Arguments for Free Trade

[Jacobtm]

Are NAFTA/CAFTA ideal examples of free trade?  Is the ideal free trade just having no laws on the books regarding foreign goods?

Not ideal examples, they allow all sorts of exceptions and as we saw earlier this year, the imposition of nonsense tarrifs for political reasons.

The ideal of free trade, to me, is having no restrictions on foreign trade nor giving special deals to domestic producers.

In the past 20 years, prior to this recession, we've seen unprecedented liberalization of trade, coupled with unprecedented reduction in global poverty as companies expand operations all over the world. Poor countries have reduced restrictions on foreign investment, and rich countries have cut tariffs, meaning rich conutries get cheap goods (which has helped keep inflation down) and poor countries get jobs.

Subsidizing things, whether it's farmers or auto-makers, makes it harder for producers to compete only on the money they make from selling their products. Our farm subsidies keep giant agriculture conglomerates wealthy and in control of the market, while preventing farmers in poor countries from being able to compete at all.

Our auto-bailouts temporarily saved some jobs in the USA (though lets not forget how many people got laid off anyway), but keeping inefficient producers alive here delays the spread of auto-manufacturing around the world, to places where wages are low enough to mean jobs can actually last.


The biggest argument against free trade is that it exports American jobs overseas. This is largely true, especially of things like manufacturing, where all a worker needs is basic hand-eye coordination and the ability to learn physical motions. Any human being in the world can do these kinds of jobs with some training, so why would companies want to pay high prices for such labor when they could pay low prices?

The problem is that our government has been terrible at pursuing educational policies that prepare people for jobs actually befitting the richest country on earth. Ideally the poor would be doing our manufacturing and we'd be moving on to more specialized labor that takes more than physical abilities. Without adequately educated society though, free trade leaves alot of people behind.

This doesn't mean we should stop free trade, but that we should pick up the slack and change our education system so that people can actually learn skills that are WORTH paying them high salaries for, rather than fighting the tide to keep high salaries for jobs that anyone at all could do.

[Jacobtm]

I can't believe some of you are defending the greedy bastards.

There's not another answer for it then GREED plain and simple.  Of course I can pay the Chinese less to make garden hose and that means more money for me.  If I had to pay the American worker I would make less.   

As for "everybody should forget about these jobs and just get educated" well that's not going to work in a country this large.  We will not survive as a service nation, and that's almost like saying everybody can become rich.   The avg salaries is somewhere's in the range of 40k-70k and it really all averages out depending on what part of the country you live.  Its false to assume you get a degree and will make over 100k a year.  Yes, there's jobs that pay that much, but its very very few of them.

I know forum members don't like to be called elitist, but this kind of talk very clearly shows it.

It has little to do with "the greedy bastards", and alot to do with the price of goods. Let's talk about that garden hose. If a chinese garden hose costs less than an American one, which one do you think will sell better? I'm sure some people would be willing to spend more for the sake of buying American, but the vast majority will buy the cheaper hose.

The people at the top of companies who're setting up factories in China, and therefore selling cheaper goods in the US, are certainly getting rich, but they're getting rich because people are buying their products, they're producing what people want at a lower cost, and reaping the benefits.

The fact is this force isn't something that can be stopped without huge consequences. You could put huge tarriffs on foreign imports, but that just equates to a tax on all consumer goods, which hurts thte poor the most.

Whether our government steps up to the plate with educational policy or not, workers demanding 50 cents an hour will continue to get jobs over workers demanding $20 an hour, and cheap goods will continue to sell better than expensive goods that aren't any better quality. We can either try to fight a losing battle, or recognize that wage competition in manufacturing is too strong a force to combat, and try our best to educate our population so they can do work that's actually valuable.