NYT Op-Ed - Second Thoughts On Free Trade

[Dover]

Op-Ed Contributor: Second Thoughts on Free Trade

January 6, 2004
By CHARLES SCHUMER and PAUL CRAIG ROBERTS

The original case for free trade, made two centuries ago,
looks a bit weaker in the face of the modern global
economy.

http://www.nytimes.com/2004/01/06/opinion/06SCHU.html?ex=1074425957&ei=1&en=b02157a47ef8353b

Excerpt:

....new political stability is allowing capital and technology to flow far more freely around the world. Second, strong educational systems are producing tens of millions of intelligent, motivated workers in the developing world, particularly in India and China, who are as capable as the most highly educated workers in the developed world but available to work at a tiny fraction of the cost. Last, inexpensive, high-bandwidth communications make it feasible for large work forces to be located and effectively managed anywhere.

We are concerned that the United States may be entering a new economic era in which American workers will face direct global competition at almost every job level — from the machinist to the software engineer to the Wall Street analyst. Any worker whose job does not require daily face-to-face interaction is now in jeopardy of being replaced by a lower-paid, equally skilled worker thousands of miles away. American jobs are being lost not to competition from foreign companies, but to multinational corporations, often with American roots, that are cutting costs by shifting operations to low-wage countries.

Most economists want to view these changes through the classic prism of "free trade," and they label any challenge as protectionism. But these new developments call into question some of the key assumptions supporting the doctrine of free trade.

The case for free trade is based on the British economist David Ricardo's principle of "comparative advantage" — the idea that each nation should specialize in what it does best and trade with others for other needs. If each country focused on its comparative advantage, productivity would be highest and every nation would share part of a bigger global economic pie.

However, when Ricardo said that free trade would produce shared gains for all nations, he assumed that the resources used to produce goods — what he called the "factors of production" — would not be easily moved over international borders. Comparative advantage is undermined if the factors of production can relocate to wherever they are most productive: in today's case, to a relatively few countries with abundant cheap labor. In this situation, there are no longer shared gains — some countries win and others lose...cont'd

[dkf]

1. Thank goodness!

Finally they are beginning to get it.

I was wondering how long it would take.

[LibertyorDeath]

2. Second Thoughts On Free Trade.... LOL...No shit...

The race to the bottom isn't so appealing after all.

imbeciles every last IMF world bank greed loving profit before people mother fu%$ing one of them.

[Dover]

3. There ARE no more countries or borders, only corporations

so of course the motives and rules have changed regarding trade!

Don't you know the owners of GE, Microsoft, etc. consider themselves Kings or presidents?...Their companies have more money than many countries, so they figure they SHOULD be in charge.
And corporations are not democracies.

Okay, we're not QUITE that far along, but VERY close and corporations are trying really hard to BE countries or "nations" of power while co-opting existing countries' resources, governments, taxes and cheap labor to pay for it. No wonder Bushco thinks they should live by their OWN rules and laws.