Posted on 10/25/2006 5:56:53 AM PDT by from occupied ga
There are only a handful of products that Americans import that cannot be produced at home and therefore create jobs for Americans. Let's look at a few of them.
We import cocoa from Ghana and coffee from African and Latin American countries. We import saffron from Spain and India and cinnamon from Sri Lanka. In fact, India produces 86 percent of the world tonnage of spices. There's absolutely no reason these products cannot be produced by Americans, and we could be cocoa, coffee and spices independent.
You say, "Williams, that's crazy! We don't have the climate and soil conditions to produce those products. Many spices, for example, require a moist tropical environment." No problem. We have the technology whereby we can simulate both the soil and weather conditions. We could build greenhouses in which to grow cinnamon trees and get our scientists to create the same soil conditions that exist in Sri Lanka. Greenhouses could also be built to simulate the climate conditions in Africa and Latin America to grow cocoa and coffee. In the case of cocoa, the greenhouses would have to be Superdome size to accommodate trees as high as 50 feet.
You say, "Williams, that's still crazy! Imagine the high costs and the higher product prices of your crazy scheme." I say, "Aha, you're getting the picture."
There are several nearly self-evident factors about our being cocoa, coffee and spices independent. Without a doubt, there would be job creation in our cocoa, coffee and spices industries, but consumers would pay a much higher price than they currently do. Therefore, nearly 300 million American consumers would be worse off, having to pay those higher prices or doing without, but those with the new jobs would be better off.
So let's be honest with ourselves. Why do we choose to import cocoa, coffee and spices rather than produce them ourselves? The answer is that it is cheaper to do so. That means we enjoy a higher standard of living than if we tried to produce them ourselves. If we can enjoy, say, coffee, at a cheaper price than producing it ourselves, we have more money left over to buy other goods. That principle not only applies to cocoa, coffee and spices. It's a general principle: If a good can be purchased more cheaply abroad, we enjoy a higher standard of living by trading than we would by producing it ourselves.
No one denies that international trade has unpleasant consequences for some workers. They have to find other jobs that might not pay as much, but should we protect those jobs through trade restrictions? The Washington-based Institute for International Economics has assembled data that might help with the answer. Tariffs and quotas on imported sugar saved 2,261 jobs during the 1990s. As a result of those restrictions, the average household pays $21 more per year for sugar. The total cost, nationally, sums to $826,000 for each job saved. Trade restrictions on luggage saved 226 jobs and cost consumers $1.2 million in higher prices for each job saved. Restrictions on apparel and textiles saved 168,786 jobs at a cost of nearly $200,000 for each job saved.
You might wonder how it is possible for, say, the sugar industry to rip off consumers. After all, consumers are far more numerous than sugar workers and sugar bosses. It's easy. A lot is at stake for those in the sugar industry, workers and bosses. They dedicate huge resources to pressure Congress into enacting trade restrictions. But how many of us consumers will devote the same resources to unseat a congressman who voted for sugar restrictions that forced us to pay $21 more for the sugar our family uses? It's the problem of visible beneficiaries of trade restrictions, sugar workers and bosses, gaining at the expense of invisible victims -- sugar consumers. We might think of it as congressional price-gouging.
Dr. Williams serves on the faculty of George Mason University as John M. Olin Distinguished Professor of Economics and is the author of More Liberty Means Less Government: Our Founders Knew This Well.
When I saw this was by WW, I knew it would be a valuable economics lesson. He's the best.
Walter Williams BUMP!
--Walter Williams, Thomas Sowell, Bill Cosby--need one say more?
What kind of a moron uses coffee and cocoa as an example of why we shouldn't be more self reliant?
I wish economics 101 was a requirement for everyone. I am amazed at how little most really know. Even the little things like supply and demand curves can be such a mystery. I would, however, venture to say that the economics acumen here on FR exceeds that on DU.
AND they have universal health care!
Williams is, of course, correct. Except for one, salient point:
How free is "free trade" when one side of the equation does it's level best to block it's partner's goods, infringe upon it's copyrights and patents and then builds up a huge, cash surplus, which it then uses to threaten the other side (vis-a-vis China and Venezuela)?
How free is "free trade" when in order to get those lower prices, which are such a boon to the American consumer, the government works hand-in-hand with big business in order to avoid paying AMERICANS to produce them (vis-a-vis NAFTA, CAFTA and a host of smaller agreements)?
How free is "free trade" when your national trade policies are dictated to a large extent by multi-national bodies (WTO, G-8, etc) which exist solely to protect narrow national interests, and not the actual concept of free trade? How free is "free trade" when the very multi-national bodies that regulate it are unelected and cannot be held accountable for their actions? (See also EU).
How eveident are the benefits of "free trade" to the American economy (in the long term) when a walk through Wal-Mart shows that the only products stamped "Made in America" are Pepsi, Doritos, Cigarettes and a wide range of laxatives, and all the furniture, electronics, shoes and clothing, plastics and a host of other products all say "Made in China"?
Free trade is a wonderful thing, provided, of course, that we're playing in a level field. We aren't, and this is due, in part, to open collaboration of the United States government, business interests in this country, and outright skulduggery by foreign powers and interests to systematically steal American wealth for personal profit at the highest levels.
What passes for "free trade" these days is most certainly not.
Because the mechanisms/complications of production can be understood by even the not so bright?
the only isolationist moron i have read is Pat Buchanan....
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I agree with you; he's the best.
Congressman Billybob
Latest article: "Recess at Salisbury State"
Please see my most recent statement on running for Congress, here.
I haven't had "economics 101" but I do have a tad of common sense, a virtue that's sadly lacking among liberals.
The economic acumen of dog squeeze exceeds that on DU.
I am teaching Economics to a class of 18 homeschoolers. I am using Sowell's book. I have parents sitting in on the class, they like it so much!
one who obviously should have used a simpler example for you.
I think Dr. Williams has been reading my posts here on FreeRepublic! LOL.
Of course, his general underlying point is original . . .but I used a nearly identical "synthetic agriculture" example on a trade/outsourcing thread a few months ago.
That other job thing is crap too. You go from making something to being a checker at Wal-Mart is not the same. You have pride, you are creating something for your neighbors, your family to use. Paper or plastic doesn't give you the same feeling of accomplishment.
Guess I don't have to ask what kind of moron would buy that strawman argument.
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