Completely support free trade. Specifically proper free trade, with subsidies thrown out.
As a caveat, it would be nice to use some of the extra wealth generated to re-train and re-skill workers finding themselves unemployed as a result, in the spirit of Pareto optimal savings.
I'm pretty much pro-free trade. But a decent social safety net is absolutely necessary.
I do think that some free traders exaggerate the gains from trade while downplaying the losses. I have no proof of it now, nor do if feel inclined to go look for anything to back this up but some free traders do seem to act like the world will end if we don't sign one more free trade agreement.
I do think that some free traders exaggerate the gains from trade while downplaying the losses. I have no proof of it now, nor do if feel inclined to go look for anything to back this up but some free traders do seem to act like the world will end if we don't sign one more free trade agreement.
The world won't end, but creating barriers to trade is pretty much like throwing money out the window for no good reason. So people get quite frustrated about it.
An article in the New York Times today caught my attention. Specifically this:
The article goes on to elaborate that support for free trade usually declines in economic downturns. I am doubtful that a near half drop in support comes entirely from an economic downturn.
I think in general, the developed countries' populations don't support it nearly as much as the developing countries', economic downturn or not. Lost jobs are much more easily noticed in America than lower prices on Chinese-produced goods, so a lot of those anti-globalization, anti-outsourcing voices get turned into the mainstream opinion, whereas developing countries want the jobs and income and welcome integration.
There are a lot of people in developing countries that are against free trade also. They tend to have riots about it even. Because most of the populations of most of the LDCs are being made worse off by trade.
There are a lot of people in developing countries that are against free trade also. They tend to have riots about it even. Because most of the populations of most of the LDCs are being made worse off by trade.
It's rare that I agree with both you and Skad, esp. at the same time. As I already said in a previous post (No.11) free trade would be great if everybody dropped all their subsidies and protectionist tariffs. At present, though, we subsidize First World farmers and producers while making it impossible for Third World producers to compete. Free trade should be just that, "free", a level playing field for everybody.
if you don't support free trade you support communism.
In the long run the world will benifit from free trade. In some cases you will lose but that has to be excepted for greater gains.
The world won't end, but creating barriers to trade is pretty much like throwing money out the window for no good reason. So people get quite frustrated about it.
I disagree. While free trade increases welfare, it also tends to increase inequality and there are always losers. So if inequality is undesirable to a society, or the losers are really important for whatever reason, protectionism might be justified in a way. As I said, I'm pretty much pro free-trade but I don't like the way free-traders act like there's no losers to free trade, and protectionists act like there are only losers. Economics is not a science in which hard laws exist, it all depends on choices.
There are a lot of people in developing countries that are against free trade also. They tend to have riots about it even. Because most of the populations of most of the LDCs are being made worse off by trade.
This is because in some developing countries unions and left-wing parties "brainwash" people into protesting and rioting, giving them false ideas about free trade. If you ask these people, "why do you oppose free trade?", most of the answers would include communist rethoric and baseless statements about the rich getting richer and the poor getting poorer.
I am pro-free trade because of one simple reason: capitalism works, plain simple. Free trade opens new jobs, opportunities to the people that are willing to take them.
The problem with free trade is that the people at the top don't want to allow it to be more free. Why should Americans be allowed to deprive workers in other countries of chances to compete? Why should Americans keep out competition in their markets when it truly benefits their purchasing power? Why do Americans claim to support freedom, when they dont support global economic freedom?
Sure unemployed people can be loud and angry but allocating the resource of labor to more productive uses ultimately benefits our bottom line.
My understanding right now is that the long-term benefits of true free trade are completely at odds with the short-term focus of both stock markets and politics, and unfortunately short-term wins.
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