"If soldiers are not to cross international borders, goods must do so" – so wisely said a now-forgotten aide to F.D.R.'s Secretary of State Cordell Hull. And Ed Glaeser makes this important case in yesterday's Boston Globe. Here's his closing paragraph:
Other countries provide us with clothes, cars, markets for exports, and
lending for the government and banks. Shutting our markets will make
life more expensive for us and hurt the rest of the world. In the
1930s, legislators embraced high tariffs, but putting America first led
to a devastating world war. Today, US lawmakers need to choose hope
over fear, and stick with free trade.
lending for the government and banks. Shutting our markets will make
life more expensive for us and hurt the rest of the world. In the
1930s, legislators embraced high tariffs, but putting America first led
to a devastating world war. Today, US lawmakers need to choose hope
over fear, and stick with free trade.
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{ 49 comments }
Read your history: Nazi germany and the Soviet Union had heavy trade just before Germany invaded.
The point is not that the positive relationship between trade and peace is perfect — very few such perfect relationships exist in the social world. It's a tendency, well-documented in the empirical literature.
"Nazi germany and the Soviet Union had heavy trade just before Germany invaded."
I'd view these two historical representations of modern day Germany and Russia as atypical.
"Nazi germany and the Soviet Union had heavy trade just before Germany invaded."
-ST
That may be true, but protectionism as a whole was rampant.
"Read your history: Nazi germany and the Soviet Union had heavy trade just before Germany invaded."
Since when did the 1940 German-Soviet Commercial Agreement become an example of free trade? Please read the history a little more carefully.
I agree with Tim. Trade between two totalitarian governments is not free trade between people.
http://en.wikipedia.org/wiki/German-Soviet_Commercial_Agreement_(1940)
The originator of that wise quote is actually Fredric Bastiat.
I see. So you will either wave away contrary evidence by saying its atypical, or re-define free trade so that the evidence does not apply.
Real intellectual rigor there. You must be a product of America's proud educational system.
Free trade does not deter war or encourage peace. Even worse, free trade leads to "begger thy neighbor behavior" where each country tries to be the country with the lowest wages, the least labor protections, and the minimalist environmental standards.
If you live off a trust fund, free trade is great. If you have to work for a living, it stinks because free trade leads to depressed wages, lack of benefits, no job security, and horrific labor standards.
But why should you care. Its all about increasing corporae profits. That's the point of life, isn't it. To create corporations and ruthlessly make them profitable regardless of the human suffering which results.
To create corporations and ruthlessly make them profitable regardless of the human suffering which results.
Humans suffer a lot less than they did, 20 years ago, 50 years ago, a 100 years ago, a 1000 years ago, and ever since we have some sort of written record of history.
Quote from SpeakTruth: "Read your history: Nazi germany and the Soviet Union had heavy trade just before Germany invaded."
How can two government's, one communist and one fascist, have free trade? Two groups of criminals selling their plundered loot to each other is not free trade.
SpeakTruth:
Trade leads to a greater division of labor, which along with technical advance is responsible for nearly all economic growth.
I'm trying to convince myself that you're correct and just can't do it.
Can you point to any examples where protectionism has "worked"?
Can you point to any examples of non socialist countries with strong trade agreements going to war?
You might consider the economic history of Argentina; economically similar to the U.S. before pursing socialism and protectionism around 1900.
South Korea, Chile, Singapore are also good examples of countries which saw success after abandoning protectionism.
I have toured factories in Southern China, and indeed I wouldn't want to work in one. Rather than explain why I think your view is wrong I suggest you read Johan Norberg's "In Defense of Global Capitalism" or watch:
http://www.youtube.com/watch?v=7FwAPKOH5tQ
"Free trade does not deter war or encourage peace. Even worse, free trade leads to "begger thy neighbor behavior" where each country tries to be the country with the lowest wages, the least labor protections, and the minimalist environmental standards."
-SpeakTruth
Ladies and gentlemen, I believe we have a new muirgeo in our midsts.
That's interesting ST. Have any numbers to back those claims up, or are you just regurgitating something you read in in a Naomi Klein book?
I am continually amazed by this bizarre superstition that free trade "depresses" wages.
Let's compare the lower class worker from the 18th century to a modern one.
The 18th century guy didn't own any livestock and had to walk everywhere.
The 20th century guy has a car, which usually costs him 6 months wages. To own a car in the 18th century (a two-wheeled horse drawn vehicle with seats for two-three passengers), the laborer would probably have to work 10 years or so.
The 20th century guy has access to fresh vegetables and meat, and can eat a 2000 calorie per day diet for about 1 hours wages. his 18th century coutnerpart struggled to keep 1600 calories on the table, and could only afford meat on special occasions. Generally he worked 2 hours a day for that privilege.
The 20th century guy has access to warm clothing that is easy to clean, is stylish, and durable. he can spend as little as 2 weeks' wages per year to keep himself fully clothed. Shoes cost 2 days wages. In the 18th century, most lower class couldn't afford shoes, as they cost about 2 months' wages. What clothes they had were expesnive, costing about two month's wages for an outfit that was hard to clean etc.
The 20th century worker can send a letter around the world for a cent or so. The 18th century laborer, assuming he knew how to read and write, would spend 4 hours wages to send a letter 10 miles away.
Etc etc ad nauseam.
The notion that somehow free trade leads to reduced wages is a superstitious belief that is about as true as the superstition that having one's picture taken steals part of one's soul.
Mises' chapter in Human Action lays it out well.
Awww, man…
SpeakTruth,
You were doing so good until paragraph 3 and 4.
That's where you missed the ability of the labor market to move from country to country and ignored the law of comparative advantage.
See… Here's the thing. If country A lowers their labor standards and wages, no-one wants to work there. They want to go to Country B. So suddenly it becomes more difficult to attract labor in country A. All together now, what happens to wages when it's difficult to attract labor?
Then you missed the mark when it comes to comparative advantage. A great example of this is the US auto market. Right now, there are autoworkers losing or about to lose their jobs. Trade took their jobs away because other people seem to be able to produce cars cheaper. But the problem is again that your argument is emotional and has such a narrow view. The result of this trade is that every single person in the US is able to purchase a cheaper car. Which number is more representative of the US population for when we calculate the effects of trade? The 1 million employed in the auto industry? The 5 million or so in related industries? Or the 306 million customers?
Last but not least, you can see the progress of countries around the world. Look at Brazil versus Venezuela/Columbia. Look at Singapore vs other Asian nations. Look at S Korea vs N Korea. In fact, take a trip to Asia sometime and check out the national versus international "sweatshops". I'll give you a hint right now: The international manufacturers are cleaner, have better working standards and pay more.
And as an extra treat for those that have actually read down this far. One of my old international trade profs was running a study of special interest groups in 5 US states (can't remember which off the top of my head). The study was to find the correlation of leaders and organizers of special interest groups. Specifically, comparing groups based on "preserving American jobs" with "protecting overseas workers". Want to guess what the preliminary correlation was? 85%
SpeakTruth; "If you have to work for a living…."
If you work for a living, and the working environment changes, you find another line of work. Only the political types (i.e., the lazy) think the world owes them a living.
Obviously I am dealing with trust find babies with only a tenuous hold on reality. Let me respond to the elitist nonsense, knowing full well that your wealth makes you blind to the reality that the average worker faces. But what the hay, its Saturday. Why not try to educate the uneducateable?
â…Have any numbers to back those claims up, or are you just regurgitating something you read in in a Naomi Klein book?â
RESPONSE: You see, since I actually work, unlike you I donât have to only read books to see what is happening with the working classes. Factory closings have been going on across the USA since the 1980's. Manufacturing is dying in the US. The service sector is now being hit. Ever wonder why itâs someone in India who answers when you have your butler call to complain to customer service about a product or service? These jobs are being lost because foreign companies can do it cheaper by not paying a living wage, by not offering benefits, by not limiting work hours, by not accommodating workers with disabilities, and by not complying with environmental standards of any kind.
âI am continually amazed by this bizarre superstition that free trade "depresses" wages….â
RESPONSE: Call your doctor. Youâre insane. Maybe itâs a superstition when youâre living off a trust fund and have never worked for a living. I live in that part of the world of which you are only dimly, dimly aware. You know, the world of working people, people who donât eat if they canât work. Yeah, these people actually exist. Really. And most of them have lost their jobs because in another country there were workers willing to work for less, under worse conditions, with no benefits. And by the way, the 20th century worker of whom you brag about saw higher wages, better benefits and a higher standard of living not due to free trade, but because of the labor movement. Have your butler bring you a history book on the labor movement. Youâll find it fascinating.
âSee… Here's the thing. If country A lowers their labor standards and wages, no-one wants to work there. They want to go to Country B. So suddenly it becomes more difficult to attract labor in country A. All together now, what happens to wages when it's difficult to attract labor?â
RESPONSE: All together now, just how easy is it to uproot your family, leave your country of origin, learn a new language and culture, and obtain a new job? And doing all this as you try to support your family during the transition? In your twisted mind, you think this would be a breeze. Oh, yeah, buddy. It would be a real breeze. Particularly when (according to your hypothetical) you are doing this as part of a mass migration of workers who also looking for a better job in the same foreign land? Ever wonder why migrant workers are notoriously underpaid and miserably poor? How would you like to do it along with your friends and loved ones? Oh, of course, you were talking about the lower classes, not your social class. Because youâre special. And since youâre rich thanks to having won the lucky sperm lottery, you donât need to work anyway. By the way, now show me once in history where such a mass migration occurred and resulted in better labor conditions.
Obviously I am dealing with trust find babies with only a tenuous hold on reality. Let me respond to the elitist nonsense, knowing full well that your wealth makes you blind to the reality that the average worker faces. But what the hay, its Saturday. Why not try to educate the uneducateable?
â…Have any numbers to back those claims up, or are you just regurgitating something you read in in a Naomi Klein book?â
RESPONSE: You see, since I actually work, unlike you I donât have to only read books to see what is happening with the working classes. Factory closings have been going on across the USA since the 1980's. Manufacturing is dying in the US. The service sector is now being hit. Ever wonder why itâs someone in India who answers when you have your butler call to complain to customer service about a product or service? These jobs are being lost because foreign companies can do it cheaper by not paying a living wage, by not offering benefits, by not limiting work hours, by not accommodating workers with disabilities, and by not complying with environmental standards of any kind.
âI am continually amazed by this bizarre superstition that free trade "depresses" wages….â
RESPONSE: Call your doctor. Youâre insane. Maybe itâs a superstition when youâre living off a trust fund and have never worked for a living. I live in that part of the world of which you are only dimly, dimly aware. You know, the world of working people, people who donât eat if they canât work. Yeah, these people actually exist. Really. And most of them have lost their jobs because in another country there were workers willing to work for less, under worse conditions, with no benefits. And by the way, the 20th century worker of whom you brag about saw higher wages, better benefits and a higher standard of living not due to free trade, but because of the labor movement. Have your butler bring you a history book on the labor movement. Youâll find it fascinating.
âSee… Here's the thing. If country A lowers their labor standards and wages, no-one wants to work there. They want to go to Country B. So suddenly it becomes more difficult to attract labor in country A. All together now, what happens to wages when it's difficult to attract labor?â
RESPONSE: All together now, just how easy is it to uproot your family, leave your country of origin, learn a new language and culture, and obtain a new job? And doing all this as you try to support your family during the transition? In your twisted mind, you think this would be a breeze. Oh, yeah, buddy. It would be a real breeze. Particularly when (according to your hypothetical) you are doing this as part of a mass migration of workers who also looking for a better job in the same foreign land? Ever wonder why migrant workers are notoriously underpaid and miserably poor? How would you like to do it along with your friends and loved ones? Oh, of course, you were talking about the lower classes, not your social class. Because youâre special. And since youâre rich thanks to having won the lucky sperm lottery, you donât need to work anyway. By the way, now show me once in history where such a mass migration occurred and resulted in better labor conditions.
"Obviously I am dealing with trust find babies with only a tenuous hold on reality."
-ST
Wow… You're wrong.
"Factory closings have been going on across the USA since the 1980's. Manufacturing is dying in the US."
-ST
And yet our standard of living rose over that same period.
I asked for NUMBERS and you during your mindless rant you produced none. Now I will produce some —
http://www.aier.org/research/commentaries/206-the-decline-of-manufacturing
Take a look at these numbers and see if your small mind can grasp them.
He thinks we're all rich?
So rich people spend time posting on blogs such as this?
OK, who here is rich?
Certainly not me.
Why have American workers been at a competitive disadvantage?
Maybe it's because we have to support a very expensive government and its expensive empire.
Maybe it has something to do with all the bureaucracy and entitlements.
I would love to be rich. One day…
Re: Speaktruth.
Somewhere in California tonight, muirduck sits in stunned realization that there is someone even more stupid than he is; and, he worked so hard to establish supremacy.
It is just like the old west only it is now about comparing the fast draw to socialist idiocy.
Muirduck was the most stupid socialist we knew and here comes Speaktruth with his "fast gun" and his blazing stupidity makes muirduck seem like a mere retard in comparison.
Don't even try to explain the obvious to an idiot like Speakstruth, you're wasting your efforts.
I'm sure that the idiotic contracts that industries and unions agreed upon, like fourteen-week vacations every fifth year, or production bonuses paid for unsellable products had nothing to do with factory closings.
Steelworkers were paid tonnage bonuses on steel before the steel went to quality control. If the steel was rejected by QC, it was sent back to the mill to be melted and made again – for another tonnage bonus.
Unionized, American steelworkers were once the highest paid labor in the world. At the end of their reign, they were definitely not making the highest quality steel in the world. Their demise was self-inflicted.
Toyota and Nissan (among others) made the decision that it was a competitive advantage to manufacture their products in the US – provided the labor was unencumbered by idiotic, anti-productive union rules, and the union mentality.
Chief among the reasons big business and organized labor sought access to political power was to gain some relief from the discipline of competition.
When they succeed, it is always at the expense of the consumer, particularly the poor.
@SpeakTruth… Free trade lets me go to WalMart a week before Christmas and make all the kids on my list very happy for not much money. It also has accounted for about half my lifetime income selling software and development services without government restriction to people in other countries.
Signed,
BoscoH,
Trust fund kid
tarran – it's useless to compare the common man's position to the 18th/19th century analogs. People only care about how they are relative to the rich. So what if a lower middle class guy has a car? He wants that fancy Lexus that he can't have and that makes him envious and violent of temper.
Crusader,
Superstitious people like SpeakTruth are probably beyond helping.
But this blog is read by lots of people who are capable of rational thought, but have only been exposed to the tripe ladled out in government schools. It is those guys whom we must reach.
SpeakTruth,
Everyone doesn't have to migrate to force wages up. Only a small group of the population has a MAJOR impact on wage rates. Anywhere from 2-5% of an industry would represent an enormous shift of the labor pool.
The funny thing is about the military is that there is no trade impact to it's labor market. You can only serve in the military of the country you hold citizenship in. The government can't send the labor elsewhere. Don't you find it strange that somehow soldiers are paid less than almost all other jobs that can be moved between countries while working anywhere from 8-20 hours a day? What were you saying about exploitation being related to jobs that can be sent elsewhere?
For bonus points, take a wild guess how I know that.
From my essay, Outsourcing Saves American Jobs:
"But while Americaâs own policies price its labor out of the market, cheap imports, reducing the cost of doing business in America, price it back in. So, without them, there would not be more but fewer jobs in America, and lower paying, for they boost the purchasing power of our money and real wages."
Thanks to free trade, American young men have more opportunity but less burdens in the future. On the cantrary, because of protectionnism of EU and Japan, European and Japanese young men have less opportunity but more burdens in the future comparatively.
Nowadays many young talented men and women is desiring to work and live in the USA. the bunch of young brillient students are going to US college for studying, even spending expensive tuition fee.
This is reality.
Manufacturing is dying in the US.
Oh, so that's why manufacturing OUTPUT was increasing.
These jobs are being lost because foreign companies can do it cheaper by not paying a living wage…
What is a living wage? Is that the threshhold income level that, if one were to make a lower amount per hour, one would cease to live?
…by not offering benefits…
So that's why the Indian workers have such fierce competition for these call-center jobs; there's no benefit at all to working them [/headscratch]
…by not accommodating workers with disabilities…
When the able-bodied are competing, too. You'd think that there's still some semblence of Indian socialism in place that provides a safety net for these diasbled people so that they would have to toil at such a miserable job that does not pay living wages or benefits but yet many people seem to want nonetheless.
…and by not complying with environmental standards of any kind.
Surely you're not meaning to imply that India's rapid growth has something to do with them not hamstringing themselves with overreaching and heavyhanded environmentalism that produces little benefit for the tremendous cost.
You know, the world of working people, people who donât eat if they canât work. Yeah, these people actually exist.
They won't live for long, though. They are making below the living wage and therefore, as it stands to reason, are going to drop dead anytime now. And hell, let's not kid ourselves, there are no government programs that offer any kind of assistance so that people can live at the expense of others…it just doesn't happen in the U.S. because "most of them have lost their jobs because in another country there were workers willing to work for less, under worse conditions, with no benefits." Well, most of them except for the majority that DO, IN FACT, participate in the labor market.
And by the way, the 20th century worker of whom you brag about saw higher wages, better benefits and a higher standard of living not due to free trade, but because of the labor movement. Have your butler bring you a history book on the labor movement. Youâll find it fascinating.
The higher wages and better benefits came from the productivity gains of workers. If I had a butler, I'd have him send you an economics textbook. But somehow I doubt that you'd find it fascinating if your worldview bias and forced-collective paradigm couldn't be busted through. You'd have some real heartburn on the topic of utility.
All together now, just how easy is it to uproot your family, leave your country of origin, learn a new language and culture, and obtain a new job?
It's probably very difficult and damned near impossible. Perhaps the 20-something million undocumented immigrants in our own country would be the ones to ask about just how hard this is.
Ever wonder why migrant workers are notoriously underpaid and miserably poor?
I just wonder how in the hell there are any in the first place since it's not easy to do the things that you catalogue in the preceeding sentences of your paragraph.
By the way, now show me once in history where such a mass migration occurred and resulted in better labor conditions.
In the very short run, it probably cannot be shown. In the long run, which portion of 20th century United States would you like any of us to point to?
Quote from SpeakTruth: "Obviously I am dealing with trust fund (sic) babies with only a tenuous hold on reality."
OK, start with unsubstantiated ad hominem attack.
Quote from SpeakTruth: "Manufacturing is dying in the US."
Then make an unsubstantiated claim to justify my anger. By the way, would you consider agriculture to be dying in the US? Only about 2% of the country's labor force works in agriculture, but they create enough food to feed the world.
Quote from SpeakTruth: "…, but because of the labor movement."
Make another unsubstantiated claim that's been inculcated to me as religion since I was a child.
Quote from SpeakTruth: "And since youâre rich thanks to having won the lucky sperm lottery, you donât need to work anyway."
And end with another ad hominem attack.
Wow, I can't understand why I'm not convinced.
To quote the often overlooked, but truly great line in the musical Rent… "The opposite of war is not peace. It's creation."
"Obviously I am dealing with trust find babies with only a tenuous hold on reality."
Your Ad hominem implies that trust fund babies support free-trade. A short list of trust fund babies in the Senate include John Kerry, Ted Kennedy, Jay Rockefeller, Diane Feinstein, and Mark Dayton. Non of these people support free trade. But maybe you are right that they have a tenuous hold on reality.
LCJ, that was a herculean post.
And it hit the nail on the head.
"You can only serve in the military of the country you hold citizenship in." -Cheers
This isn't true. There are plenty of people serving in the U.S. military that are not citizens and other countries have similar arrangements.
SpeakTruth wrote: The service sector is now being hit. Ever wonder why itâs someone in India who answers when you have your butler call to complain to customer service about a product or service? These jobs are being lost because foreign companies can do it cheaper by not paying a living wage, by not offering benefits, by not limiting work hours, by not accommodating workers with disabilities, and by not complying with environmental standards of any kind.
Not always true. For example, I have a buddy who literally outsourced his own job to India. He maintains an office here in the states but lives and manages his back office in India. His company does medical transcription. His doctor customers dictate into a phone in the afternoon here, and his transcribers have the transcript ready for the doctor in the morning. His value proposition lies in the roundness of the planet, not cheap labor. He'd have to scale up a hundred fold for the labor component to really come into play, and even then, the supply of English speakers with medical terminology knowledge and a lack of other opportunities in his neck of the woods is constrained. His main competition is software, but he will probably provide distinguishable better quality for several years to come. And he's not exploiting his workers by forcing them to work at night, as he would have to if he provided the same service with US workers.
Please lay off Speaktruth,
As someone who advises many large corporations, I am very thankful of folks like him. Without him and others, we (as in the large corporations I advise ) would have to compete against foreigners. This allows us to make larger profits than we would otherwise have done. Free trade is our enemy, it makes us compete against those poor bastards coming in from the field. Sure their lives sucked, but they are much better off in those crummy factories in China. However, much the better for us; I wish to again extend my thanks to those anti-corporate typesâyou will make us more profitable than before.
Its the old "If you believe in capitalism, you must never have done an honest day's work in your life" argument. I've heard it before, and will hear it again. From people who clearly don't know what I do for a living.
Its just an ad hominem, a confession that they have no actual argument.
I think the economic text book SpeakTruth needs is "Economics in One Lesson".
Jayson Virissimo,
My apologies. You can enter with a green card and permanent residency as a legal immigrant. I wasn't aware of that.
just how easy is it to uproot your family, leave your country of origin, learn a new language and culture, and obtain a new job? And doing all this as you try to support your family during the transition?
Hey! That's MY family. Let me answer that: not as hard as staying in a crappy situation.
This kind of thing can only come from the mouth of a whiny American who thinks that all good things should be served to them on a silver platter. The reality is that people have been picking up their families and emigrating to greener pastures for thousands of years. Only the losers are too stupid to do so. That's basically how this country became so populated.
I wonder how many trust fund babies there really are. You always hear about them, and how apparently they are the only people who stand up for capitalism and free trade, but I have never personally met one to my knowledge. I know a guy who set one up for his daughter, but did so in such a fashion that she will have to work until she is 50 or so, or else she would get really hungry.
I figure I should be in just the demographic age range for it to have met some, so where are they? Is there some sort of data on how many people live off trust funds, and where they are? That might be interesting… I would bet they are largely in the coastal California area and in the Massachusetts to NYC area.
Is there some sort of data on how many people live off trust funds, and where they are?
How many hold elected office?
Sam: Apparently very few, if we are to believe they are staunch bastions of capitalist ideals!
Probably many politicians were TFB's, if I were to make a serious guess. I would further guess that many leftist activists are as well.
I would further guess that many leftist activists are as well.
Therefore afflicted by guilt that they have so much with so little effort and think that everyone should be similarly situated (but obviously not motivated to give away their booty and get a real job).
Free trade has only brought us junk made from increasingly despotic, Third World countries. Increased availability of junk means very little.
That's not free trade, that's undermining the First World.
Free trade has only brought us junk made from increasingly despotic, Third World countries.
I've gotten some very nice junk from 3rd world countries. I have a usb powered PIC programmer for less than half the cost of one produced within and it works fine.
I have some high brighness LEDs also from TWCs, they work fine too.
No, it's free trade.
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