I am fully aware of the libertarian argument for free trade yet my experience of living in Germany presents different evidence to my own eyes. The Germans are outwardly free traders but they remain stubbornly protective of their economy and their industries. They even drove Walmart out of Bavaria!
I quite agree with the authors' prescriptions of cutting taxes and cutting regulation as the important steps in making America competitive but I have to concede that Europe, Germany not excluded, is top-heavy with regulations yet Germany remains one of the strongest exporters in the world.
Germany has a different training system the United States which features heavy emphasis on apprenticeship and the training is thorough and required for even the most pedestrian of occupations. It seems that the emphasis is not on creating competition but in setting up a system in which existing businesses thrive. That means that startup competitors face barriers and young people are channeled through apprenticeship into industries but in the course of their training they acquire knowledge and experience of real value. On the university level, its technical and scientific achievements rank among the highest in the world.
In their exports it does not appear that the Germans compete on price but on quality. As to imports, they are not indiscriminate buyers on the basis of price alone. They will pay a little more for German product. Walmart was simply unwilling to cope with the employment regulations and with the culture and so left.
My point? If we buy the ideological argument that free trade is indispensable we must ask, to whom? Clearly, we have hollowed out our manufacturing base and with it the blue collar jobs. There comes a point when mercantilist arguments have to have their effect. We are conceivably approaching the time when we will not be able to compete with the Chinese Navy because they will be able to manufacture ships at a rate which we cannot match. Free trade does not work if job loss in basic manufacturing industries cannot be compensated for by job gain in higher technological industries but that that is largely determined by our educational system which sucks. Indeed, there is mounting evidence that the Chinese are becoming very proficient in high-technology. Even with the best educational system turning out the best technicians, a lag time will always create employment dislocations and political problems. The Germans seem to slow the process down until their technicians are up to the task and can compete.
Perhaps it stems from the fact that Germany is a homogeneous society (and will remain so for a little while until the flood of immigrants utterly changes the culture) and therefore capable of a consensus but the diversity of the United States is proving not our strength but our Achilles' heel and has created an every-man-for-himself culture in a universe where the government is clearly for sale.
If The Donald is actually elected, will he be selective in his trade policy or will he instead ignite a trade war?
