TCS Daily


Where Right, Left and Center Agree

By Daniel B. Klein - October 24, 2007 12:00 AM

About two thirds of economics professors vote Democratic. In other social sciences and humanities, the vast majority of professors vote Democratic. So we should expect professors to favor Democratic policy positions.

But there is one issue that professors, right and left, seem to agree on: It is good to let Americans and people of other countries trade freely.

The Club for Growth has organized a free trade petition signed by 1,028 economists. Truly, this voice represents economics.

Many of the economists who signed the petition are on the left. Many are libertarians. Many are conservatives. Like the case against slavery, the case for free trade crosses ideological lines.

Professors on the left see that people in Brazil, China, and India also count as human beings. The gains to them are gains to humanity.

Also, folks on the left oppose corporate welfare. Why should American consumers pay higher prices on footware, lumber, or dairy to protect American corporations?

Professors not on the left, whether libertarian or conservative, also favor free trade. They favor economic enterprise. They see gains from greater scope of trade.

Adam Smith said the division of labor is limited by the extent of the market. He saw that productivity increases when work is subdivided and specialized. But specialization only makes sense if the market is big enough to reward the investments and risks in specialized production.

Free international trade increases the extent of the market. International buyers and sellers thicken the market, and make the markets for specialized goods more competitive and reliable. That's what makes further specialization justified in the minds of entrepreneurs. They go forward with specialization, and they enhance productivity. They make things used by people the world over.

That's why we all gain from increases in the extent of the market. Large, thick, international markets invite the productivity investments, and the result is better stuff at lower prices for all of us.

Today, the extent of the market is vast. That's one reason why humanity is better off than in the past. People in China are part of a great chain of beings, a chain that works to make stuff for humanity. Humanity would be happier still if the market were free of protective duties and quotas.

Economists don't agree on much. But almost all economists favor freedom of trade. It is an exceptional consensus in economic opinion.

However, "the man in the street" is less supportive of free trade. That's because he hasn't thought through the ways in which Americans benefit by foreign efforts, and how buying from foreigners is connected to their buying from Americans. Opposing trade with China is like opposing trade with Ohio.

Also, the "man in the street" tends to think of Americans as a special race. Footware made in America seems better because it was made in America. That is a foolish prejudice that professors, right and left, have learned to see beyond.

The larger perspective sees the matter in an abstract way: "country A and country B." The larger perspective sees the great chain of beings. There's no good reason to be nationalistic about it.

Politicians are something else again. They must gratify the prejudices of 51 percent of the voters. The mass of voters is like a beast with a whip over the politicians. Politicians prostitute themselves, sometimes by favoring protectionism. But practically every politician, Republican and Democrat, knows that, really, protectionism stinks. Politicians cater to voter foolishness.

To overcome nationalistic prejudice, to get the politicians to do what's right, the public at large needs to learn the virtue and wisdom of free trade.

Economists don't serve as much of a guide in society, because they disagree so much. But when they do agree, it is time to listen.

The Club for Growth's new petition speaks for economic enlightenment. May it also speak for ordinary Americans, and for humanity the world over: Keep government out of the way of two individuals who want to trade, though citizens of different countries.

Daniel B. Klein is Professor of Economics at George Mason University and chief Editor of Econ Journal Watch.


Categories:

62 Comments

no agreement
I don't believe this guy. We see economists all the time advocating for various restrictions or distortions on trade, like sanctions, embargoes, tariffs, quotas, etc. But they will never say they're against free trade, in the same manner that many of the autoritarians around this forum will never come out and admit to that either. So an economist might say, "yes, I like free trade, but I just think we should subsidise our farmers by a few billion more this year". Or Jeffry Sachs will say he likes free trade but the governemnt should just force the citizens to give billions more in aid to dysfunctional countries.

The "man in the street"
is molded (through the Public Education System) by the politicians (with the whip, as the author so aptly put).

And I don't think economists of all hues agree about free trade as depicted in this essay

If economists agreed
why bother keeping track of a 'trade deficit'?

The Media Messiahs in the Streets
Dietmar, I think it is likely the case that those economists who do not, or are willing to say they do not, favor "free" trade are the ones who get their voices most often heard in the American media. The media are made up mostly of economically ignorant creatures, so when a economist wants to say "yeah, free trade, it's great!" they are reluctant to publish him or give him air time, and instead hunt up the minority report. Remember, this is a nation in which Robert Reich is sold as an economic genius by the media.

Free is as Free Does
To my other comment, I would add that Leftists' notions of "free" trade are not the same as those of guys like the Masonomists.

Oh, and most public school educators also vote Democrat.

Thus, what is wrong with the American educational system is now revealed.

Because
sellers of financial magazines and advertising departments of financial websites need something like that to keep selling copies and advertisements.

About two thirds of economics professors vote Democratic
Now, that factoid right there just blows my mind.

What a fable
This article is pure theory and fable. For one, America has free trade policies with some countries, I would think an analysis of the effects on all parties of those policies would serve well in an article like this. Assuming its meant to be an educational article and not another cheerleader routine. Duh! Of course its a cheerleader routine.
I also think its incorrect to say there is a consensus of economists who support free trade policy. Perhaps if the author offered more than qualitative information from a cheerleader source like the Club For Growth, it would be more convincing. It might help too to stay away from gross connections of unsupported data. Two-thirds of economists are Democrats? How can one NOT question that statistic? I don't know if its true, apparently the author doesn't either since its not sourced. Its certainly not logical.


Free trade IS an ideal, it is a very worthy goal, but it is just not the best policy across the board at this point in time. Once again in economic theory, reality crashes the party. Its been years since I've read about the real effects of America's free trade agreements with South American countries, but my memory is that those policies are not universally beneficial to those countries, or America. Which, unless you take cues from this article, you know it doesn't have to be perfect, but its not even close. Even some of the points espoused in the article are opposite in reality. The people in most need of help are being damaged further by free trade agreements with America. The wealthy farmers in SA are benefitting pretty well. But maybe thats the point, the author has the idea that if the wealthy do well it means everyone is doing well. Huh, sounds eerily familiar.


>"However, "the man in the street" is less supportive of free trade. That's because he hasn't thought through the ways in which Americans benefit by foreign efforts, and how buying from foreigners is connected to their buying from Americans. Opposing trade with China is like opposing trade with Ohio."

Actually, I think "the man in the street" knows how we benefit by foreign efforts- we get cheaper goods.

Trading with China is like trading with Ohio?? How ridiculous! And do you really think if we buy more from China it means China will buy more from America?? Gosh, I'm sorry, I find that rather ignorant. China will buy more from America when we offer the right goods at the right price. Thats a serious challenge given the American economy is so much more advanced(expensive) than the Chinese economy.


>"Also, the "man in the street" tends to think of Americans as a special race. Footware made in America seems better because it was made in America. That is a foolish prejudice that professors, right and left, have learned to see beyond."

A special race?? Stop the madness. Footwear may be one of the few examples where a Chinese made product is as high a quality as American made. Really, does anyone believe, in general, that Chinese products are as high a quality as American?


I'll stop there. There are about 3 more paragraphs that are just ridiculous that I could point out.

I do see some interesting framing in this article though. Its as though its a plea to liberals to buy the argument and a swat at potential objections that could come from Republicans. Pretty interesting. Well constructed from that perspective. But it relies on a lack of critical thinking in the reader to buy into the premise of the article. Might work at a conservative convention, but not on TCS.

Ivory Towers
Since most teachers don't have to live in the real world, most don't. So they want the state to take care of their un-real lifestyle for them.

Teachers do not see theirs as a competitive profession, they do not like competitors or even competing viewpoints, and therefore do not want competition to be a signficant factor in the marketplace.

politics and media...
Politicians are not being dragged around by 51% of the voters, as suggested by this article. Politicians manufacture and manipulate emotional issues through which voters might be divided into two camps and thereby competed for through beautiful rhetoric. Free trade and the threat to the American worker is only one such issue.

Similarly, the media seek out bad news. When they are too superficial to discover actual, underlying problems to be discussed they simply create a dramatic story out of something they (and their readers) understand poorly...but that might seem to be important. In the end all writers fancy themselves to be great novelists. They much prefer fiction to the facts.

And insofar as Economists (those Professors who never actually worked in the real world, especially) have not the slightest clue what is going on with global financial capitalism, and when they are reasonably good writers...they might say any number of things that make little business sense.

"International buyers and sellers thicken the market, and make the markets for specialized goods more competitive and reliable. That's what makes further specialization justified in the minds of entrepreneurs. They go forward with specialization, and they enhance productivity. They make things used by people the world over."

Free trade and global markets do not create enterpreneurs. Well managed, local banks create entrepreneurs.

Entrepreneurs do not necessarily enhance productivity. Microsoft and Oracle do their part.

And entrepreneurs do not "make things used by people the world over". By the time they are doing that entrepreneurs are not entrepreneurs anymore. They are mature (garden variety) industrialists.

Branding
Who could be against Free Trade? It's free! It's trade! When you give it a name like that, everyone's got to be in favor of it.

The only thing is, a free trade agreement could be written on the back of a napkin. You only need one sentence:

"The undersigned agree to erect no protective tariffs against imports from the other parties."

Guess how long the verbiage in CAFTA is?

765 pages.

http://freerepublic.com/focus/f-news/1422242/posts

So what's in those 765 pages? Restrictions. Conditions. Exceptions. All couched in impenetrable language.

To call such a thing "free trade" is to indulge in Orwellian language, as "to ensure peace, prepare for war", or "arbeit macht frei".

So you support real, free, trade?
Or do you prefer the regulated, 'free' trade?

Re: What a fable
bobjones wrote:

"Two-thirds of economists are Democrats? How can one NOT question that statistic? I don't know if its true, apparently the author doesn't either since its not sourced. Its certainly not logical."

The author of the article, Daniel Klein, appears to have surveyed social scientists in the 2003 (see: http://www.insidehighered.com/news/2005/12/21/politics) and this is the basis of his claim.

bobjones wrote:

"Once again in economic theory, reality crashes the party"

Actually, given the simplicity of the classic economic theories and models, it's rather amazing how accurately they have approximated reality for so long. May I suggest that you read about "comparative advantage" since it is a particularly famous theory in econmomics and one that is related to trade?

bobjones wrote:

"And do you really think if we buy more from China it means China will buy more from America??"

No and it doesn't matter. America need not export a single thing to China in order for both parties to benefit from a one-way trade arrangement.

bobjones wrote:

"Really, does anyone believe, in general, that Chinese products are as high a quality as American?"

I think that you're confusing "quality" with "value."

bobjones, are you a high school student? If so, I would encourage you to take some introductory economic courses if you enroll in college. If not, may I suggest you pick up a copy of "Basic Economics: A Common Sense Guide to the Economy" by Thomas Sowell. This is not a bad introduction to economics for people that have no intention of formally studying it but who are, nonetheless, interested in the subject matter.

Cordially,
Paul

What's that?
Not sure what you're talking about. Let's take CAFTA. Is that "real" or "regulated" free trade?

Assuming you agree it's highly regulated, give us an example of a "real" FTA. One with only a single rule: no tariffs and no subsidies.

'no tariffs and no subsidies'
Is that what you want or are you just being critical of the nomenclature?

Branding trade
It's because they don't use the ancient meaning of 'free'. That would be just like you who also have different definitions of 'capitalism', and 'extermination', as pointed out in other stories.

The meaning of "free"
I wouldn't know the ancient meaning of free in your language. But in mine it means without rules and conditions.

These FTAs require an emerging country to buy into our entire neoliberal trading scheme before we remove our punishing tariffs. It's just trading one set of restrictions for another. They would be better off getting away from the dollar and forming a separate market.

We share the same definition of capitalism.

And as for the concept of extermination, let me ask whether the Jews were exterminated. My answer would be yes, in that they were targeted and killed just for being Jews.

Yet the world still holds lots of Jews. Many more, in fact, than it holds intact American Indians who've been able to retain their way of life. So both peoples have been at one time exterminated, like the Armenians or the Gypsies.

Chinese made shoes are a poor bargain...
They're either uncomfortable or they fall apart too soon for my taste in footwear. If there aren't any American shoe companies to buy shoes from, German made Birkenstocks are a better quality even though initially pricey. Lasting longer makes a difference to me! I hate it when shoes wear out way too soon. That's one reason I won't buy shoes at Walmart anymore. It's can get too expensive having to buy replacements every few months because they can buy Chinese made shoes dirt cheap. Replacing sure isn't dirt cheap.

Why doesn't it matter?
bobjones wrote: "And do you really think if we buy more from China it means China will buy more from America??"

PaulDude wrote: "No and it doesn't matter. America need not export a single thing to China in order for both parties to benefit from a one-way trade arrangement."

So I'm curious as to why you think it doesn't matter if China buys American products to offset products Americans buy from China. It's NOT like it's any bargain for us if we buy cheap made imported stuff when it falls apart & we have to buy replacements for it. I like having the option of buying better made & longer lasting American made stuff instead of cheap stuff imported from China. Americans are NOT benefitting from buying imported junk. Walmart might be benefitting from selling it until people get fed up & stop buying the shoddy imports! Shipping companies might be benefitting from transporting all that cheap stuff over here to sell to gullible consumers. Consumers gain only a temporary benefit from buying cheap imports as they will have to buy replacements soon enough...


They're victims of the educational system...
After attending classes taught by liberals for long enough to become professors, it's no wonder that they vote for Democrats! Few have had anything other than Democrat type teachers so that is what they've been trained to believe.

Do you want free trade?

Huge free trade disadvantage for the US: health care
Corporate competitors in Europe and Japan aren't burdened with huge, ungainly, expensive and perversely designed insurance schemes for health care. Neither are the self-employed. As a continuing serious of news items out of all kinds of industries illustrates, this is a major problem for U.S. competitiveness abroad - even with a rapidly devaluing dollar. But wait - someone's about to pop up and say "the US has the best health care in the world."

Professors (and Mafia hitmen) support free trade
Of course Economics Professors support free trade. For them it's a one way street. They get lower prices from overseas under their "highest and best use principle" but they don't risk LOSING their jobs, their homes, and their status because they have (or expect to have) the PROTECTION of TENURE. Asking economists about free trade is like asking nuns about sexual positions. Neither has experienced the phenomenon.

Of course Economic Professors support free trade.
For Economics Professors "Free Trade" is a one way street. They GET lower priced goods; but they pay nothing and risk nothing because they are protected, or expect to be, by TENURE. For them Free Trade is all benefit and no cost.Free trade doesn't put their job, their status and their home at risk.

Asking a Professor his or her opinion about free trade(sic) is like asking a nun about sex positions. Neither has much experience in the area.

Of course Economic Professors support free trade.
For Economics Professors "Free Trade" is a one way street. They GET lower priced goods; but they pay nothing and risk nothing because they are protected, or expect to be, by TENURE. For them Free Trade is all benefit and no cost.Free trade doesn't put their job, their status and their home at risk.

Asking a Professor his or her opinion about free trade(sic) is like asking a nun about sex positions. Neither has much experience in the area.

Trade must be responsible and fair, before it can be free
When importing goods from overseas our tariffs on their goods should mirror their tariffs on our goods. We should also refuse to import goods made with slave or child labor. There is nothing wrong with greed, so long as it is moderated by fairness and responsibility.

Advantages of Trade with china
Cooltruth--

While I agree with your value judgments on some Chinese products, there are a lot of people who cannot afford Birkenstocks (which, BTW, are made in Germany) or want a cheap shoe for some other reason. I had a roommate in college who had studied economics but always bought the cheapest clothes and shoes he could find, despite hearing me endlessly point out to him that one good but expensive pair of shoes is cheaper in the long run.

Here are some reasons why Chinese trade (I think we're both using "China" to stand for any low-wage country where exports to U.S. are greater than imports from U.S.) is good on its own terms:

1. It finances the lack of savings in the U.S. as represented by the federal budget deficit; countries and companies need a safe place to stash their cash, and the U.S. in general (and U.S. government debt in particular) is the safest investment currently available.
2. Many Chinese companies are subsidiaries of U.S. companies and therefore U.S. management and shareholders benefit from this in the long term.
3. Many products billed as made in China are fabricated, to a large extent in the U.S., and shipped to China for assembly. The fabrication is a higher end activity than assembly.
4. Much of the technology used in Chinese factories is purchased or licensed from U.S. companies, thereby helping high-end U.S. industries that have better-paying jobs than cut and sew or electronic parts assembly.
5. To generalize from 2 through 4, having China supply us with products produced by low-wage, low-skill workers for less than we could produce them for ourselves both provides us cheaper products and frees our productive capacity to focus on higher-wage, higher-skill products that we can sell for more abroad (even if not directly to China).
The concepts in number 5 are part of "comparative advantage" mentioned by PaulDude, a concept that anyone thinking about international trade should learn ASAP.

We should be saying "freer trade"
The goal of NAFTA, CAFTA, WTO, GATT, etc., are to try to eliminate some of the barriers to trade and move to freer trade.

The U.S. itself practices the opposite of free trade in some areas: sugar and ethanol tariffs, for example, imposed with the design and effect to make the import of lower-priced sugar and ethanol economically impossible. The result is that sugar prices in the U.S. are much higher than world sugar prices, but so are the incomes of U.S. sugar growers and producers.

So if we ain't going to permit totally free trade, no one will.

Try looking at price
Price is actually a better indicator of how long lasting a pair of shoes might be. Country of origin is a pretty iffy guideline. Fifteen dollar shoes at Shoe Time only last a year. Forty dollar shoes will stay intact until the soles are gone.

Birkenstocks will cost you more, but hey, go for it.

We agree
The main sticking point in ALL trade discussions is agricultural subsidies. Both the US and Europe insist on keeping them.

These produce chaotic consequences in developing countries, where a barefoot farmer with a hoe can't compete with cheaply dumped ag surplus from the developed world.

I would dearly love to see actual, no-strings free trade. But as you describe, this country is not yet ready for it.

the goal of GATT and the WTO
acougar--

The concept in your first sentence is the goal of GATT and the WTO, as well as most of our bilateral trade agreements.
I agree with your first two sentences.

However, trade policies perceived by one country as fair and responsible are often regarded by its trading partners as discriminatory and protectionist.

And I would not use "greed" but rather "trade." Done right, trade benefits everyone.

Is labor part of the Free Trade equation
That is to say, if the left, right, and center agree that free and open trade across all borders is GOOD, then why not labor? If we adopted that position, then there'd be no such thing as illegal immigration and the current uproar about this would be moot.

Quality and Cool Truth
Hey Cooltruth,

When you write, "I like having the option of buying better made & longer lasting American made stuff instead of cheap stuff imported from China," you are, as that dude Paul says, mixing up quality with value.

This doesn't make you a dumbass, or anything like that. They don't call economics the "dismal" science for nothing.

When an economy optimally gives people what they VALUE, it has nothing to do whatsoever with giving people what is of the best QUALITY. Quality is only got hold of by incident.

However, any and all measures to attempt to ensure that people always get top quality always degraded into tyranny. So...if you want to enjoy the right to free speech, then you have to permit a lot of stupid talk. And so on and so forth.

You cannot assume that the typical person values quality. This then becomes a philosophical problem, rather than an economic one. At this juncture, you would do better to read books like 'Zen and the Art of Motorcycle Maintenance' than you would read essays at TCS Daily.

Perhaps "Fair Trade" Would Sit Better with You, as far as Terminology
"Where would this great nation be without this great land of ours?"

Uh... Mr. President, here in the dictionary under "redundant" it says, "see redundant."

Immigrants are worth less than slaves used to be, after all.
Exactly how much are you willing to hurt a foreigner to help an American? Is a foreigner's well-being worth three-quarters as much as an American's, or half as much, or one-quarter as much?

Let's do the math: When we admit an unskilled Mexican immigrant, his wage typically rises from about $2 an hour to $9 an hour—call it a $7-per-hour gain. To justify keeping him out, we'll have to weigh that gain against the harm he does to Americans.

Right away, our calculation runs into a problem, because on balance immigrants don't harm Americans; virtually all economists agree that immigration makes us richer, not poorer. Every immigrant is a potential trading partner, a potential employee, and a potential customer. He bids down wages, but that's a two-edged sword: It's bad for his fellow workers, but it's good for employers and good for consumers.

In the very short run, most of the gains go to employers, and a substantial fraction of those gains probably go to people named Walton. In the somewhat longer run, all that excess profit gets competed away and shows up in the form of lower prices for consumer goods. At that point, even the workers who took pay cuts can come out ahead: If your wage falls by 10 percent while prices fall by 20 percent, you're a winner.

But let's ignore ALL that. In order to make the best possible anti-immigrant case, let's ignore all the benefits of immigration and focus STRICTLY on the costs to American workers, i.e., falling wages.

Since we're talking about a single immigrant, wages fall infinitesimally—but you've got to multiply that infinitesimal drop by millions of American workers. A high-end estimate is that 100 million Americans experience wage drops of about $.00000003 per hour. Multiply that out and you have a $3 per hour loss. (Note to econ-geeks: I assumed a wage rate of $10 an hour and an elasticity of wages with respect to labor of 0.3.) This estimate comes from the labor-economics literature, and it really applies only in the very short run, because in the long run, falling wages attract new businesses, which partly bid wages right back up again. But let's ignore all that, too, and assume a worst-case scenario, where the short-run effects are somehow never ameliorated.

Bottom line: When the immigrant crosses the border, Americans lose $3, and the immigrant gains $7. To oppose that, you'd have to count an immigrant as less than three-sevenths of an American.

But wait! It's worse than that. The $7 gain went to a $2-an-hour immigrant. The $3 loss came from $10-an-hour Americans. And we usually think of a dollar as more valuable in the hands of the desperately poor. The most conservative standard assumption is that the value of an extra dollar is inversely proportional to your income, so an extra dollar is worth five times as much to a $2-an-hour Mexican as it is to a $10-an-hour American. The immigrant's second dollar is worth a little less, and the third a little less than that.

Accounting for all that, it turns out that the immigrant's $7 gain is worth about five times the American's $3 loss. In other words, to justify keeping the immigrant out, you'd have to say he's worth less than one-fifth of an American citizen.

By contrast, there was a time when the U.S. Constitution counted a black slave as three-fifths of a full-fledged citizen. Alabama Gov. Bob Riley has recently apologized for the ravages of slavery. How long till politicians apologize for the ravages of our restrictive immigration policies?

~ Steven Landsburg

Re: Why doesn't it matter?
Cooltruth wrote:

"So I'm curious as to why you think it doesn't matter if China buys American products to offset products Americans buy from China."

No "offset" required. With the free exchange of goods and services, both the buyers and sellers are better off -- it's a "win-win" sort of thing.

Look up the terms "consumer surplus," "producer surplus" and "total surplus."

Cooltruth wrote:

"I like having the option of buying better made & longer lasting American made stuff instead of cheap stuff imported from China."

Exactly.

Cooltruth wrote:

"Consumers gain only a temporary benefit from buying cheap imports as they will have to buy replacements soon enough..."

The assumption that some authority can make the calculation of value more accurately than the marketplace, has lead to one economic disaster after another. You must know this.

As Adam Smith wrote in The Wealth of Nations: "I have never known much good done by those who affected to trade for the public good."

Here's a readable, short and fair discussion of international trade theory by an economist:

http://www2.bc.edu/~anderson/PalgraveTrade.pdf

mmmmm, good tripe
Its too bad you select snippets of what I said, stretch it to a different meaning, and throw it back like its the full picture. Gee, quite similar to Klein's method of presenting only what supports his ideology. Is this a cheerleader convention or what?


>"The author of the article, Daniel Klein, appears to have surveyed social scientists in the 2003 (see: http://www.insidehighered.com/news/2005/12/21/politics) and this is the basis of his claim."

First of all, thank you for the link. Its a fantastic site, I have it bookmarked. Talk about intellectual, thats good stuff. At least theres something of value in your comments.

Klein claims two-thirds of economists are Democrats based on a study of social science profesors...
So good, we have proof Klein's claim is misleading and incorrect. Two-thirds of economic professors are Democrats, according to this qualitative study. Thats the tip of the iceberg, I couldn't find the methodology to see how many interviews were actually economic profesors in the total sample of social science profesors. I did however see plenty of criticism of the study, and others like it, in that they exaggerate their findings to fit a predetermined political message. Seems Klein's article here fits that description pretty well. He's trying to AlGore us.


>"Actually, given the simplicity of the classic economic theories and models, it's rather amazing how accurately they have approximated reality for so long."

I agree. I can see I likely implied I think economic theories are bogus using the words "Once again" in my statement. Thats my bad. The words were in response to repeated debates on this site when an economic theory is used to defend a real, existing case, where the theory breaks down because reality didn't match.

For example in this case. Klein espoused the mighty value of free trade and that we should do more of it, basing his position solely on theory. I said we should look at the affects of our current free trade agreements, besides relying on the theory of free trade, to determine if its a good policy at this time. Why did you ignore the basis of my point PaulDude? Instead you stretched what I said to something different. If I read "comparative advantage" will it convince me to use theory as a basis of argument instead of reality?


I said: "And do you really think if we buy more from China it means China will buy more from America??"

PaulDude: "No and it doesn't matter. America need not export a single thing to China in order for both parties to benefit from a one-way trade arrangement."

Thanks for confirming my point. Agreed, it doesn't matter. Klein said it matters. Something to the affect that if we buy more Chinese goods they will buy more American goods.

And I don't understand the concern out there about our trade deficit with China either. I don't see why it has to be balanced. The market will dictate. If we want to sell more in China we need to adjust our market strategy to incent them to buy more from us. As I said, "China will buy more from America when we offer the right goods at the right price."


I said: "Really, does anyone believe, in general, that Chinese products are as high a quality as American?"

PaulDude: "I think that you're confusing "quality" with "value.""

How do you get that from what I said??

I was talking about quality because Klein was talking about quality. Klein: "Footware made in America seems better because it was made in America." It is! I referred to China in my response. American products ARE generally higher quality than Chinese. Aren't they? Does reality teach us that? I don't speak from ideology, American goods are not necessarily the highest quality goods available. Some are, some are not. But compared to Chinese goods, I think American goods are overwhelmingly higher quality.

My comment had nothing to do with "value". "Value" is not the same as "quality".


Yeah, I'm in high school dimbulb. Lick 'em. I won't argue that I know more about economics than you do. I took the classes, I know the basics. You talk a lot for not saying much, but your superiority complex is obvious. I'd be happy to debate if you have something serious to say instead of this vague exaggeration and evasion BS.

"I would dearly love to see actual, no-strings free trade"
But you want the government to force businesses to pay minimum wages, force CEO pay, .....

no agreement
I agree, there is no agreement.

free trade + extermination
The meaning is the same in my language, but many people have alternate ones,like free except for all the conditions we apply, like those crappy FTAs.
We don't at all have the same defintion of captialism, mine is: private property, free markets, rule of law. Yours is: "Let me point out a very big distinction. "Capitalist" has a very specific meaning.
It encompasses the use of capital as a means of gaining power over the human race".
Cha and also, you said, "Capitalism is the use of profit to enslave everyone who hasn't been able to make
a profit.". Isn't it distressing that I found your statements so outrageous that I saved them.
RE extermination. I think it means more like; to wipe out completely, anihiliate, kill all of them. The naazis with the Jews wanted to, tried to, but didn't sinc they lost the war. But the Americans in contrast did not have any such official, institutionalized policy like the naazi, 'Vernichtungsbefehl'.
And what's all that about the red indians retaining their way of life; cars, microwaves, cell phone, guns to hunt with, gambling casinos. Where do any indians live in teepees and ignools, etc. boil water on clay pots, cut wood with stone axes; nonsense.

Do the GATT and the WTO really have our best interests at heart?
I'm not convinced they do... nor am I convinced that what's in the interests of those with loads of money and power is in the interests of those in the middle and working classes. Is the WTO and GATT looking out for the average American, or even the average Costa Rican, or are they looking out for the interests of multinational corporate giants?

When we close a factory here in the US that makes widgets for $5 and export those jobs to China so that we can get our widgets for $3... I think were being driven by a desire for profit, not really a desire for trade. Over the long term this isn't always a bad thing, however I'm disinclined to call it trade.

I agree
Fingerprint them, make sure they don't have a criminal record and then issue them a work visa. Once there are no more jobs for them, they will stop comming. The ones already here with no work, should get a free ride back to the border. If they hold a steady job for 3 years and don't break any laws issue them resident alien cards.

Free Trade Isn't
Gee! I guess just accepting products with lead paint or other poisons in food products just makes me a happy int'l free trade proponent. Is it free trade when workers in lithium plants wear no protection, not to mention the workers in chlorine plants (plants that are spewing the gas into the community)? Is it free trade when 13 Chinese workers die daily in coal mines? Is it free trade when our own govt. gives these countries billions of our dollars so we can have "free trade"? We can have free trade with Canada,the UK and other countries on a similar economic scale, but there is no way to have it with China, Mexico or other third rate countries.

"moderated by fairness and responsibility."
Moderated by whom?

Why do you think slave labor is more profitable?

What should be most important for any consumer is value for the money.

To manufacture quality products at the best price requires dedicated and motivated workers. Slaves are not dedicated and find ways to sabotage products. Even bored factory workers in the USA will do things to products out to spite.

In any country that has much poor labor, and attracts factories to use that labor, eventually create competition for such labor, driving the price of labor up and its quality.

If slaves make poor quality products, who will buy them? The only way slave labor is profitable is when the government protects markets and prevents free trade.

Demand
The Chinese are finding out what it means to satisfy a customer.

For decades, customer satisfaction was not high on the list, especially when they had a captive market.

Change did not occur in the USA overnight why should we expect it for China or India or ....?

China needs more free trade
"expanding trade and rising incomes tend to promote higher social standards. As incomes rise in developing countries, their people and governments are able to devote more resources to protecting the environment and lifting labor standards, while an expanding middle class begins to expect and demand improvements in the environment and working conditions. Empirical evidence shows that as nations reach middle and upper income levels, their environmental policies and indicators improve. Working conditions also improve and rates of child labor fall. Foreign investment in developing countries contributes to this "race to the top" by creating better paying jobs and by "importing" better business practices and work rules. Contrary to the "race to the bottom" myth, low wages and lax environmental rules are not an irresistible magnet for foreign investment. Foreign investors seek property rights protection, a functioning legal system, a well-educated workforce, profitable markets, and sufficient infrastructure. That is why most of the world's foreign investment flows between rich, high-standard economies."

http://www.freetrade.org/faqs/faqs.html#one

do not assume
"Moderated by whom?"

We the people.

"Why do you think slave labor is more profitable?"

If I'm going to harvest Sugar Cane, the less I spend on labor the greater my profit. If slave labor or something akin to it is the cheapest labor available, it's going to be the most profitable.

"To manufacture quality products at the best price requires dedicated and motivated workers. Slaves are not dedicated and find ways to sabotage products. Even bored factory workers in the USA will do things to products out to spite."

Labor needs to be motivated (we usually accomplish that with compensation) however motivation and compensation are most definatly not the same thing. Most people are motivated to survive, if the only way to survive is to pick apples, harvest sugar cane or make Nike shoes, people will do it with enthusiasm.


Labor in free markets
Why does the USA import workers to perform hand labor in the fields. They can't pay American workers enough. Teen-agers used to pick raspberries in the NW. A machine has been developed to harvest raspberries. Notice how many raspberries are now available?

If countries like Mexico or Brazil or any other turd world country developed its economy, through free trade, sugar cane would be harvested by machine or the price of sugar would rise to cover the labor cost.

Keeping third world countries undeveloped, with protectionism, creates a slave labor pool.

Here's the part you don't understand
...and I'll admit, it took me a while before I could understand.

The three elements of trade that must have global mobility in a system of truly borderless commerce are investment capital, finished goods and raw materials, and labor.

But of those, only two are of any benefit to business owners and investors: goods bound for market and capital bound for investment opportunities.

Labor mobility is only of benefit to the little people. Why bother?

Ironically, now that serious efforts are being exacted to keep the little people out of this country, fruit and vegetable prices are going up as crops rot in the field. It turns out they weren't taking jobs from good Americans-- they were taking jobs Americans won't take.

Cost more initially but last better and...
the Birkenstocks are more comfortable for my feet. Believe me, I've tried shoes (from Walmart) produced in China. My feet weren't very happy with them. Sure, you can buy cheap imported stuff at Walmart & think you're getting a bargain because the purchase price is inexpensive. My Birkenstocks cost about $60 ordered online from Piperlime. They cost around $100.00 when they aren't on sale, but last at least as long as five pairs of cheapie sandals will last for me. I dislike buying sandals that break before summer is half through. If somebody likes buying new sandals every couple of months, they might do better buying several pairs of cheap sandals. It just looks like another case of 'penny wise & pound foolish' to buy things that break easily from my point of view. I like solid built & comfortable even if it is priced a little more to start with.

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