Posts Tagged ‘fair trade’

The Lie of Free Trade

Posted by Troy on 28th January 2017 in Current Events, Political

Trump talks about free trade and fair trade.

All the conservative pundits talk about free trade as some sort of holy attainment.

Now I’m about to bring the truth.

There is no such thing as fair trade.

What do I mean by that?  Well, first of all, each country has different resources and cultures.  Some are going to be better positioned than others.  For instance, when Adam Smith wrote the Wealth of Nations, he spoke about China and how poorly developed it was compared to European countries.  The main cause for this was the governmental, institutional, and cultural powers that existed at the time.  He remarked how China’s economy had remained virtually stagnant for centuries and would probably continue as such until such time as the features changed and allowed China to expand.  As such, one country will be more powerful and will have greater trading power than another.  America is this country.  As the most industrious and wealthy country on the planet, it controls much in regards to trade.

All that aside, what do these free-trade puritans mean?

Ahem.  Well, by free-trade, what we mean is that there should be no artificial barriers to trade between countries.  More or less, we are against boycotts, banned goods, and tariffs.

Oh.  Well, that’s good… but what about the minimum wage?

Pardon?

You know.  The minimum wage, OSHA, the EPA, regulations, standards, and so on and so on and so on.

I’m sorry…I really don’t follow.

Well, you want America to have free trade with China.  What do we have in America?  We have minimum wage laws.  China doesn’t [at least, not to the extent that we do].  China manipulates their currency.  China dumps coal pollution all over the place.  China doesn’t care about worker safety.  China doesn’t care if their products are made with toxic materials.  Given this, China is sure to make a product at less cost than an American product.  So how is this free-trade?  By declaring free-trade in an environment where two countries have vastly different economic environments, one will be the winner and the other will be the loser.  In this case, America will be the loser.  And even if the American product somehow survives, Congress will pass a law making the American product illegal, forcing people to buy the Chinese product, but forbid American companies from making the Chinese product because it is too toxic.  [Seriously, this is EXACTLY what happened when Congress made the freakin' incandescent bulb illegal].

Now, if you wanted to remove all the barriers in America and do away with the minimum wage and other such things and let the market decide how much a job pays; let the market decide how much pollution that a company can get away with before the citizens say “enough;” then I can go along with this; but you don’t want to do that.  Little known fact, Switzerland doesn’t have a minimum wage, but they have a very high standard of living.

Here’s an idea for free-trade/fair-trade that levels the playing field.  Why don’t we set tariffs based on the country?  For instance, Canada and the United States are very similar, so we will trade freely with them.  But why don’t we have standards that say “You have to have a reasonable minimum wage, or we will hit you with a 3% tariff.  If you produce more than x tons of carbon emissions per 100,000 citizens, we hit you with a 4% tariff.  This would actually make for fairer trade while also promoting our values.

Right now, the concept of free-trade is a globalist ideal.  The current set up favors a “spread the wealth” mentality as it outsources the production of more developed countries into less developed countries.  The side-effects of this is that it enforces the welfare state.  As these manufacturing jobs are lost, we will get cheaper goods.  Yey!  I can buy a pillow for $2 less.  Whoop dee doo.  The stockholders of the corporations get richer.  Of course, there are more unemployed and under-employed.  So you have to have a high tax on the corporate shareholders and redistribute the wealth so that pillow labor that you put out of work will have enough cash to buy that pillow for $2 less from China that will give him cancer because they used lead dust to clean the feathers.  Yey!

Long Live the Constitution!