Some evolving (basic) thoughts on free trade after reading a bit & talking to some experts a.k.a. "learning in public"):
There's a growing argument that free trade served U.S. foreign policy interests more so than it did its economic interests
Here are the counter arguments:👇
There's a growing argument that free trade served U.S. foreign policy interests more so than it did its economic interests
Here are the counter arguments:👇
1st, the argument:
A/ US was protectionist until WW2
B/ Agreements post-WW2 sacrificed economics for security
C/ Post Cold War it's worth renegotiating those unilateral trade agreements
Others argue it's more abt diff values (nationalism vs globalism)
A/ US was protectionist until WW2
B/ Agreements post-WW2 sacrificed economics for security
C/ Post Cold War it's worth renegotiating those unilateral trade agreements
Others argue it's more abt diff values (nationalism vs globalism)
Economists have been unanimous on their support for free trade.
Drawbacks of protectionist policy (e.g. tariffs):
1/ Goods and services cost more
2/ Inputs into good & services cost more, making export industries less competitive and hurting jobs & wages in those industries.
Drawbacks of protectionist policy (e.g. tariffs):
1/ Goods and services cost more
2/ Inputs into good & services cost more, making export industries less competitive and hurting jobs & wages in those industries.
3/ Other countries retaliate and put trade barriers which damage export industries, and hurt jobs & wages in those industries
The economy becomes smaller w/ more expensive goods & services and lower jobs & wages.
The economy becomes smaller w/ more expensive goods & services and lower jobs & wages.
Trade barriers are particularly costly to lower income folks, because barriers affect goods more than services, and lower income folks spend higher % of income on goods.
What about the argument that Apple & working class Americans are somewhat misaligned?
What about the argument that Apple & working class Americans are somewhat misaligned?
It’s worth taking more expansive view on what Apple is. Apple is employees & investors, but it’s also an entire ecosystem of goods & services around its products, most of which it doesn’t own.
It’s the productivity benefits its customers get, millions of them small businesses.
It’s the productivity benefits its customers get, millions of them small businesses.
It's the second & third order economic growth & job creation in the communities in which it operates.
It's the training that it gives its employees and members of its ecosystem which grow human capital.
It’s the education & entertainment people get from the products themselves.
It's the training that it gives its employees and members of its ecosystem which grow human capital.
It’s the education & entertainment people get from the products themselves.
Best argument *against* free trade?
There are many ppl in the US who aren't capable of adapting to a post-manufacturing employment world.
And so the choices are UBI or protectionism, & latter is better because it's better to have ppl working than getting paid to do nothing.
There are many ppl in the US who aren't capable of adapting to a post-manufacturing employment world.
And so the choices are UBI or protectionism, & latter is better because it's better to have ppl working than getting paid to do nothing.
What about security?
Well, the more economically intertwined we all are, the less likely war is.
"The best hedge against civilizational collapse is civilizational advancement, and entanglement."
Coronavirus, however, could present unique challenges to this theory.
Well, the more economically intertwined we all are, the less likely war is.
"The best hedge against civilizational collapse is civilizational advancement, and entanglement."
Coronavirus, however, could present unique challenges to this theory.
What about China?
They're bad actors in this arena.
They're also likely growing in spite of their policies not b/c of them.
They are fostering domestic job growth at the expense of the quality of living for their citizens.
For them, that's a tradeoff they seem to be OK with.
They're bad actors in this arena.
They're also likely growing in spite of their policies not b/c of them.
They are fostering domestic job growth at the expense of the quality of living for their citizens.
For them, that's a tradeoff they seem to be OK with.
Trade was also a huge debate in the 1980s/1990s as well, except then, instead of vs China, it was Japan, & later Korea.
"Competitiveness" was the reason of the time for this topic, the idea being that we need to "compete & win" vs Japan or they would "compete & win" vs the U.S.
"Competitiveness" was the reason of the time for this topic, the idea being that we need to "compete & win" vs Japan or they would "compete & win" vs the U.S.
When people attack trade, what they are really unhappy with is the shifting composition of the underlying economy
+ they can't hold it back, since that's the result of actual technological progress resulting in shifting consumer wants & needs
And so they go after the foreigners
+ they can't hold it back, since that's the result of actual technological progress resulting in shifting consumer wants & needs
And so they go after the foreigners
People use trade as a tool to solve other problems, and those solutions end up making things worse.
And so using international trade to try to address systemic issues around the middle class is unlikely to work *even if* it is a logically sound thing to do
And so using international trade to try to address systemic issues around the middle class is unlikely to work *even if* it is a logically sound thing to do
Talks & readings that educated me, in addition to conversations w/ smart friends:
spreaker.com/user/11959465/…
spreaker.com/user/11959465/…
piie.com/experts/peters…
bastiat.org/en/twisatwins.…
nationalreview.com/magazine/2019/…
hoover.org/research/case-…
medium.com/conversations-…
spreaker.com/user/11959465/…
spreaker.com/user/11959465/…
piie.com/experts/peters…
bastiat.org/en/twisatwins.…
nationalreview.com/magazine/2019/…
hoover.org/research/case-…
medium.com/conversations-…
