The hidden cost of free trade

THE WASHINGTON TIMES ^ | September 18, 2005 | Jeffrey Sparshott

[TheOracleAtLilac]

But, the bureaucratic strangleholds exist & cannot be ignored

[Ninian Dryhope]

Thanks for the tip.

[bkepley]

But just one more thing. If we got rid of all the unwanted regulations and bureaucracies then no country would sign a free trade agreement with us because we would kick there buts in any production

It's like a line from Atlas Shrugged..from one of the villains of course, arguing through some sort of perverse logic that inefficency is actually a good thing.

[PositiveCogins]

Maybe she replaced some one who making more who is now being
reeducated to take someone else's job who will then be unemployed........

[abovethefray]

No one has asked the million dollar question...what kind of masseuse?

[bkepley]

Maybe she replaced some one who making more who is now being reeducated to take someone else's job who will then be unemployed........

....or going in the reverse direction some poor blacksmith is out of work.

[JasonC]

What on earth are you talking about? Somebody has an unskilled job in an unimportant industry, the job is unprofitable, they get new training for a job that is actually wanted and do said job. What is supposed to be wrong with any of that? "But she makes $2.50 less than she did before". So the bleep what? On average wages rise over time, but only on average. Of course they go down in some industries and for some workers, all the bleeding time. Why shouldn't they? The value of the work is set by its usefulness to consumers now, not by what a given worker did for consumers 10 years previously.

[Ninian Dryhope]

"I just don't know why some people just can't see that."

They would rather jump into the wayback machine than adapt to the new realities. Nothing is more sure than that things change and free trade is here to stay, given the state of the modern communication and transportation systems.

Over time, everyone in general benefits from free trade, although there are always going to be individual winners and losers when one is forced to compete. Competition and the market place are wonderful spurs to industry and innovation, which leads to progress.

[JasonC]

What in your opinion does a trade deficit have to do with the gains from trade? Is trade profitable inside a country but not outside?

[expat_panama]

let's review the definition of capitalism once again.

I think we need more work on this.

cap•i•tal•ism

Pronunciation: (kap'i-tl-iz"um), [key]
—n.
an economic system in which investment in and ownership of the means of production, distribution, and exchange of wealth is made and maintained chiefly by private individuals or corporations, esp. as contrasted to cooperatively or state-owned means of wealth.

In the future, let's try not to have any more confusion as to who controls the markets and what system has the government controlling prices.

[bert]

....Free trade is not free.....

The marginal costs noted are insignificant when balanced against the benefits.

Free trade is not what gets people riled, change is what riles. The inability to accept change is a mortal disease

[Ninian Dryhope]

Nonsense?

[bert]

....We must maintain some kind of low income job market for those who will never "rise to the occasion".....

We have the job market, but the jobs are taken by Mexicans who don't do drugs and who come to work every day.

[PositiveCogins]

Your question reminds me, I read somewhere where some country that had legal prostitution was cutting off womens welfare checks if they refused to take jobs as prostitutes.

[expat_panama]

...its not import taxes, NAFTA, CAFTA, outsourcing thats a threat to my job...

Dang!  we do have a lot in common, besides both being guitar-playing Texan construction workers.   I have got to tell you about Panamanian construction.  I've got the time sheets that prove that it costs the same per square foot to pay an American $25/hr as to have the work done by a Panamanian for $1/hr.

You are spot on by saying it's the government, not the foreign worker that we're fighting.

[v. crow]

Wrong! You really missed the reality in that example. The factory in Mexico is not more "efficient", the labor is simply cheaper. In the immediate, it made the American worker slightly poorer and only provided the Mexican a job.

I don't know the specifics of why a leather factory in Mexico is cheaper than the same one in Maryland, however, I suspect you are correct that the cost of labor is a significant factor. Regulationary onus is probably another one.

Why it's more efficient in Mexico is not my argument. It's indisputed that it's more efficient (meaning less expensive) there by virtue of the leather factory being located there by those folks whose money and capital is being risked. My argument is simply that allowing this to take place through a laissez-faire free market is the best outcome and will result in a net gain of wealth for Americans. The cost of leather products to Americans is less, and they spend the surplus money to employ other Americans to meet their other demands -- including, in the end, those laid off by the Maryland leather factory. Mexicans also benefit from this. A Mexican will take a labor job at the factor in Mexico precisely because it is the best available option (to his knowledge) for employment. The wage may be miserly, and by American standards it is, but if he elects to take that wage, then it logically must be better than what his alternatives are.

Trade is win-win, that's why free people do it, and do so much of it.

[bkepley]

Your question reminds me, I read somewhere where some country that had legal prostitution was cutting off womens welfare checks if they refused to take jobs as prostitutes.

hmm..pretty vague.

[PositiveCogins]

Easy. The value of the money earned. The buying power. Wealth is determined on the value of the currency in trade.
I may see your point here. Todays deficit may loose it's value over time as the currency looses value. But doesn't the deficit debase the buying power of the currency in the first place?

[Tolerance Sucks Rocks]

Mr. Thomas said that for all trade adjustment program workers passing through the consortium, the average wage was $14.36 an hour before the layoffs, while after retraining it was $11.87 an hour, a decline that is common for factory workers who have to restart their lives.

Um, maybe that's because they're *starting* rather than *continuing* or *finishing* in their chosen profession? Wait a few years; wanna bet their wages go up?

[PositiveCogins]

"I think we need more work on this"
I think we need more cowbell.