'Fair Trade'? Free Trade Is Fair Trade

Investors.com ^ | 12/27/2010 | Walter Williams

[BfloGuy]

Last summer, I purchased a 2010 LS 460 Lexus, through a U.S. intermediary, from a Japanese producer for $70,000.

Here's my question to you: Was that a fair trade?

I was free to keep my $70,000 or purchase the car. The Japanese producer was free to keep his Lexus or sell me the car.

As it turned out, I gave up my $70,000 and took possession of the car, and the Japanese producer gave up possession of the car and took possession of my money.

The exchange occurred because I saw myself as being better off and so did the Japanese producer.

I think it was both free and fair trade, and I'd like an American mercantilist to explain to me how it wasn't.

Mercantilists have absolutely no argument when we recognize that trade is mostly between individuals.

Mercantilists pretend that trade occurs between nations, such as the U.S. trading with England or Japan, to appeal to our jingoism.

[mamelukesabre]

OK, including food or not including food?

intangibles included or not?

including entertainment or not including entertainment?

measured in what way? tons or dollars?

[John Valentine]

Do I believe the United States can function as a unified entity with a national government budget of 26 billion a year?

Of course not.

But the target, even if unreachable, is at least in the correct direction from our current starting point.

[lonestar67]

—Which provide many jobs here in the US along with cars that Americans want to buy.

I am still waiting for someone to show me how the same warnings made in the 1980s about Japan not only did not come true but the US has dramatically improved its position against Japan economically.

Japan should have shut us down buy now with their incredible growth and ‘efficiency.’

[kenavi]

Read the link.

[mamelukesabre]

do you think it sensible to measure output in US dollars?

[kenavi]

do you think it sensible to measure output in US dollars?

What do you suggest?

[mamelukesabre]

I’m not sure. But you could count shipping containers, or weigh them. There’s a problem with going merely by dollars. When china completely takes over one segment of manufacturing, like say tennis shoes, the price drops way way down. So if you are only counting dollars, you are under counting that product.

btw, your link only goes up to 2007. extrapolating to 2010 would put china above america I believe.

[Last Dakotan]

Japan raced to the forefront in these (and many other critical market segments worth billions) autos, light trucks, machine tools, consumer electronics, business machinery, specialty metals, robotics...

Tell me, in which of these segments have they lost market share to competitors?

[kenavi]

But you could count shipping containers, or weigh them.

By your logic, Americans who want a strong manufacturing base should be targetting domestic manufacturers who are reducing the weight of their products!

Maybe you'd prefer the Soviet system, which would brag about increasing shoe production, never mind that the shoes they made people didn't want.

Our system has to start from individual choice and freedom. But we are living in a world and trading with many nations whose governments produce goods on the backs of the health and freedom of their own subjects, er citizens. They export their goods to us and don't buy as much from us. As a result they end up with a big mountain of our green paper they own title to, a bunch of electronic digits in their name. Ultimately, that money can be used only here. They've become just as dependent on us as we on them, more so, since we can feed ourselves and if we need to we can power ourselves as well.

Trade brings the rest of the world our way. Our real troubles are self-inflicted. No outside force forced us to use our homes as piggy banks to finance with debt the biggest consumer binge since the last days of the Roman Empire. We need to focus our efforts and our resources on things that really matter in life.

Happy New Year, by the way, and may you and yours and our Nation be blessed in the coming year and years.

[Eva]

Union members who think that the Democrats are on their side are nuts. The agenda calls for turning the US economy into a service economy, shipping all manufacturing and farming (except for large conglomerate farms) off shore to developing countries. What do you think NAFTA was all about?

Union members don’t listen and they don’t learn. In the neo-fascist state that is being constructed, the union members are nothing but the tools of the government that uses them to bludgeon the private sector into submission. The only jobs that will be left for union members are the service jobs, like the sanitation workers in NYC who caused the slow down of the snow clean up and caused the deaths of innocent people.

[mamelukesabre]

never mind that the shoes they made people didn’t want
~~~~~~~~~~~~~~~~~~

The desireability of a product is inversely proportional to its availability. In a planned economy such as communism, theoretically, a genius would determine the best product for that population and produce it. Then when the alternatives are not available, the “market” would demand the alternatives at very high prices regardless of their intrinsic value. Never mind there’s no such thing as a TRUE perfect genius incapable of error.

Please don’t respond to me by accusing me of advocating communism. I am not. I’m only pointing out a flaw in communism and at the same time a flaw in capitalists’ criticism of communism. At least I think that’s what I’m doing.

[Bastiat_Fan]

You sound like Thomas Friedman.

China will never rise to our level, half their economy is state run. The fundamentals of their economy are horrendous, as on would expect from a centrally directed economy. You can only fake this stuff for so long, as Citi, AIG, and all those folks learned not too long ago. China is headed for a bust of epic proportions. The brilliant technocrats have to balance state enterprises which rely on low (read negative) interest rates, and the real estase market, which is overheating to the tune of Las Vegas in 2006-— times 4. US real estate peaked at an average home price of 6.4 times annual earnings. In China today, it’s 22 times. Bubble anyone?

The fact of the matter is, if you accept that a bunch of officials can run a country better, you should probably vote Obama in 2012. If you hate Obamacare and all that jazz, then you should realize that China is not a true threat. The only threat to our way of life, well, I can point you to a guy that lives is a big white colored house who’s trying to turn our country into Britain. And China has less than zero to do with that.

With all that gobbledygook said, I have no love lost for the red chinese, I’m just willing to give them pieces of paper for tangible goods until their economy collapses.I just wish they sold good quality rope, like the Soviets did.

[Bastiat_Fan]

So China sends us stuff we can use... and we send them.... pieces of paper? Pretty good deal.

[antisocial]

“Japan should have shut us down buy now with their incredible growth and ‘efficiency.’”

I believe they are second only to China in the amount of our debt that they hold.

[mamelukesabre]

Oh sure, great deal until the gig is up. For someone. What you people don’t understand is that work is a privilege and the opportunity to create something of value is priceless. Handing over all that opportunity to enemies of capitalism and freedom is pure insanity.

[djf]

I have read the following, but don't recall exactly where.


For every FIFTY cars that come to America from Southeast Asia,
Southeast Asia allows ONE American car to be imported!!!!



Any FReepers who can confirm, please do!

[lonestar67]

I suspect they have lost market share in all of these items to the chinese— much like the US. The chinese copy other intellectual property— much like Japan used to do.

It is simply cheaper to manufacture out of china these items.

It does not mean that Japan or China are particularly better at generating revolutionary ideas than the US. Japan is a less closed society than China so that helps it significantly.