FREE TRADE IS A BAD IDEA

Bob Lonsberry ^ | 11/25/2002 | Bob Lonsberry

[SAMWolf]

I hope they don't kick me out of the Republican Party for this.

But free trade is a bad idea.

For years it hasn't set right with me, and I've tried to figure out why. And now I know. It's because it violates a simple principle of life.

And that is self-reliance.

International free trade, while certainly necessary and useful to an extent, can easily be overemphasized to such a degree that it jeopardizes a country's economic self-interest and national security.

The United States is a good example.

But first, let's look at Mexico.

Under the North American Free Trade Agreement, all Mexican protections against American or Canadian agricultural imports are about to disappear. That means cheaper Canadian and American farm products are going to flood Mexico.

And Mexican farms are going to close down. The impact on Mexican agriculture is going to be immense.

Which means Mexico is going to be less capable of supplying its own needs. And it means a ton of farm workers are going to be out of work and headed north. And that's not good for anybody.

Just like it's no good that the United States has a dramatic trade deficit, that it buys far more from overseas than it sells. And that there are entire sections of the American economy which are dependent on foreign goods. For whole product lines, there simply are no American manufacturers anymore. From electronic goods to clothing to steel, we don't make things anymore.

And American corporations are closing domestic factories to shift manufacturing overseas.

All of which fits perfectly into the world of free trade.

And all of which screws us royally.

Because independence is good and interdependence is bad. Because interdependence is the same as reliance and that is the opposite of self-reliance.

And history teaches that -- without exception -- prosperity and security require national self-reliance. Americans should eat American agricultural products and use American manufactured products and channel their income back into the economy that produced it -- the American economy. When a nation becomes reliant on foreign products -- as the United States clearly is -- its comfort and peace are held hostage by the producers of those foreign products.

If a nation cannot produce what it needs -- as the United States now cannot -- it is in a precarious position that weakens and enslaves it.

We will be weakened as we exchange our prosperity -- hard currency -- for foreign products, and we will be enslaved as our national policy inevitably must be tailored to preserve our access to foreign goods. These are truths which have been understood and implemented around the world for centuries. To abandon them now is to abandon national self-interest and to doom the United States to premature but certain decline.

And it is to bring the same fate to many nations of the world.

In developing countries, lingering poverty and delayed development are tied directly to a failure to be nationally self-reliant. When nations feed themselves, they do not starve. When they manufacture their own goods, they don't go without.

When they understand that their consumer dollars must be recycled into their own economies, they do not long linger in recession or unemployment.

Free trade serves a very few at the top of international corporations, but it does not serve the average American. Rather, it takes away his job and his nation's strength.

Certainly, the flow of goods and produce around the globe is needful and beneficial, but so is protection, and buttering your own bread first. The sense of national economic identity must not be lost, and neither should the commitment to protecting American prosperity -- even at the cost of limiting free trade.

Our first obligation is to feed, house, clothe and prosper American families. Every thing else comes second. That must be our attitude. Just as Mexico and every other nation must have the same attitude about its people and its economy.

Independence is good, interdependence is bad.

Self-reliance is the key to prosperity -- for individuals and nations.

[Poohbah]

When our mortal enemies, the communist Chines, get tired of their proxy war and attack us directly, do you think they will continue to sell us ammunition, uniforms, boots, communications equipment, and related hardware at discount prices?

Nope. Someone else will. There's a global oversupply of manufacturing capacity in these areas.

Will we just deliver them pizza's until they surrender?

No, we'll merely sink every China-bound oil tanker with a genuine AMERICAN-MADE Mark 48 torpedo.

Will we convert our video rental stores to munitions factories?

We have munitions factories already, son, they're just not being used right now.

[Texaggie79]

OHH I see what you were saying. "then wonder why the people [here] you have replaced with slave labor [can't] afford [your] products or services."

Are you saying that Americans are not capable of performing a job more complicated than what a third world child can perform?

[SAMWolf]

International free trade, while certainly necessary and useful to an extent, can easily be overemphasized to such a degree that it jeopardizes a country's economic self-interest and national security.

I believe this is the key paragraph in this article.

[tm22721]

In a democracy the consumer is king. All public policy is directed to achieving the lowest cost of consumer goods.

Extrapolate that to the year 3000 when all consumer goods will come from another planet and you begin to see the security implications.

Is the lowest cost always the best thing ??

BUMP

[Protagoras]

Economics 101, Freedom 101.

If ever there was a more discredited theory than force based controled economies, it would be amazing. You and Marx are in essential agreement.

[Texaggie79]

The only case where I can see that applicable to is China. Unless you are going to show me a military threat posed by Canada, Mexico, South America, Taiwan, The Philippines or Europe.

As the saying goes, "Money makes the world go round." Hell, we probably won't even see a real threat from China because the depend on our money so much. When you think about it, international trade PRESERVES security. When you have so many interdependent nations, there is a large motivation to stay at peace. Because, I guarantee you that we would be FAR more hated by the world, if we put up those walls that Pat has been calling for. The USA is a necessity to the world economy. That means that we automatically have allies across the globe that will do anything to not see us fall.

[Texaggie79]

Fancy meeting you here.

[RepublicanHippy]

Ah, but any college Human Geography book will tell us that being part of a "service economy" is a good thing. It is supposed to elevate us to the type of economy found in countries like Sweden. In other words, total socialism!

[Pylot]

It is an interesting problem.

How much free trade is good?

Taken to its ultimate evolution, nothing would be made in America because everything can be made cheaper in a third world country.

So, when we get to the point that nothing is manufactured here any more, what do all of those Americans that are out of work do for a living???

Countries are literally defined by the basket of goods and services they offer. What is the problem with defining our country around a set of goods and services and using our ability to cause pain to others to enforce our position?

America already has a serious current account deficit. That means we purchase more stuff from abroad than we sell to foreigners. No country can sustain a current account deficit for more than three years at a rate of 5% or more without seeing a devaluation of its currency. We are there this year.

So the theory is that free trade is good for business. The problem is that not every American is in or is a part of a business that benefits from free trade.

If shoes cost a dollar, what does that matter if you have not a dime in your pocket??

The really scary thing about all of this free trade to me is that at some point when this country has a serious "depression class" economic problem (~2010) then we will have devolved our working class to the status of the third world and other countries will bring very low paying jobs back to America in order to profit the business of other countries. Not only will Americans take the jobs but we will relax all the rules and regs in order to have the work.

So, for all of you who so rabidly and blindly advocate total free trade post answers back to these questions:

1 - When nothing is made here any more, where will you work?

2 - When the majority of the country is unable to earn a living wage, who will you serve?

3 - What do you think constitutes a reasonable balance??

I don't know what the right answer is, but I do know that if we do not stand together, we will fall apart together.

[Protagoras]

International free trade, while certainly necessary and useful to an extent, can easily be overemphasized

Freemarkets and free trade can't be over or under emphasized. It is either free, or it's not.

[gnarledmaw]

"do you think they will continue to sell us..."

...the chips we us in all of our missles...

[calenel]

International free trade, while certainly necessary and useful to an extent, can easily be overemphasized to such a degree that it jeopardizes a country's economic self-interest and national security.

You can replace the "International free trade" phrase with a whole slew of other terms and the sentence is still true.

[Gunslingr3]

Is the lowest cost always the best thing ??

Yes, because it allows for the creation of more and more wealth, unless you hold that that is a bad thing...

I think the anti-free traders need to extrapolate their doctrine. Grow your own food, build your own house, sew your own clothes. I'll stick with providing fellow man something I can make that he wants, in exchange for something he makes that I want...

[Dog Gone]

Too bad I have to leave for the airport now and won't be near a computer for a few days. I'd love to discuss the many points of disagreement I have with your conclusions.

Hopefully, others will set you straight.

[SAMWolf]

Part of the problem is that right now it isn't free, some countries either limit or prohibit American goods in their markets. The American taxpayer also backs loans to other countries so they can "buy" our goods and when those loans are defaulted on, we get stuck with the bill.

Unfortunately, Free Trade does not equate with Fair Trade in today's world, IMHO.

[Protagoras]

Taken to its ultimate evolution, nothing would be made in America because everything can be made cheaper in a third world country.

This has more to do with the usurpation of free market rights than trade restrictions or lack thereof. Government controled (fascist) wage and price controls make foreign manufacturing more cost efficent. Don't blame the freemarket for the failures caused by the restrictions upon it.

So, when we get to the point that nothing is manufactured here any more, what do all of those Americans that are out of work do for a living???

You might peruse two graphs at the same time. The first one showing the rate of manufacturing going away from the country, and the other showing the employment rate. It might illustrate the wrong thinking involved in the conclusions you draw.

[Protagoras]

Part of the problem is that right now it isn't free, some countries either limit or prohibit American goods in their markets. The American taxpayer also backs loans to other countries so they can "buy" our goods and when those loans are defaulted on, we get stuck with the bill.

The failures of government are the problem, not the free market. You blame problems caused by government interference on the freemarket.

Unfortunately, Free Trade does not equate with Fair Trade in today's world, IMHO.

The market is better able to define "fair" that any group of individuals arbitrarily deciding it.

[Texaggie79]

1 - When nothing is made here any more, where will you work?

The problem with your assessment is that you stated that EVERYTHING can be made cheaper in third world countries. Cheap isn't the only qualifier. Efficiency is. That takes into account, quality, price, time frame, ect. Obviously, we have resources that other countries do not. Our top resource is knowledge and technology. Products still require research and development, engineering, ect. The fact that our resources are free from menial, cheap, unskilled labor means that we can focus completely on higher end jobs, which results in us being the most efficient in performing those services.

2 - When the majority of the country is unable to earn a living wage, who will you serve? How will that happen? Even if, somehow, that happened, that would simply create a micro economy within our nation that would serve itself, and as the major companies lost business, they would be forced to participate in it. It will always be self correcting. You need to get out of the "us vs them" mentality when it comes to the economy. Buying products from Tanzania should be viewed no different than buying products from a State on the other side of the country. Imagine if I snapped my fingers and all of the world was America. Would you still fight against getting products from another continent? 3 - What do you think constitutes a reasonable balance??

Whatever it is, the FREE market will find that out on it's own.

[nightdriver]

"Free trade serves a very few at the top of international corporations, but it does not serve the average American. Rather, it takes away his job and his nation's strength."

Lonsberry hasn't gone far enough with his interpretation. He hasn't extended "free trade" to our own country. I see qualified people who would love to go to work for what a lot of other people going on strike are making. In a true "free trade" arrangement, different unions would have to compete for their contracts just like the rest of us have to.

The international system is going to be out of balance for quite a while until other nations catch up with us. When their wages equal ours, they won't have cheap labor to compete with ours. Unfortunately, this may take a century or more.

What we need to do is export liberalism so foreign companies have all the same tripwires and regulations as we do here in the USA.

[Protagoras]

So, for all of you who so rabidly and blindly advocate total free trade post answers back to these questions:
1 - When nothing is made here any more, where will you work?

The question assumes the answer, namely that "nothing" will be made here at some point. That is of course, incorrect.

2 - When the majority of the country is unable to earn a living wage, who will you serve?

The majority of our country will always be more able to earn a living compared to the rest of the world as long as we are freer than them. Your "solution" makes us less free, therefore, if it happens, it will be a self fulfilling prediction.

3 - What do you think constitutes a reasonable balance??

You don't have to think about it, the market will decide.