There Are No Guns In Free Trade
by Sean JoyceNo countries have to take part in trade, but if they do the world will be a better place.
The most important thing to remember about a trade is that it is a voluntary exchange of value for value. If a country has a good to trade and they feel that their trading partners are trying to take advantage of the country’s lack of development and will only make offers which are unfair, then the country can choose not to trade and use that good within its own country. If the country produces too much of a good to be consumed within their own country and they feel that they are being treated unfairly by their trading partners, then the country needs to invest its resources in other industries. It is an easy solution and can be applied to many of the issues that surround free trade. My advice to any countries with similar comments about being treated unfairly follows the same logic: “Our trading partners take advantage of our country’s size” – don’t trade with them. “The WTO doesn’t respect our country and won’t accept our ideas” – don’t be a member of the WTO. “Foreign-based factories are mistreating our people and polluting our water” – don’t allow foreign factories in your country. “The IMF charges us interest rate that we can’t afford” – don’t take out loans from the IMF.
With solutions as simple as this it may seem strange that there is so much trade between countries. The reason for this is also simple. All countries benefit from free trade. If a country is taking part in trade only to benefit the leaders of that country at the expense of the workers there, the problem lies with the leaders of that country and not trade.
As technology increases our world becomes smaller. Everyday improved travel and communication bring the people of the world closer together. With this has come globalization. Companies are spreading their operations around the world. This allows them to, among other things, utilize the low cost of labor in underdeveloped countries. It may sound terrible, but its not, its how things change. It’s not new either.
Around the turn of the century as the eastern United States grew, waves of immigrants were brought in for use as laborers in growing businesses. As workers became experienced they untied and fought for higher wages, better working conditions, and the like. In response to this, business owners brought in new waves of immigrants who were willing to work for less. Saturated labor markets kept wage rates down and allowed companies to dictate working standards and prosper. This is how the United States was built. Before an established worker who fought for his rights can call this system unfair, he has to remember how he himself got to the position he was currently in. He was an immigrant who came to the United States looking for a better life and willing to work for very little. The U.S. gave people a chance to come to a new place where they could work to improve their lives. What became of these underpaid immigrants and their families? They became the citizens of the United States and their families live in the most prosperous country in the world. Still today immigrants come to the U.S. willing to work for very little. And tomorrow their children will be better off.
Moving factories to underdeveloped countries is the expansion of American values throughout the world. People in these countries are given a chance to better their lives. No one forces them to go to work in these factories, they choose to because they feel that their lives and the lives of their families will better if they do. The massive amounts of people in these countries who live in straw huts live there because that is the point to which their culture and system of government has brought them. If that is how they wish to live then they must fight to force their government to keep foreign factories out. If they want to become a modern country and live in houses then allowing investment from the U.S. is exactly what they need.
Everyone can benefit from globalization, but as with capitalism there is some room for errors. I think there are three main problems with globalization that need attention from the governments of the countries involved. These problems are inhumane treatment of workers in poor countries, inconsistent environmental regulations, and lack of affective programs to help workers displaced by globalization.
When a company moves part of its operations to a foreign country it shares the responsibility with the U.S. government and the government of country being expanded into of ensuring the fair treatment of the workers it employs. This does not mean setting a minimum wage or imposing U.S. labor regulations on these workers. It means providing working conditions that are not detrimental to the worker’s health as well as a commitment to honest interaction with the workers.
The United States and WTO also need to work harder in setting a more equal standard of environmental regulations. Large corporations do have too much influence on the standards that are set. The environment is something that is sacrificed in a capitalistic system and needs to be protected to some extent by the governing bodies. Public pressure on elected leaders of their countries is the only way to change this.
Capitalism leaves people to fend for themselves during transitional periods. At this point I am yet to be convinced that any social program paid for by taxes is bad. Large groups of workers are put out of work by the changing global economy. The U.S. economy is shifting from manufacturing to one driven by the service and high-tech industries. As the need for labor-intensive workers is decreasing in this country, the number of jobs requiring some education or specific training is growing. This is not a problem for the young people entering the work force because this is the world they have prepared to enter. The problem falls on the shoulders of the workers who have spent their lives living a certain way and now face a world where their skills have lost their value. It creates hardships, but it is the only way that countries can remain productive. Any time there is a large change for the better there first comes a period of adjustment that often doesn’t seem worth it. But it is the only way to stay productive. Just as the company that decides not to implement a new computer system because of the initial difficulty in adjustment will fall behind its competitors, so will the country that refuses to accept a changing economy in order to avoid the temporary hardships that come with it. These hardships will only be temporary if displaced workers are willing to accept the difficult and seemingly unfair challenge that has been given to them. There are programs in place to train displaced workers so that they may move to the types of jobs being created in the new economy. I think more programs that promote this process and help motivate displaced workers to change will make this necessary change less hurtful.
I believe that everyone will benefit from the repositioning of jobs that is currently taking place. Unskilled jobs are moving out of this country and the U.S. is becoming a magnet for highly skilled people looking to maximize their productivity. Why are so many doctors, college professors, and leaders in the technology field in the U.S. foreign? The answer -- capable people are more prosperous in the U.S than in any other country. This movement will only create more production and better jobs in this country. There are an infinite amount of middle-income jobs that support these new businesses.
Capitalism forces people and countries to accept responsibility for themselves. Socialism allows them to evade it. Life is not always pleasant. It is not always fair. The decision to accept responsibility still has to be made. The United States was built by people taking responsibility for themselves in adverse situations. The more movements that are made by the U.S. to shield people or other countries from reality, the less productive the country and the world will be.
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Some alternate views of Free Trade, Capitalism, and Globalization found on this site:
The Problem With Free Trade by Neil Convery
An Anarchist Critique of the Global Economy
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