc brakes by the early 1960s, this protective “infigen industry” debate allowed Hindustan companies to move forward with slower changes.
By 1990, the ambassador was very late behind the counterparts built in the foreign country. Thirty-three years after India’s repressive regulations and trade protection, power steering, brakes, and automatic transmissions were missing. One BBC reporter said:
It required an incredibly heavy steering, a very strong triceps to work with the surgeon’s skill. I had to almost stand on the brakes – the huge strength to hold the car – the brakes – with the spindly column shifter on each gear (shifting from the second to third gear was in art form).
The cars were constantly broken and India banned foreign parts, so instead they had to build poor quality improvisations. In the summer, the heat closed the car and the seafarers had to pour wet rags on the fuel pump before they could cool it down.
The car was very slow so people could probably overtake it at the speed of time. A smoky diesel engine spews harmful smoke from the tailpipe, at 65 mph. And the leaf springs offer a harsh ride, unlike horse carts from the 1800s.
In a country of about 1 billion people, Absador sells around 24,000 vehicles per year at that height, and this terrible car is only available to people with Whel connected. For relatively wealthy people, the waiting times for new ambassadors were at their peak at over eight years. However, the prime minister, bureaucrats and lawmakers reached the head of the line with grandly equipped vehicles. The taxi driver was next on the list.
It wasn’t all the car companies’ negligence. Under a repressive regime that regulates many aspects of the free market, automakers will not raise prices or make more cars without getting sign-offs from government officials. They also were unable to import technology from other countries.
By 2014, India had brought foreign car companies to the market, with only 2,214 unboines being sold. Bybe, factory productivity was declining and the company was suffering from debt. Fifty-six years later, the car, which was by no means modern, stopped production.
Ambassadors act as reminders of the dangers of tariff policy. It sets the country on a different truck where governments, rather than a free market, decide what people need and want, and determines the time frame that leaves the goods behind. Without the threat of losing customers, auto companies with tariff protection tend to act like the automotive sector. It’s a loss not only for the short term, but for the generation of future entrepreneurs and clients.
1996 Hindustan Ambassador N574PVL Old Warden [Rob Hodgkins, CC BY-SA 2.0, via Wikimedia Commons]
Created by Giovanni Polo, known as the “sculptor,” Peugeot 206’s popular commercial television, intentionally damaging the Hindustan ambassador (including the elephant sitting) and involved a young Indian man who spends his night welding. The next day, the car deleted many of his friend’s vy hope as a painted replica of the 206 exterior shape.
