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.

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.

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.

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.

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.

How much free trade is good?

All that we can obtain. "If an exchange between two parties is voluntary, it will not take place unless both believe they will benefit from it. Most economic fallacies derive from the neglect of this simple insight, from the tendency to assume that there is a fixed pie, that one party can gain only at the expense of another." -Milton Friedman

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

That's a fallacy. There are more than simply the costs of labor to consider. Workmanship, transportation and competitive advantage are just a few others.

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???

They do that which their neighbors most desire from them and they are most able to do, if they seek the highest rewards for their time.

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?

The purpose of the government is to defend my liberty and property. Not to cause pain to me or those I seek to trade with.

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.

A devaluation of our currency by foreign holders of said currency would only be a price response to our government's inflation and the holder's own preference for what price to sell his goods. His pricing power is, of course, limited by his competition, and the demand of American consumers. There's nothing nefarious or bad about this (well, aside from our government devaluing our money via inflation).

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.

So what? Not every American was in the candlemaking business when light bulbs were invented. The candlemakers had to adjust to meet the demands of those who have money to exchange. This is beneficial as it steers production (of goods and services) to meet demands. Surely you don't hold otherwise?!

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

Non sequitor. If you want to make money you have to do something that people want. It matters not that your father, and your father's father were candlemakers. Times, thankfully, change.

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

I will work in a capacity that meets the demands of my neighbors for goods and services. No different than now.

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

Why would people be unable to earn a living wage? Free trade has boosted the standard of living of Americans to the lead in the world. Our poor have air conditioning, refrigeration, automobiles, and a host of goods that would have been unthinkable luxuries for the rich just 150 years ago. The reason this has taken place is specialization of labor and the associated relative reduction in costs. You propose undercutting the process that has made us the envy of the world. Limiting our ability to cut consumer costs would only serve to stagnate the standard of living by locking spending on goods at their current level.

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

The most reasonable course is to not thwart the very system that generates our wealth. You, nor any other bureaucrat, is endowed with the foresight to arbitrarily set price and wage levels. That is the economic nonsense that bankrupted the USSR. Quit trying to institute the madness here!

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