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Milton Friedman advocated the Efficient Market Theorem and basically all the country's that use English as their Primary Language followed his lead. Especially Britain and the United States. Japan Trade Minister had a saying, for Japan to prosper, we must do the opposite of what the western economist tell us to do. We live in a world of half free trade and half neo-mercantilist. The neo-mercantilist are winning because they have governments that are promoting industry and picking winners and loser's. Are country doesn't believe in doing that. Asian country's believe in setting 5 year economic and industrial initiatives to stimulate growth in key areas. The united states believes in "open markets." Right Wingers will point to China and say "look, after they decentralized their economy, they prospered." The truth is that China does a lot of central planning still, as does, Korea, and Japan, and Taiwan, and Germany, and Finland, and Norway, and Sweden, and just about every other non-English speaking country.
Right Wingers think that the government needs to be destroyed so they can operate freely. The US ended up giving away technology and open markets for geo-political gains without getting any type of reciprocal deal. United States Business's have asked for help to keep competitive in the United States while being pressured from international Competition in Korea, Singapore, and especially China. The US response has been "Well, have you thought about moving your business to Singapore." This orthodoxy of open markets is killing the US while countries like China are practicing currency manipulation and unfair trade practices that are prohibited in the WTO agreements. Yet, to continue to operate bases and supply are allies in the far east, our government turns a blind eye for political and militaristic favors.
Just recently China has begun on their new industrial plan which they will try to enter the markets of higher technology items such as autos, automobile parts, aeronautics, biotechnology, and several other industries that the US has long considered to have quasi monopolistic power over. In order to score points with China and allow the US to send defensive armaments to Taiwan without China raising a fuss, the US sent Aeronautical Engineers and aeronautical technology to China.
In the 1960's the biggest industry in the united states was the Automobile industry. The average worker in that industry, adjusted for 2010 dollars, made about $60,000 a year when you include benefits. Today the biggest industry is retail dominated by Wall-Mart, where the average worker makes $18,000 per year and doesn't receive any benefits.
This isn't just a Republican vs. Democrat problem either, because both parties believe in the same fundamental Efficient Market Theorem. For the last 30 years every president as pushed for and sold the idea of increasing the number of free trade agreements. Ronald Reagan, George H.W. Bush, Bill Clinton, George W. Bush, and Barack Obama have sold the American people this idea fixing the economy is as simple as increasing Free Trade. They are all wrong!
We have a serious problem in the United States, and we will continue to loose our place in the world if we don't address the fundamental problems plaguing our society. We wont' have the money to fund these social nets if we keep allowing industry to leave the shores of the United States. We need to learn the lessons that the British taught us and stop acting as if "Free Trade" is how the world really works.
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