Posted on 10/16/2017 12:07:04 PM PDT by TBP
The economic argument for free international trade is basically that people produce in order to consume, not the other way around, so the economic system should be geared to the benefit of the consumer, not the producer. In the economic sense, producers include workers and owners of capital or land, who often join in associations called "firms." There are more consumers than producers, as everybody is a consumer but not everybody is a producer; some live off the production of parents, donors, or taxpayers. So there are more consumers than producers; but this is not the important point.
Free Trade Helps More Than Hinders
The important point is that free trade benefits consumers more than its competitive pressure harms producers. Economic theory provides a nice geometric demonstration of the proposition that the total cost of protectionism for consumers is higher than its total benefits to producers. The demonstration can be (imperfectly) rendered in plain English: if free trade harmed producers more than it benefits consumers, the former could outcompete their foreign competitors by bribing domestic consumers with better prices and still gain compared to ceding the market to foreign producers - and protectionism would not be necessary. When domestic producers are unable to compensate consumers for not patronizing foreign suppliers, it means that free trade benefits consumers more than it harms producers.
That free trade would have net benefits is not surprising in light of the theory of comparative advantage, due to 19th-century economist David Ricardo. If two countries - that is, all producers in the two countries - produce what they are most efficient at, the total volume of goods available for exchange and consumption will be larger.
A popular objection to these economic arguments is that a consumer cannot benefit from lower prices if he does not have a job. Since free trade destroys jobs, it cannot be said to help consumers in general. You can't consume if you lose your job - or you have to consume less by getting a lower paying job or relying on transfers, public (unemployment insurance, social welfare, and such) or private (help from family or charity). Let me call this the "populist" objection to free trade.
A first reply is that availability of jobs is a symptom, not the cause, of prosperity. If jobs were the cause of prosperity, banning agricultural technology would generate much prosperity by dramatically increasing employment in that sector. Nearly 12 million Americans worked in agriculture in 1910 (the year when agricultural employment reached its peak) while they number less than 2.5 million today (for a population three times as large). In the meantime, the total number of jobs in the American economy increased from 37 to 151 million. We should beware of the obsession of job creation, especially by government edict.
Even assuming that the number of jobs is a good indication of welfare, the populist objection is not valid. Although some workers can, like other producers, be harmed by competition, free trade does not destroy net jobs. At least as many new jobs appear as old ones disappear.
Job Creation and Job Destruction
Consider the example of manufacturing. The number of jobs in American manufacturing dropped from its peak of 19 million in 1979 to 12 million today. Most recent job losses in manufacturing come more from the impact of technological progress than from import competition; economists Michael J. Hicks and Srikant Devaraj estimate that international trade accounts for only 13% of these losses. And - this is the important point - while manufacturing employment was decreasing, total employment in the economy increased from 99 to 151 million between 1979 and today, for a net creation of 52 million jobs. In the meantime, and this is the really important point, GDP per capita (the most comprehensive measure of the standard of living) increased by 79%.
Another way to approach the populist objection that free trade destroys jobs is to observe that the main factor in employment is population growth. Employment naturally grows in line with population. Every new worker who arrives on the labor market creates his own job in the very real sense that he spends as much as he earns (or the rest is invested, creating jobs too); indeed, it is precisely in order to spend an equivalent amount that he starts working and earning an income (a reflection of Say's law, recently featured in The Economist). The new worker creates his own job by creating another one elsewhere in the economy through his own consumption.
The figure below illustrates the general point by showing the level of civilian employment in relation to the American working-age population (15 to 64 years of age) over the past half-century. Each dot on the chart represents one year. Observe how closely employment growth tracks population growth. A simple regression analysis confirms the visual impression: the coefficient of correlation is 0.992 and is highly statistically significant (at a level of significance much lower than 1%). Because the working population increases with time, the horizontal axis nearly coincides with the chronological order. The drop in the employment towards the end of the curve corresponds to the 2008-2009 recession and the slow recovery that followed.
We thus have both a straightforward economic argument and empirical evidence to the effect that economic freedom in general and foreign trade, in particular, do not destroy net jobs in the economy. The number of jobs moves with the number of people who want to work, barring regulatory obstacles created by government.
That is a scurrilous lie, and I think you know that.
If that's what your case rests on, you have no case.
Exactly in the punishment is that they can’t sell their slave labor products in America.
The service economy has put us in debt to other nations. The plan didn’t work for most Americans. It did make some Americans rich, maybe the 1 percenters. De industrialization had some winners I will acknowledge that.
It’s absolutely the truth there’s nothing in the free-trade philosophy that would prevent products made in the Nazi death camp from being sold in America.
In fact it’s happening today North Korea has active death camps and concentration camps and we allow their products to be sold here.
To a free Trader it’s simply finding a way to build the product as absolutely inexpensively as possible. Free traders ensured that China got permanent most favored nation status and it was disconnected from their behavior.
If we stopped all trade the boom in construction alone would be huge. Wages would rise and their would be some inflation. But the economy would be going on rocket fuel. We’d have winners and more winners.
Nope. All the money that went into capital investment would instead have been wasted on higher priced American made goods, which lets be honest, were getting pretty shoddy back in the 70's. It was free trade that forced American industry to up its game and compete on quality and price. I lived through the 70's and in my opinion we were maybe a couple of business cycles away from losing the cold war during the Carter years.
“If you ask them if the voted for Trump THEY NEVER ANSWER. “
Yep, Hitlery voters. Anti-Americans. Anytime we get a company to come to or stay in the USA they claim it is bad for America. Anytime a company leaves the USA they claim it is good for America.
Tell it to the Japanese ...
Now, since I'm already replying to you I'll toss the following out for the Free Trade crowd and the Protectionist crowd to chew on:
I bought a beard trimmer at Walmart the other day. Getting past some variations in packaging, I had three to choose from. Brand "A" was made in China. Brand "B" was made in Taiwan. Brand "C" was made in USA. Price, for comparable packages, was around $40, with about a $5 spread. Not much of a spread ... and an easy choice to buy American. In that particular market, the choice by Brands A & B to manufacture overseas really didn't save them anything and lost them a sale. Make of it what you will.
A free Trader is not loyal to a nation, they are loyal to the business they work for above their Nation.
That’s simply a cold hard fact. They will damage their Nation to improve their bottom line, and then use sophistry type arguments to try to explain why it’s good for the nation.
What happens when the U.S. plant churns out so many $32.50 toasters that everyone who wants one has three of them? “
Then sell them overseas, but don’t demand the company leave the USA to make them elsewhere.
If you want to race to the bottom of economics, go live in a third-world mudhole.
“Free Trade had a thirty-year test drive in this country. Last November the voters took the keys out, handed them back to the salesman and said “no sale!””
Exactly! We think the cheap imports make for a terrible economic vehicle!
No, government spending did that. And the service economy is only a fraction of our overall economy.
That’s exactly my point if you go to Germany, South Korea and Japan you see factories making all kinds of products right there at home.
They aren’t stupid.
Where do the Japanese get the energy to run their factories?
Nuclear power and oil that they import from somewhere else. There’s nothing wrong with importing things that you can’t produce.
It’s foolish to export all your Manufacturing
If protectionism is so good then all 50 states should adopt protectionist measures against each other.
Again, trade boosts all countries’ economies (including ours) and creates wealth, which is what it’s really about.
http://fortune.com/2011/06/22/how-free-trade-deals-create-u-s-jobs/
https://www.cato.org/publications/trade-briefing-paper/blessings-free-trade
https://capx.co/free-trade-doesnt-destroy-jobs-it-creates-them/
http://dailysignal.com/2011/08/09/how-free-trade-helps-employment-and-the-economy/
http://www.thetruthaboutcars.com/2012/10/protectionism-kills-jobs-as-demonstrated-in-chattanooga/
https://www.bloomberg.com/view/articles/2016-07-01/u-s-protectionism-kills-jobs-and-competitiveness
http://www.jewishworldreview.com/0716/ponnuru070516.php3
The Constitution doesn’t allow that, and for good reason.
If free trade is so good everyone on your block should remove the front doors of their houses. The most skilled man should do all the work for all the houses on the Block the hottest wife should put out all the sex the best cook should cook for all the families.... how selfish to insist on one economic family unit being relatively independent
Japan is a nation.
Does Japan have sufficient domestic energy resources to sustain its economy?
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