A Common Sense Approach To Free Trade

March 13, 2019 GMT

Is free trade with other countries good for Americans, or is it leading to decline, joblessness, and despair? The experts’ opinions on free trade tend to differ from most American’s common-sense understanding. Take the practical example of China and the United States. China’s low wages and massive production facilities were the engines that enabled WalMart and Amazon to provide cheap, basic-quality imported products at low prices to American consumers. So, is this a boon for American consumers caused by free trade? Yes, if you are employed and make money that lets you shop at Amazon or WalMart. You have to have money to shop with in order to benefit from the low prices generated by free trade. If you were an employee at one of the auto plants, manufacturers and steel plants that could not compete with the low prices of goods coming from China and closed down, your experience is probably different. You experienced the losses of free trade, with your job vanishing and perhaps even your industry-specific skill set becoming completely obsolete. According to the economists, these pros and cons of free trade balance out to be on the pro side, with consumers benefiting more overall from lower prices than the losses in income experienced by those Americans thrown out of work. However, this analysis emphasizes the experience of consumers more than the experience of workers. Is the small benefit in lower prices experienced by a large mass of American consumers really worth the total loss that those displaced American workers experience? The difference between these two groups probably matches the two camps of anti-Trump and pro-Trump voters. Displaced-employee Trump voters “want their country back” — from China. What’s worse is that, even if those displaced workers manage to use public assistance of some sort, or achieve replacement work in a different industry, they are likely to be so short of money that they have no choice but to continue shopping from those same budget retailers that killed their jobs by bringing in the cheap imports in the first place! This adds insult to injury. Economists and politicians thinking about free trade should be more focused on the wellbeing of the American workforce, for two reasons. One, workers are American citizens, and arguably the job of any nation is to protect and develop its own citizens first. Free trade certainly seems to benefit American corporations just fine, but corporations are not American citizens. This can be addressed by providing more generous job retraining and temporary salary benefits to displaced workers, even if it means more taxes on the consumers who benefited from those lower prices. And this argues for stronger protections against illegal workers who are not American citizens, as Trump voters want. Second, and more strategically, we are, after all, not all one big happy globalist, free-trade world. With the return of tensions among the major powers like America, Russia and China to levels not seen since the Cold War, America should be thinking about how to protect and develop its workforce so that we can produce whatever essential products we might need ourselves in case of a war or other conflict that cuts off our supply of cheap steel, consumer goods and cellphones from China. During World War II, the American industrial engine produced the tanks, ships, and weapons that won the war. We don’t even produce the steel to manufacture with anymore. Let’s focus on the experience of our fellow American workers more than on the price of the goods we buy. After all, the next job lost could be your own. STEVEN R. HOWELL, PH.D., is an associate professor of Psychology, Keystone College, La Plume.