Free trade may increase the size of the pie for each country but the pie is not allocated the same way it was before free trade. There are winners and loser in each country and in America, the winners are going to be the owners of capital and the losers are going to be labor. If you consider labor more than another factor of production, if you think labor represents human beings whose lives can be ruined by the economic corrections that occur as a result of free trade, then you might not see free trade as an unmitigated good.
If there was some way to allocate the benefits of free trade so that we reallocated some of the benefits of free trade to the dislocated workers I could see it being a pareto optimal move but the folks who really make out from free trade rarely feel like sharing the bounty they get as a result of free trade.
Couple things about this. First off, it’s only some labor that would not benefit, not all labor across the board. Labor involved in logistics, sales, or the various exports would and does benefit in many cases. Secondly, the ‘folks who really make out from free trade’ share the ‘bounty’ in the form of those tax thingies we all (and they) pay, so that kind of benefits everyone. And this leaves aside the consumers, who generally benefit pretty much across the board by getting more choices and generally lower prices on goods and services that don’t have a bunch of tariffs or local protected monopolies adding a premium because they are the only game in town.
I agree with you that it’s not an unalloyed good for everyone all the time, as there are winners and losers in this as in everything. Just as there were in the almost cliched examples of switch board operators, teletype and electric typewriter repair folks and buggy whip manufacturers who lost out to technology change.
That post of mine was in response to a side-discussion about whether or not we can distinguish between domestic/internal trade and international trade. But, based on your following post in this thread, it seems you (like me) are making this distinction.
Okay, but this doesn’t tell us whether trade regime in question is pareto optimal. If I were doing a study of pareto-optimality, I would certainly start by looking at all the benefits you’ve listed. But, since it’s possible in theory to set up pareto sub-optimal free-trade regime, I have to wonder if our current, real-world free-trade regime is also pareto sub-optimal. And we’ve got a lot of worrying indicators going on, such as decreasing life expectancy in certain groups, falling or flat median wages, lowered living standards in certain populations, etc. That stuff may be caused by things other than the trade regime, or it may be that it’s only partially caused by the trade regime, or it may even be that even with all those worrying indicators we’re still pareto optimal (although I doubt it). But if we’re ending up in a pareto sub-optimal position, then the losers aren’t going to care that they got a TV set cheaper, because they’re still in a worse position even with the cheaper TV set.
Of course, many people don’t care about pareto optimality. There are places in the economy where I don’t care about it either. But at the end of the day, that ends up being a value or philosophical judgment about how we want to structure the economy.
I would like to make another point here. Now that WillFarnaby has said he’s a libertarian, I have a pretty decent idea what kind of stuff he would lump into his definition of “trade barriers,” although I don’t know for certain. My guess is that he would include immigration restrictions as a trade barrier.
But I’d be surprised if the vast majority of free-trade defenders in this thread would include unrestricted immigration in their definition of free trade. adaher, might, but right now, I can’t even tell if he does or not. And I might be wrong, but I think adaher would include currency manipulation as a free-trade barrier, but given WillFarnaby’s self-proclaimed libertarian status, he’d have a completely different approach to currency issues which means we’d have to adjust the conversation completely about how to deal with currency manipulation as a trade barrier.
There was a big thread here a few years back where I made the completely banal point that China’s currency peg was a trade barrier (for the record, I don’t care about their peg anymore). And the posters in that thread simply refused to deal with that point. In their view, currency issues were irrelevant to trade barrier issues. And many of those same posters are in this thread.
So, all the free-trade advocates are using different definitions of free-trade. And, in my experience, when most people are talking about free trade, they are only talking about tariffs. But given that everyone is using a different definition of free-trade, I’ve been making very discrete points. When I make a condemnation of some specific aspect of the current trade regime, that’s not a blanket condemnation of whatever you think free-trade is, because I have no way of knowing what you think free-trade is unless we hammer down specifics.
Yes its not ALL labor but as a group but in this country, labor as a group bears the burdens associated with free trade while the owners of capital as a group reaps the benefits.
Secondly all those owners of capital that pay taxes don’t pay a lot of taxes. We have low capital gains rates and low dividend taxation rates while the folks who are bearing the burden pay ordinary income tax rates. There are factory workers out there that were paying higher tax rates than the capital gains rate and dividend rate paid by the owners of capital. At least when they still had jobs.
Sure, consumers pay lower prices but for the most part and I certainly benefit from cheap 60" flatscreen TVs and cheap clothing.
I agree, tariffs are bad. I’m just spitballing but I might support something like a surtax on income generated from import profits. If the profit margin isn’t high enough after you reduce the profit margin by 5 or 10% then perhaps those are jobs we don’t need to export. Perhaps we could use the import profits tax on unemployment benefits and programs to build up our own manufacturing base.
Free trade between two countries tends to increase the GDP of both countries, and for many that fact ends any debate. But “A foolish consistency is the hobgoblin of little minds, adored by little statesmen and philosophers and divines.” There are several reasons to be suspicious of free trade. marshmallow mentions some of them:
Exothermic reactions sometimes require an activation energy to get started. (You can’t start a fire without a match.) Similarly, those who won’t allow an undeveloped country the time and tariffs needed to jump-start its own industry are happy to relegate such countries to permanent undeveloped status because “the West got there first.”
And of course, it’s common for a $25 U.S. worker to be laid off in favor of a $5 worker from a poor country. Is this good or bad? *It’s likely to seem bad to the laid-off U.S. worker. *
Some actions taken in support of free trade are too bizarre to be defensible. For example, since Disney is a major U.S. exporter, free trade agreements often prohibit subsidization of local films. Encouraging imported films is done in the name of “cultural diversity,” but this is obviously completely backwards now – scarcity of Hollywood movies is not a major problem in most of the world. :smack:
That’s exactly what my thinking was I ranted earlier about “economic religions”. I certainly don’t think economics=religion as someone characterized it. If “I believe in Free Trade!” is as nuanced as you get then that’s an economic religious belief.
And I apologize again for being so cranky early. Thanks for your good posts BrightNShiny and others.
If company B in Slave Country holds slaves and company A in Slave Country does not hold slaves, company C in Free Country would be fine to conduct business with company A. This is not a violation of libertarian property rights. It would in fact be a violation of property rights if a state prohibits or otherwise curtails trade between company C and company A, which is what I think you propose, if not I do not see any disagreement. A libertarian “government” could also prohibit trade between company B and company C if company B was located in Free Country, so to draw some type of distinction because of the international aspect of the trade would be a red herring.
Now that I have regained my libertarian bonafides…
There are many people who call something “slavery” when it is not. People voluntarily working in harsh conditions are not slaves. That is why I reject the appendages you were throwing into earlier posts about poor working conditions, inequality, etc.
Are you suggesting company A and B would be in the same industry yet one uses slaves and the other does not? Tariffs aren’t generally country wide, they are product specific and since we’re theoretical here they could be company specific. Would you still be against tariffs directly aimed at slave company B?
Free trade for me is complete non-involvement in trade by the state or state-like entity.
This includes removing all state impediments to immigration, but also removing subsidies to immigration. I do not consider tax breaks to be subsidies, but immigrants should not be given any benefits from the state.
Nope, and there’s no way you could think I’m proposing sanctions against a company that’s not using slave labor. You are lying about my position.
Well, then great. We all agree that it’s acceptable for the government to deal with slave labor. So, what exactly is your problem?
Are you serious? I specifically pointed out that I was talking about actual slavery. I don’t even know what to do with this. Even when I specify what I’m talking about, you make up crap. You are not engaged in any kind of honest debate. You have to twist and lie because you can’t event follow your own self-proclaimed libertarian principles.
Well, you aren’t a libertarian. What you are is a crony-capitalist.
Yeah, ok, great. Most of the people in this thread who are arguing with me would not even contemplate removing immigration barriers. So, why don’t you go argue with them?
It wouldn’t be the worst thing that ever happened, but I would like to see something like that decided in a court. If a judgement is being made against a company, there should be a burden of proof that rested on the government.
But we don’t really need the government. If there was real deal slavery happening, consumers, if they were made aware of such a thing, could boycott. Every company involved would be risking consumer blowback, from suppliers, to shippers and retail outlets.
In either case, government intervention or boycott, the company is righfully owned by the slaves, as well as anything they produce, including tariff revenue. In a libertarian society, or if the U.S. govt correctly recognized property rights, the slaves would see this judgement rendered, and enforcement services could rightfully appropriate said property on the former slaves’ behalf. This alone would disincentivize doing business with a known slaver and further substantiate a boycott.
You know, I tried to actually do a serious debate with you here WillFarnaby, and approach you on libertarian terms in that debate. But since you decided to just flat out lie about my position, I’m not going to make that mistake again.
This is like that China currency peg all over again. What is it with all you self-proclaimed free-traders that you can’t actually deal with the arguments at hand? Why do you all have to lie and make up straw men? If your free-trade position (whatever that is, and as I’ve pointed out, you all have a different definition) was really so great why do you have to resort to lying and strawmen to defend it?
Talk about naive. Where are all the boycotts on $4 t-shirts made with child labour? The thinnest of veneers gets people like yourself to say “oh, that’s not really slavery”. You can’t even talk about a theoretical slave-holding company without bringing it up. Actually, “naive” is probably the most generous description and not what I suspect is true.
You have people in here talking about poor working conditions already. Those were the folks I was aiming to nip in the bud. If you want to talk about child labor start a thread and I may choose to demolish you there, or not.
You, with apparently a straight face, brought up the idea of imposing a single company tariff due to “slave” labor. Can you name one corporation using forced labor? Lol talk about naive. You believe everything Bernie Sanders tells you about evil foreigners?
There are numerous reports coming out of Thailand and Burma that there’s slavery going on (particularly in the fishing industry). Here’s one example:
I’ve got more if you want it.
Just to head this off, though, since everyone keeps lying in this thread:
I haven’t made any claims about how widespread this is. What I’ve said is that I’m concerned about this, and if someone is advocating free trade, they need to tell me how to address this concern. And I’ve said the data I’m seeing (because I’m seeing a lot of reports out of Burma and Thailand) contradict the one economic model proposed in this thread for reducing this problem. And I’ve said that if someone wants to convince me that the proposed economic model will actually reduce slavery, I’m willing to listen, but they have to do some data crunching.
But, given how this thread has been going, there will probably be a few people along shortly to lie about my position.