Posted on 01/31/2004 2:47:00 PM PST by madeinchina
In his State of the Union message, President George W. Bush devoted only a single sentence to international trade: “My administration is promoting free and fair trade to open up new markets for America's entrepreneurs and manufacturers and farmers -- to create jobs for American workers.” With the country facing another record trade deficit around $500 billion, the dollar losing between 20 percent and 40 percent of its value against other major currencies in the past two years, and some 3 million jobs being lost in the manufacturing sector since 1997, the trade issue deserved much greater attention. Indeed, the Bush Administration had unveiled a new Manufacturing Strategy only days earlier. But failure to call for Congressional action to implement the new strategy enhanced perceptions that the White House was not really taking the issue seriously. Consider the use of the empty phrase “free and fair trade.” Not since the Portuguese inaugurated the modern global economy by shooting their way into the Indian Ocean to grab control of the Asian spice trade five centuries ago, has anyone been successful by an adherence to “free and fair trade.” Instead, they have played to win by using every advantage they could find or create. No one wants a “level playing field” if they can gain a “home field advantage” tilted in their favor. Indiana University professor William R. Thompson has spent his career analyzing international competition in all its forms. He has found that “waves of political leadership, order and large-sale violence [are] closely linked to processes of long-term economic growth.” Yet, he has observed that among too many analysts and policymakers “this set of activities remains underappreciated despite its close links to some of the most vicious wars of the past half-millennium and the political-economic restructuring that occurred in the midst and the aftermath of these contests.” This lack of interest is certainly evident among top U.S. decision makers. The idea that trade should be “free” of government involvement or simply made “fair” without concern for the outcome, implies that either trade is of too little consequence to require state supervision – a clearly disingenuous and thus untenable position, or that private “market” results will automatically provide the best outcome for society. It is this last notion about a benevolent “invisible hand” that has paralyzed U.S. policy. It is the wishful thinking of liberalism masquerading as theology. It has two basic tenets. First, the world is basically a harmonious place where conflict can be avoided by a mutually beneficial division of labor that integrates the world. Second, the division of labor can best be managed by private enterprise pursuing its own ends without being held accountable for any larger consequences. The noted realist thinker E. H. Carr demolished the harmony thesis by observing that the division of labor seldom creates a world of equals. Instead, there are “haves” and “have nots” or as foreign policy experts denote them, “satisfied” and “unsatisfied” powers, with the latter group bent on overturning the status quo in order to improve their place in the world. This unequal division is revealed in the classic example used by David Ricardo to teach the principle of comparative advantage: the cloth-wine trade between England and Portugal. In this example, the Portuguese should accept England’s lead in the industrial revolution, which in Ricardo’s day was best represented by the mass production of textile goods, and be content to export wine to pay for imported manufactured items. Portugal should not seek to industrialize itself to compete with England. This lesson quickly earned the title “free trade imperialism” as it would condemn Portugal, or any non-industrial society, to subservience. It should be recalled that one reason the American colonies revolted against England was that they did not like their assigned place in the imperial division of labor. The independent United States became an industrial competitor of the British Empire and eventually surpassed it. Reports from the recent World Economic Forum held in Davos, Switzerland indicate that a host of powers are working in the same way to undermine America’s economic leadership and overthrow its status as the only global superpower. Zhu Min, general manager and economic adviser at the Bank of China, predicted his country will become the main challenger to U.S. economic power, surpassing Japan to become the world’s second largest economy by 2020. Russian Finance Minister Alexei Kudrin said his country “has economic potential comparable with the United States.” Brazil is also making a bid. It led the block of developing nations in opposition to the U.S. agenda, bringing to an impasse the Doha Round World Trade Organization talks. Under left-wing president Luiz Inacio Lula da Silva, Brazil is forging closer ties with China. And India’s leaders are very sensitive to any implication that they are not keeping up with the ambitions of the other rising nation-states. Thompson’s research shows that “commercial challenges are aimed immediately at the leading commercial power.” In today’s case, that means the rich American market is the target, and domestic American firms are to be swept away in the struggle for economic dominance. Private firms are unable to meet this challenge on their own. Domestic American firms cannot stand against overseas rivals backed by their governments, who use all the tools and tactics learned from centuries of trade warfare. Many of the largest “American” firms in leading industries now see themselves as being “transnational” and owing no allegiance to the United States. This means they have been easy converts to the mercantile strategies of the rising states. Washington needs to take action to rein in these global mercenaries and channel their energies back to the advancement of American economic preeminence. In his study The Emergence of the Global Political Economy, Thompson warns of the cost of inaction: “If the declining leader’s deteriorating position accelerates due to its own choices, perceived vulnerability will increase and so, too, will the scope of the challenger’s attack.”
As an aside, I think that's just completely wrong; witness China's entrance into the WTO. Do understand what sort of hoops that China had to jump through to do that? What sort of rules to which it submits itself? It is bound by every other WTO country in the world--all 160 of them, or whatever the number is now.
They certainly prevaricate.
By the way, you haven't answered my question to cite anywhere that there is free trade. And since we both know that place doesn't exist, how can the global economy work? I know you think you came up with a pithy reply to answer that but, if trade restrictions that exist today are so bad, then, how is it that we have a working global economy?
Let me make this easy. The goal should be trade with no impediments. We have a degree of that in this country. We should have it to a greater degree. Some, like you I suspect, want more impediments. People with that agenda have no place in a capitalistic society.
Sure hope that turns out to be the case. I know in some of the southern states free trade is now being used as a litmus test for determining what candidates to support. That's a good sign not everyone is going to go along to get along.
Word.
I have never said that.
My point is that free traders generally want the rules turned to be advantageous to their point of view or rather, to their business.
I hardly think that "no barriers or rules" for trade would fly in this economy. Corporations would become voracious in their zeal to destroy one another to become the "top dog". And, the result would be anarchy regarding business in the world.
Super-capitalism and socialism both have one flaw: They do not take into account human nature. Whereas leaders in the socialist society become greedy, by human nature, and seek the suppression of the people they claim to serve. Super-capitalism has the same ends: The nature of the human is to conquer, mostly by oppresion. The super-capitalists can only get to be number one by destroying/absorbing/taking-over its competitors. Were there a true super-capitalist economy we could count on the return of the destructive nature of coporations using people as fodder. We need something in between that provides checks and balances to both ends. Free traders alway argue that we need the world economy to be strong so that all benefit. How is that accomplished without the eventual growth of coporations into world powers who take and take and don't care what they leave in their wake?
Only by the economic luddites. You see how well Pat Buchanan did in his efforts. Its just noise from a bunch of union thugs unhappy that they have to put in an honest day's work for a day's pay.
Super-capitalism and socialism both have one flaw: They do not take into account human nature.
LOL you think corporations don't do that already? Who do you think they're competing against?
Regarding capitalism, its the ultimate in understanding of human nature. It understands that people are motivated by financial reward. People always act in what they perceive as their best interest. That's why capitalism works. If you don't appreciate that fact then we're much farther apart in this discussion than I first imagined.
It's certainly not going down.
Have you seen the latest polls in South Carolina? Kerry is practically tied with Bush should he be the nominee. That's hardly a few economic luddites.
Maybe free trade wasn't the biggest of issues when Buchanan ran in the early and mid-nineties but it's picking up now. And you're forgetting Perot in 1992 won 19% of the vote on his anti-NAFTA plank.
Those who who wish to deny the real concerns people are having over job losses are in for a rude awakening.
Ronald Reagan saved Harley-Davidson with a Protective Tariff.
Ronald Reagan and the Republican Party of Ronald Reagan had a very different definition of free trade from this administration.
Here is a direct quote Ronald Reagan's 1984 Republican Party Platform:
"But free trade MUST BE FAIR trade. It works only when all trading partners accept open markets for goods, services, and investments. We will review existing trade agreements and vigorously enforce trade laws including assurance of access to all markets for our service industries. We will pursue domestic and international policies that will allow our American manufacturing and agricultural industries to compete in international markets. WE WILL NOT TOLERATE THE LOSS OF AMERICAN JOBS TO nationalized, subsidized, protected foreign industries, particularly in STEEL, automobiles, mining, footwear, textiles, and OTHER BASIC INDUSTRIES. This production is sometimes financed with our own tax dollars through international institutions. We will work to stop funding of such projects that are detrimental to our own economy."
http://www.presidency.ucsb.edu/site/docs/doc_platforms.php?platindex=R1984
Previous Republican Party Platforms were vigorously in favor of protecting American employees.
We continue to drift away from our Constitutional duty to 'regulate Commerce' in a way that will "insure domestic tranquility, provide for the common defense, promote the general welfare, and secure the blessings of liberty to ourselves and our posterity"
And we now have a gigantic trade deficit with the largest Communist nation in the world. A nation that imprisons Christians and uses forced prison labor. A nation that owns half of every business within its borders.
"We the people of the United States, in order to form a more perfect union, establish justice, insure domestic tranquility, provide for the common defense, promote the general welfare, and secure the blessings of liberty to ourselves and our posterity, do ordain and establish this Constitution for the United States of America. "
I was talking about NAM statistics, not product labeling.
Futhermore, the FTC decided not to govern how little domestic content a vehicle must have to be 'Made in USA". Just that domestic content is reported.
Read for yourself FTC.
Whether a vehicle is "Made in the USA" is up to the buyer.
Then they came, they opened a store and sold tables and chairs for less then the master paid for the unfinished wood needed to build his table and chairs. Everyone was very happy to get the tables and chairs at a fraction of the cost of the mastered tables and chairs. Everyone except the master and the factory workers. We all bought them and filled our homes with new furniture. Life was good and getting better.
For a while the master continued to run his factory, but soon the warehouses were full of tables and chairs only a few buy. The master closed the factory and with great regret told his workers that there were no more jobs for them. The workers had no more money and stopped buying houses and stopped buying cars and stopped paying to have their lawns mowed and homes cleaned. They stopped eating out and stopped going out.
The little stores that service the workers tried to stay in business, but without the workers spending their money most of the stores had to close too. Only the food store and the drug store managed to stay open.
Now life is not so good, only a lucky few have jobs and they have to pay most of their money in taxes so that all the unemployed can get food stamps to eat with. The children have no hope of making a better life here, the workers have no hope of ever finding a job here, and the master stays just stays in his estate, heart broken by what ‘they” did to his people and his village.
This is what free trade does when first world labor is put into completion with third world labor. Cheap goods = cheap labor = subsistence level living.
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