Free Trade

"No Nation Was Ever Ruined By Trade"

More trade means more jobs.

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The headline is a quotation from Benjamin Franklin, who added, "Even seemingly the most disadvantageous." Franklin believed that free trade was good for everybody. In the 21st century lots of Americans and their politicians believe the opposite: Being open to trade allows rapacious corporations to "ship jobs overseas."

In the 2010 mid-term elections, the Democratic National Committee rolled out a television ad campaign accusing various Republican candidates of favoring policies that shipped jobs overseas. More recently, Senate Majority Leader Harry Reid (D-Nev.) declared, "I think we should do a lot more to stop shipping jobs overseas." In the meantime, the Doha Round of international trade negotiations has been on the brink of collapse for a while, sparking fears the freer trade system painstakingly built over the last 50 years might begin to unravel.

A new study, Trade and Unemployment: What Do the Data Say?, by three European economists published in the journal, European Economic Review in March, forthrightly asks the question: Does exposure to international trade create or destroy jobs? Their answer strongly backs the observation made by Franklin more than 230 years ago. "A 10 percent increase in total trade openness reduces aggregate unemployment by about three quarters of one percentage point," they conclude. To be a bit more precise, they find, "A 10 percentage point increase lowers the equilibrium rate of unemployment by about 0.76 percentage points." Trade creates jobs.

In general, the higher a country's volume of international trade, the higher is its degree of openness. Trade openness is generally measured by adding together the value of both exports and imports and dividing that sum by total gross domestic product (GDP). Crudely, let's say an economy imports $10 billion annually and exports $10 billion annually and has a total GDP of $100 billion. That would yield a trade openness index figure of 20 percent. Another country with a GDP of $100 billion exports $15 billion and imports $15 billion, yielding a trade openness index of 30 percent.

Roughly speaking, U.S. GDP was $15 trillion in 2010, and exports and imports combined totaled just over $4 trillion, yielding a trade openness index figure of 27 percent. Without going into detail, the European economists derive a real trade openness index by taking differing price levels among countries into account.

The researchers then compare the relative trade openness of 20 developed countries in the Organization for Economic Cooperation and Development with their unemployment rates over time. They take into account other factors such as union membership, national employment protection policies, tax rates on wages, and the generosity of unemployment insurance.

The researchers report that generous unemployment benefits correlate slightly with higher unemployment, suggesting that workers have less incentive to look hard for work. Also, high unemployment correlates with the size of the tax wedge, that is, the difference between what employees take home in earnings and what it costs to employ them. Basically, this means the higher the income tax rate, the higher the level of unemployment.

The researchers go on to analyze the effect of freer trade on a selection of 62 developing countries. They take into account features like the size of the black market economy and whether a country is landlocked or not. Again, they find that openness to trade boosts employment, concluding that "the effect of a 10 percentage point increase in openness lowers unemployment by about 1 percentage point."

So why does free trade create more jobs? The study suggests that freer trade boosts overall productivity, enabling companies to hire more workers. Trade enhances competition which weeds out inefficient firms and allows more productive ones to expand. As the average efficiency of firms in a country increases, they can earn more revenues by boosting production. And that leads to hiring additional workers. 

To get some idea of how much opening international trade further would benefit people, economists at the Peterson Institute for International Economics in Washington, D.C., calculate that concluding the Doha Round of free trade negotiations could boost global GDP between $165 billion and $283 billion per year.

So why do people, especially politicians, believe the opposite? The 19th century French economist Frederic Bastiat explained this sort of disheartening policy myopia his brilliant essay, "What is Seen and What is Not Seen." People tend to focus on the seen consequences of a policy, in this case, competition from trade eliminating some jobs at relatively inefficient companies.

But they miss the unseen benefits, such as new jobs that result from increased average productivity. Naturally, the people who lose their jobs are worried and angry, so they call their member of Congress to complain about "unfair" trade. Fearing that they may lose their jobs, the denizens of Capitol Hill seek to enact legislation to block imports or mandate "Buy American" to protect their complaining constituents against "unfair" trade. In politics, as in much of life, the squeaky wheels get oiled.

The seen result of this political dynamic is that a few workers get to keep their jobs while the unseen outcome is that more people are out of work than would otherwise have been. In addition, protectionist legislation makes other Americans worse off by forcing them to spend more because they are denied access to cheaper and better exports. Our politicians get it backwards: Trade creates jobs for Americans and everyone else.

Science Correspondent Ronald Bailey is author of Liberation Biology: The Scientific and Moral Case for the Biotech Revolution (Prometheus Books).

NEXT: First GOP Debate Thursday: Let the Media Marginalization Begin!

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  1. I agree with you about 99%, Ron, but reality is a little more flexible than you assume.

    Throughout the 19th century the US used tariffs to protect “infant industries.” At the turn of the 20th century, high tariff Germany easily trumped free trade Britain.

    There would be virtually no automobiles produced in America at all today if, back in the ’80s, RR hadn’t bullied the Japanese into establishing a voluntary quota system and also bullied them into building factories here, neither of which they would have done under a full free trade system.

    China and India perform similar stunts, using the lure of their huge home markets to extort favors from international companies that are never granted to small countries.

    I’ve read, though I don’t know for sure if it’s true, that if the US-Colombia free trade agreement goes through, many Colombian farmers will be ruined by competition from subsidized US farmers.

    Free trade or no free trade, it’s nice to be big.

    1. There would be virtually no automobiles produced in America at all today if, …

      The fact that GM and Chrysler recently went bankrupt indicates that perhaps we shouldn’t be making cars in America today.

      Also, Toyota makes plenty of cars in America today, but they’re a Japanese company. How’s that work?

    2. I did not weep when Zenith died.

    3. “it’s nice to be big.”

      Oh, if only that were true…

    4. … many Colombian farmers will be ruined by competition from subsidized US farmers.

      That sounds plausible. Of course, the people of Colombia would then enjoy the benefit of being indirectly subsidized by the US government. The farmers would compete in spite of the subsidies or move on to greener pastures other lines of work. All of this works to the betterment of the Colombian economy.

      1. I am a resident of Colombia, so tell me, how much yuca is produced in the US? How platano? How many kinds of tropical fruits?

        btw – potatoes here are about 25 cents a pound.

        What is expensive here is wheat flour, and just how much wheat is produced here? Nada.

        So how many teeny weenie little farmers get ruined here? Ninguno.

        Now maybe the big time rice farmers, but I don’t have the numbers on that.

        1. I cant say I feel too bad for agricultural ventures failing when they depend on growing non-native plants that require resources that aren’t available in the immediate vincinity of the selected transplant spot.

          HEY MAN, I wanna grow fucking watercress in fucking Death Valley, subsidize me! Like you have a choice, muwhahahahahahaha

          (Wanna grow rice? Pick a spot with sufficient water.)

        2. I don’t know if any yucca is produced commercially in the US, but it does grow wild in several states, including here in Oklahoma, despite some very cold Winters.
          But I doubt we could compete with Columbia if we tried to grow it commercially. Not without subsidies.

          1. Is there a market, here, for yucca?

            1. A small market for yucca in the US.

              Immigrants from central and south america and their descendants use it. Since we have Brazilian friends, my wife cooks yucca a few dozen times a year.

    5. There might be no UAW built cars. For which outcome I would shed no tears.

      If you think, though, that no cars would be built in America, despite the obvious advantage of reduced costs from shorter shipping distances, not having to worry about exchange rate fluctuations, and the political benefits of Toyota and Honda being able to say, hey, we’re creating ‘murcan jerbs, you’re not paying attention.

    6. Lots of infant industries that were protected die anyway. Somehow you only heard aboput the survivors.
      Anyway, you really think AMERICA has “infant industries” that need protection?

      Like what? The schoolgirl-panties-vending industry?

      1. Japan probably has that covered, anyway.

    7. Throughout the 19th century the US used tariffs to protect “infant industries.”

      That was just the propaganda line.

      The tariffs were actually a way for politically-connected fat cats to overcharge their customers without having to face foreign competition. They never protect “infant industries”, because “infant industries” don’t have the money to buy politicians.

      -jcr

    8. But as long as the US farmers are subsidised, it isn’t free trade.

      A lot of the problems produced by ‘free trade’ exist only because the trade is only partly free, and one side retains the greater share of protectionist policies.

  2. We should get a link to that study and send it to all of our Congressbeings. Then we’ll all act surprised and hurt when our Congressbeings completely ignore us.

    1. I would settle for a working link in Ron Bailey’s column. I don’t have a Reason admin account.

      1. You can google search the phrase ” Trade and Unemployment: What Do the Data Say?” and find a link with a downloadable pdf. It’s the first result.

        1. Sean: I didn’t link to the PDFs because they were not the final official versions, although, only a few changes have been made in the published paper. Query to readers: In the future, if a preliminary version is available should I go ahead and link to that as background?

          1. I believe that would be helpful, with perhaps just a disclaimer that the data is still in draft format, or something to that effect.

            1. When a more final revision is already available? Seems like someone asking here, and Ron answering is the easier solution.

  3. I would venture that the Chinese during the Tea and Opium era of Great Britain would disagree.

    But perhaps that’s the exception to the rule.

    1. China was completely closed. How was it good for them?

    2. In fact, it is an argument FOR having a more open system. China was completely closed off from free trade at that time and through mercantilist policies allowed a select few agents to sell the shit out of tea – but would allow no other trade. Had they allowed other trade England would not have had a reason to plunder their country militarily under the auspice of protecting their merchants – the ultimate “protectionism”.

  4. I reject your reality and substitute my own.

  5. Harry Reid (D-Nev.) declared, “I think we should do a lot more to stop shipping jobs overseas.”

    Then stop piling so many hiring costs on employers, you fecking tool!

  6. So…with huge unemployment numbers and huge trade deficits from the “free” trade deals who has actually benefited?

    Come on, this is beyond the merely illogical. Take China. Unlike us, they’re not stupid enough to import stuff from 9000 miles away that they could make in their own country. Ditto India. So, logically, this is being done at an overall loss to us. Oh, sure, there are free trade winners but more and more people are facing rising prices and stagnant or declining wages. Any jobs being created won’t even begin to replace the ones that are lost.

    Just like a liberal regulator, your answer to correct a bad idea is to propose an even worse one.

    1. Moar tarrifs please.

    2. Unlike us, they’re not stupid enough to import stuff from 9000 miles away that they could make in their own country. Ditto India.

      Jebus, have you never heard the phrase “comparative advantage”?

      They actually DO import stuff from overseas into China and India, because some of even the most braindead autocrats on the planet understand that trade benefits them.

    3. In the 17 years since NAFTA came into effect, unemployment has averaged 5.7%. In the 17 years before NAFTA came into effect, the average was 7.0%.

      Also, “logic” has nothing to do with how much we import or export. Economies belong to a very complex class of problem. No computer model can tell us what the “correct” level of imports and exports is. The market itself is much better at determining what is or is not efficient than any supercomputer or armchair economist.

      1. And NAFTA is not a true free trade agreement. A good free trade agreement would be very short.

        Things like NAFTA are thousands of pages long and have all kinds of exceptions and exemptions to keep many trade barriers in place.

      2. But, is the unemployment calculation the same? It morphs frequently for political davantage.

    4. Show me a favorable balance of trade, I’ll show you a recession.

      1. Yup. Trade deficit is still 40% below that of the September 2008 market crash.

        1. *that is, 40% below where it was before the market crash.

    5. If you are an American and your job entails doing something a Chinese rice farmer can do as well at a lower cost….you’re fucked!

      1. Sadly. Then again, is it THAT hard to be more skilled than a Chinese rice farmer (Ancient Chinese Secrets aside)?

        1. , is it THAT hard to be more skilled than a Chinese rice farmer

          It’s not that it’s hard, it’s that a lot of Americans can’t be bothered to put in the effort.

          -jcr

          1. As a Lazy, Slightly-Overweight, American, I have to say I’m disappointed.

            (Back to teaching myself calculus so I can get this electrostatic attraction java app working right….)

          2. Exactly

            1. I knew i was a racist.

          3. I believe that we are still the world’s largest producer of rice or something like that (producer, exporter?)

    6. Europe, Canada, and the US have a higher standard of living than Africa, South America and Southern Asia. Therefore, more northern latitudes are the cause of proserity.

      See, I can play the non causa pro causa game, too!

      1. Actually, don’t latitudes further from the equator (geological variations aside) have more access to ground water?

        1. Scientific American had a big article on the relationship between climate and developement some years ago.
          It’s been a long time since I’ve read it, but if I remember correctly, the authors felt the biggest advantages to temperate climates were a more stable rain/drought cycle and fewer pests and diseases (for both people and agriculture).

          1. Well, if i’m going to trust anyone on the possible values of ScumIam……..

            Nope. They lost it.

            When pia.org stopped posting monthly pudates, i gave up on our human advancement.

            It’s all downhill now. No bacon, you’ll be lucky to get backfat. available here, just barely.

            SciAm licks more Dicks than my 2 dogs….

            Still not very hopeful for the future.

          2. Although I did not mention it (and perhaps I should have), the researchers did take distance from the equator into account in their regressions.

      2. “Water is Life” and other bad Dune paraphrases.

  7. If you want free trade you’re going to have to overcome some perceptions about it:

    The fair price of labor is at a wage below a lifestyle most Americans accept. In other words, shirts and shoes can’t be produced in America, because the market for shirts and shoes won’t accept a price at what the cost of labor is in America. Only unskilled third-world laborers who are fine with demanding very low wages will find that acceptable.

    Production of low-value goods is only feasible in third-world countries. That leaves a large segment of our unskilled labor unable to find demand for their labor.

    Production is moved to circumvent enviornmental restrictions. Workers in third-world countries are exposed to hazardous and dangerous conditions of employment which shorten their lives and hurt the local ecosystem (ex. chemicals dumped into rivers, sulfur emissions, local drinking water polluted).

    Goods and services are not traded for each other, but instead foreigners sell us goods and services in exchange for our assets. Future national production is siphoned off to foreign lands as rents. This one is easily debunkable as only the stupidest of investors would buy an asset they considered to be unproductive. This is actually a positive sign as domestic economic prospects are viewed favorably.

    1. Outsourcing pollution to model command economies such as China is a bad thing? Explain.

  8. The reason we are kicking your ass is cos’ big government bank give us money, we keep currency artifical low. We call it Chairman Mao’s Opaque hand. You American’s sacrifice yourself on altar of ideology, we make profit off it.

    1. What? The banks just give you money? Like out of a helicopter? Call Ben Bernanke! We have the answer to all of our economic problems!
      /sarcasm

      The US government has, for years, been busy devaluing the currency. Since 2004, the dollar has dropped more than 20% against the Chinese Yuan. By what mechanism do you believe that the Chinese are “undervaluing” their currency? Providing convertibility at an artificial rate? Why, in your opinion, would such a plan not be squelched by Gresham’s law?

      1. Oh there you American go. You think you by cheaper product cos’ Adam Smith say so, but you buy cheaper products cos’ Chairman Mao say so.

        1. but you buy cheaper products cos’ Chairman Mao say so.

          Sort of, yeah. I mean it is China that’s depressing real wages and debasing their own currency at the benefit of the rest of the world. You’re subsidizing an export industry whose profits will inevitably be obliterated by the domestic inflation that results from both a continuous outflow of goods and services and the debasement which the Communist Party deifies.

      2. Why, in your opinion, would such a plan not be squelched by Gresham’s law?

        Gresham’s law would come into play if they established a fixed exchange rate between the yuan and the dollar and then started inflating, not allowing the exchange rate to reflect the new prevailing market conditions.

        As of right now, I believe that the Chinese government is manipulating currency markets by printing yuan and then purchasing USD, making our money appreciate and theirs depreciate.

        1. But our currency is not appreciating versus the Yuan. China has been able to slow down the depreciation of the Dollar vs. the Yuan over the past decade, but not stop it. We’re printing dollars too fast.

        2. Also, if they deflated their currency — just tossed it into ovens — you would also see Gresham’s law. The mismatch between the market rate and the official rate would just allow traders to take advantage.

          I don’t deny that China has manipulated their currency in the past, but what they have been doing is not devaluing their currency. They have been pegging their currency to the dollar. This was not true July 2005-July 2008, and it has not been true since June 2010, but that has been the overall goal of their policy. Our latest printing spree, however, has convinced them to allow their currency to further appreciate against ours so that we don’t export our inflation to China.

          1. Also, if they deflated their currency — just tossed it into ovens — you would also see Gresham’s law. The mismatch between the market rate and the official rate would just allow traders to take advantage.

            That holds true if there’s a fixed exchange rate and traders can take advantage of arbitrage opportunities. I’m speaking purely from memory here, but I don’t think that the conditions necessary for Gresham’s law (an artificially overvalued currency pushing an artificially undervalued currency out of the market) are present. As of now China is just playing with the floating exchange rate, and this practice is much more common on currency markets than people realize. One of the reasons that central banks keep reserves of other major currencies is so they can release them onto the market if they fear that their own currency is depreciating too rapidly.

            I don’t deny that China has manipulated their currency in the past, but what they have been doing is not devaluing their currency. They have been pegging their currency to the dollar.

            China de-pegged the yuan on July 21, 2005. Now they operate under a floating exchange rate which is heavily manipulated and supervised by the People’s Bank of China. Now what we really get into is a debate of semantics, i.e. what is and is not currency devaluation. I consider market intervention for the purpose of weakening a currency or preventing its assent as a form of devaluation, since you are decreasing the “value” the currency would’ve held or did hold absent government interference. I’d be interested to hear your thoughts on this.

            Thank you for the Google currency market link, by the way.

            …we don’t export our inflation to China.

            I can see this happening with a pegged currency, since the value of one money moves in the same direction as the value of another (the Hong Kong dollar has been experiencing depreciation since it’s pegged to the United States dollar). Would you mind explaining or posting a link?

            1. The Chinese Yuan, even though it’s not officially pegged to the US currency, had an effective peg to the US dollar from July 2008 until June 2010. What I mean is that their monetary policy kept the floating exchange rate almost constant. As we printed dollars, they would buy them up or print Yuan in response.

              So, with this de facto albeit not de jure peg, if we inflate our currency, China either has to join in by inflating theirs or allow the dollar to depreciate against the Yuan.

              1. Ah, I see what you mean. To keep the exchange rate constant in face of America’s own monetary expansion they’d have to take greater cuts at their own standard of living by depreciating their currency further. I have to believe the Communists know how better-off their citizens would be if they let their currency become more powerful, but I suppose the ruling elite has that much of a vested interest in propping up firms focused on exportation.

    2. You’re actually making your population progressively poorer by debasing your currency, and giving the rest of the world a subsidy as a result. I guess that “profit”, in some sense.

      1. Our economy stronger than you, Our economy will be bigger than you. Before you know China build factory in America to make cheap plastic shit we Chinese give to our children to play with.

        1. And then you’d be importing more from America than you exported to them.

          AMERICA WINS!

          (moron)

          1. I know there’s no explicit mention of rape in this post, but I suspect this sock puppet knows Steve Smith.

    3. Actually, you make the profit, but we enjoy the goods and services produced. So it kind of evens out. What’s the point in making a profit if you can’t buy much with it?

      1. You enjoy cos’ Chinese government intervene. Don’t kiss Ayn Rand ass, kiss Deng ass.

        1. You enjoy cos’ Chinese government intervene. Don’t kiss Ayn Rand ass, kiss Deng ass.

          If the screen name said “The Truth” then this would be the most brilliant satire ever written.

        2. We thank you for all the cheap plastic crap. Please continue subsidizing it, so we can continue to enjoy absurdly underpriced consumer goods.

  9. What we need is for someone to come up with a simple graphic game that allows the reader to do a math problem and compute the effect of comparative advantage for themselves. Maybe something that’s done up as a miniature version of “Tradewinds” or something.

    1. Hazel Meade: May I recommend Matt Ridley’s excellent TED talk on YouTube — see around 5 minutes in for a good graphic description of how comparative advantage works.

      1. Thanks for the link. I read his book on your recommend, loved it and tried to promote it. Unfortunately, most people become bored with stuff like that (huge ??? for me). The video presentation is a great idea. I think most humans really are chimps in disguise.

  10. Has anyone done a similar study exploring the relationship between trade openness and domestic purchasing power? Getting cheap goods from china no doubt ensures that people can buy more for less but I could also see trade tending to drive down wages so it would be interesting to see which effect wins out.

    1. Don Boudreaux referenced such studies in his appearance on the Econtalk podcast with Russ Roberts. Almost every study indicates that wage increases are enjoyed across the board. The most protectionist studies suggest that high school dropouts may experience a 2-3% drop in wages, while wages rise for everyone else. This suggests that purchasing power increases across the board or close to it.

      There are also lots of good links and resources on the page below the podcast link.

      1. High-school drop-out is kinda the wrong dichotomy. Many drop-outs are not-necessarily under educated and many times can prove to be top wage earners. I am not so sure it is such a norm. I think it is biased by the assumption that you must be retarded to not finish basic schooling.

        1. Disclosure: split infinitive is sign of a non-dropout’s (moi) propensity to go loose with language. Unintentionally.

  11. A month ago I started reading “Snow Crash”. I stopped after the first chapter….as it was obvious the author had no idea what “comparative advantage” meant and my palm was completely glued to my face at that point.

    1. my palm was completely glued to my face at that point.

      I think that’s technically a type of welding.

    2. Yeah…that’s why…

  12. omg: You probably know this story already: Nobel laureate Paul Samuelson (1969) was once challenged by the mathematician Stanislaw Ulam to “name me one proposition in all of the social sciences which is both true and non-trivial.” It was several years later than he thought of the correct response: comparative advantage. “That it is logically true need not be argued before a mathematician; that is is not trivial is attested by the thousands of important and intelligent men who have never been able to grasp the doctrine for themselves or to believe it after it was explained to them.”

  13. Trade openness is generally measured by adding together the value of both exports and imports and dividing that sum by total gross domestic product (GDP).

    By that calculation my household — which consumes absolutely nothing that it produces — has a trade openness of 200%!

    I loves me some macro computations.

    1. What is your unemployment rate?

      Do you have 2.5 children?

      1. Wait, this sounds fun. As an employed single person, how do I calculate my unemployment rate? (the math is pretty intuitive for people who have kids or at least a spouse who doesn’t work.)

        1. 0 persons unemployed / 1 persons who would like to be employed = 0%.

          What’s really interesting of course is what portion of your output is consumed by someone in a different country. The higher that number is, the more important you are to the economy because the lower you make the trade deficit.

          You can also figure out what portion of your output is consumed by someone with a different eye color. The higher that number is, the more important you are to the economy because the lower you make the trade deficit of people with your eye color.

          1. what if “persons who would like to be employed” = 0 too? I’m not that far in my calculus book.

            1. is it just my browser, or are 0 and o indistinguishable in this font?

              1. I’m seeing them slightly (ever so slightly) different.

                1. “Gay” “O”‘s and “0”‘s don’t count.

  14. Fuck the economists and fuck their fucking numbers. They can shove them up their fucking asses.

    Free trade isn’t about numbers, duh – it’s a moral issue, about being, duh – free.

    It’s my money and I could spend it where I fucking like, except for fucking ‘Free Trade Agreements’ which are nothing more than ‘lets’ make a deal’ between governments.

    1. I’m not sure if this a troll/sock puppet, but I’ll bite.

      Fuck the economists and fuck their fucking numbers. They can shove them up their fucking asses.

      The economists in this article were actually agreeing with you, that free trade is good.

      Free trade isn’t about numbers, duh – it’s a moral issue, about being, duh – free.

      Are you so sure that it’s moral? I don’t know about other people on here, but I’m by no means a natural rights libertarian. I’m a libertarian simply because a free society would provide me with the highest standard of living possible; that it also happens to benefit every other member of the human race is happy coincidence.

      It’s my money and I could spend it where I fucking like, except for fucking ‘Free Trade Agreements’ which are nothing more than ‘lets’ make a deal’ between governments.

      It would be nice if the United States unilaterally abolished all tariff and import/export controls, but we don’t live in a very nice world. Free trade agreements are the best we’ve got, i.e. half a loaf of bread as opposed to the full loaf.

      1. I’m a libertarian simply because a free society would provide me with the highest standard of living possible; that it also happens to benefit every other member of the human race is happy coincidence.

        You’re assuming Greed is Amoral. Personally, I think Personal Greed is very moral and appropriate to liberty.

        Now, Organized Group Greed, that’s a whole different animal.

        1. Greed is not amoral it’s immoral. It is the drive for the unearned and the unnecessary at the cost of any and all other values. If you wish liberty for the express purpose of theft and fraud then and only then will your premise be accurate.

          1. Damn, I must’ve dropped out of school before they covered the difference between amoral/immoral.

            “unearned”, nice. So after my lifetime of contributing to pay for the family property, I clearly haven’t earned shit. Good to know.

            1. Amoral asserts that it’s morally neutral.

              If you’ve done it honestly, you have earned it. Why get so defensive? If you did it by lying, cheating and stealing then you have not, indeed, earned shit. Period. If you have no morals or values except a pile of paper and metal than, really, what do you have?

              1. Amoral asserts that it’s morally neutral.

                In an ideal world, yes. As it is, anything that isn’t +X = -X

                there is no |x| in reality, since everyone imposes a direction on that magnitude. Of course, they’re wrong for having their own thoughts on the matter, and should be summarily executed for the benefit of a stable and productive society.

                I volunteer myself for the 1st Imperial Execution.

                Choice is Slavery.

                1. Send me your address, I’ll be right over.

                  Of course, it’s an either/or with you. Everyone is supposed to respect your rights but as soon as it becomes a question of you respecting the rights of another it’s “slavery”. Whatever happened to objective values? No wonder Randroids think libertarians are a bunch of dingbats!

          2. I think there are two types of greed: eugreed and disgred, for the earned and unearned, respectively.

            1. Fair enough, but i think there are two different types of greed two, and they don’t involve where the dirty money came from….OMG TERRORISM!!!!!

              1. (TERROSIM!!!!!!!!!, so who needs to think straight? Ever? Defeats the purpose, huh? Like i need rational thought to run a business in this country.)

                SAND NIJERS DEAD, YOU MORANS

                _get T-shrits here… (that’s the whole point right?)

            2. (all this demonstrated Evil Capitalist Greed Aside…..did you actually have a point that focused on someting evil? Or just talking bout catholic priests? Keep up the good religous work people. meanwhile, i want to starta new relious movement that involve building pinball machines as a way to resist the Fed.

              1. Pinball Wizardry.

      2. For every economist who likes free trade I can find you two who don’t.

        What I was attacking was the concept that we are even talking about ‘free trade’ here.

        Of course it is a moral argument. Think about the consequences if it is just about numbers and the other economists have more followers.

        1. Of course it is a moral argument

          That should be the key signal that Laws and Regulation are not the solution.

          Once an argument is moral in nature, the moral component becomes arbitrary. Instead of allowing anyone to make their own arbitrary decisions, we have a beneficent Overlord Structure that dictates the decisions of the proeletariat. WOOOOOOO, steal those engines of produce, because you rubes oughtta be able to managge the company your selves. Right? RIGHT>?!?!???!

          1. (as i understand “morals” that other people use as their standard.)

  15. Thank you, Ron. This is such a simple yet fundamental economic concept that is so difficult to get people to understand. Free trade makes EVERYONE better off. Correlated, the same people who don’t understand free trade cannot fathom creative destruction. They only think everything must be good or it is all bad.

    1. Free trade makes EVERYONE better off.

      LIES LIES LIES!!!!!! How else can I maintain my Camel Ride business, huh, Smart Guy?!?!

      (if your sarcasmometer didn’t explode there, than it is defective.)

      1. Stupid made in America (with tax dollarz*!!!) sarcastometers.

        *I luvz me some public skoolz! (Even though I went to them…)

        1. Please to be sharing how your sarcasmometer works?!

  16. I don’t understand the example of using Harry Reid about outsourcing. Sure, free trade creates jobs. But what does this have to do with the fact that companies are finding labor that’s as talented and cheaper than here in the U.S.?

    I don’t see how “free trade” helps boost jobs in the U.S. if the working class are becoming less skilled than other parts of the world, if corporate taxes are higher than other parts of the world, and if healthcare costs are higher than other parts of the world?

    Solve these issues, and I think you’ll see a much larger increase in jobs for Americans than altering our trade policy?

    1. I can’t figure out what to prove wrong first. Where’s RC when I need him.

    2. I don’t see how “free trade” helps boost jobs in the U.S. if the working class are becoming less skilled than other parts of the world, if corporate taxes are higher than other parts of the world, and if healthcare costs are higher than other parts of the world?

      1. free trade creates more oppotunities
      2. if the working classes are becoming less and less skilled…that sounds like their problem. In the 15 years since I dropped out of public education, i’ve learned more skills than even a Mexican can boast.

      I can do everything a mexican can do, with fewer difficulties and better quality of work.

      And If I lost my job tomorrow, I could find a new gig in 1-2 weeks tops, even if I had to move to deep sea fishing. Pretty sure i can find work in just about any industry though, because i take 15mins out of every hour to actually think/apply my “knowledge”. (knowledge = IP that I stole from a bunch of wormfoodmofos.)

    3. The Law of Comparative Advantage truly involves first individual trade between two humans and it can be used in a larger sense to apply to global inter-country trade.

      To answer your question which applies to the latter, you are assuming some sort of birthright of slackerdom if you live in some particular place.

      Yes, that might seem frightening to some, but for the bulk of the truly working men and women, it means better allocation of labor and more net worth for all that is allocated by endeavor and not by some false equality created by some rent-seeking know-it-all that really knows nothing.

      Prosperity for all: it’s what we’re all about here at this site. Why are you against that?

      1. you are assuming some sort of birthright of slackerdom if you live in some particular place.

        Yes, I’m assuming that ANYONE can slack-out of The Program and divert their resources elsewhere.

        OMFG, WHAT ABOUT The Controls!!!!!!!!!

        If you don’t understand by now that someone can pull an OMGOBamaVictory moment whenever they want…..then, i dunno, BUSHPIGHITLERSWINEFORTHEDEATH!!!!!!!

  17. Jesus christ look at all those containers on that ship. Glad I got promoted to supervisor so I don’t have to unload those fuckin’ things anymore.

    1. Why do you hate tetris?

      1. It’s unloading so it’s more like jenga.

  18. Unloading container shipping is more difficult than unloading non-container shipping? I actually thought it was a great innovation. How not so? Explain.

    1. Dude, the pirates of Penache have to spend at least an extra two hours clearing out all the beef-murdering-burger-slurping…meh, that’s all the bullshit i can manage. Anyone need help slaughtering livestock?

  19. Man of constant sorrow, ftw. Looking in any direction that doesn’t include rockin music is counterproductive….i give up.

  20. re: China capitalist, Mr. Bailey’s point is proven quite succinctly when you compare the situation of the average chinese person to the average american – china’s lack of openness is directly responsible for the fact that chinese people pay a far, far higher % of income on basics like food and housing than we do in america (subsidies to both in either economy being accounted for). china capitalist mentions that we will be building the cheap plastic crap for their kids to play with? not likely, when they spend something like 30% of income on food while we spend about 6% (ballparking due to laziness in looking up numbers). but food in shanghai costs roughly equal to food in nyc (at the cash register cost is equal, quality vastly better in nyc) – compare the average wages in the two and i think i’m probably close. they also cannot afford to transport goods (food or cheap plastic crap, times when the two are synonymous notwithstanding) around the country for their citizens to buy, because there are far fewer freight train lines than in the west and the costs of trucking are astronomical (but hey! they’ve got those awesome high speed passenger rail lines! ignore the fact that they’ll be crumbling in five years and that the former trains minister is probably going to be executed because an estimated 60% of the cost of building them was embezzled – seriously, we should do the same thing in america, right???) the chinese may have huge exports, but their controls on imports so distort the market inside china that basic (chinese-made) goods that we can purchase at walmart for pennies are often several times as expensive here. the people here just don’t realize how good we have it in the (relatively) freer trade economies of the west. when they do… hoo boy. i wouldn’t want to be a party stooge then.

  21. Nations bankrupting themselves through war as happened a lot though, yet the majority of people would rather have more war and less trade.

  22. If, as the liberals tell it, A) nothing is made in America anymore, and B) imports crater your economy … then wouldn’t C) be that you want to be America right now? I mean, if we make nothing, and live in this hell hole, how are we going to import anything from China? Seems to me China just got itself into a hell of a catch-22. All it does is export, and it will shortly have no markets to which to export.

  23. I like the story of the man who found a way to turn wood into steel, and was praised as a scientific genius, but then a reporter wanted to find out about the process, and it turned out the factory was just an enclosed, hidden, shipping bay where he would ship and sell wood in exchange for steel coming in, and was then instead condemned by the queen for breaking his country’s laws and destryoing jobs

  24. Stossel did a really good job of showing this in Hong Kong.

    http://www.intellectualtakeout…..evelopment

  25. Massive unemployment wouldn’t be so bad if food can be synthesized without agriculture, if fusion energy was ultra-inexpensive, if nano-materials enabled cheap megaplex housing and custodial functions like incarceration and elder care were handled by tele-operated/autonomous robots.

  26. No nation was ever able to auction off half of its citzen’s jobs to the lowest foreign bidder before either.

  27. Ben Franklin was a statist

  28. Article has two very serious shortcomings.
    1. It does not mention the high import tariffs that protected our industries for so long and comment on the effect of that.

    2. It sums import and exports and compares that to GDP and says the higher the total of exports and imports is then the better for the job market.
    Greater trade is good if the imports equal the exports. That is not the situation we are in.
    A first step to correcting the problem is to produce a larger portion of our energy needs. A barrel of oil produced in the U.S mean $100 to go to: jobs to find it; state royalties (to support the state’s budget); jobs to produce it; income taxes on the workers to support state and federal budgets; profits that are taxed by the government to support state and federal budgets; money left over is spent here to find more oil — A barrel of imported oil just sends $100 to some guy in the middle east that does not like us.

  29. Free trade can be good. If both sides practice it. However, most of the countries we trade with do not practice free trade. China and Mexico are quite protectionist, yet no one says a dang thing. Unless both sides are playing by the same rules, it’s a colossal ass raping for the free trade nation.

    We need to drop free trade with any country who refuses to practice free trade itself.

  30. Free trade is morally superior to protectionism because it places trust in what Adam Smith called “the natural system of liberty” rather than in a man-centered system of centralized industrial policy. And by doing so it allows citizens to fulfill their creative and productive potential.

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