Friday, April 20, 2007

Free Trade?

Another interesting article from the Nation, this one questioning the basic tenets of free trade. No this isn't typical liberal nonsense, but coverage of a well thought out response from a former free trader.

The notion is that America is losing high tech jobs to the developing world, in part because American companies have chosen to move these jobs to countries where the workers can be paid less. I don't have a real good response to the claim that the departure of high tech jobs from America is going to hurt us. However, I've been somewhat addicted to Milton Friedman's Free To Choose series as of late (which can be streamed via that link courtesy of, and I'm sure if Dr. Friedman was still with us he would have an appropriate answer for this Martin Luther of the anti-globalization movement, Ralph Gomory.

My knowledge of economics is very basic and mostly self-taught, but it still seems as though protectionism, even when it comes to "high tech" jobs, is not the way to go. In the 70's there was much consternation over the loss of manufacturing jobs- but contrary to some of the beliefs at the time, our economy did not collapse. I think such snap-shot looks at the economy tend to neglect the big picture and ignore the fact that the economy is dynamic and constantly evolving- and the more open that economy is, the more it can evolve and grow.

One thing that never fails to amaze me is the constant fear that we're somehow on the verge of an economic catastrophe. Unemployment is at an all-time low and if you ask people how they're doing economically, they'll probably tell you they're doing just fine. Yet we want to believe disaster is just around the corner- sort of like global warming I suppose.


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