Free trade folly

by Jay Davis, M.D.

Americans, like everyone else, are suckers for labels. Who, in the "Land of the Free" could be against free trade? Who could oppose the unfettered exchange of goods between people of all nations?

On first glance, it seems a great idea. With free trade, the entire world becomes a consumer's bazaar. If Malaysia makes the cheapest radios this week, why not buy them there? If Chilean grapes are a better deal than California's, hey buy Chilean. Why should governments impose tariffs that make foreign goods more expensive? Why should we consumers be deprived of choice?

Why indeed?

For a start, we are more than a nation of bargain-hunters. We are also workers and producers. If American workers are paid an average of $19 an hour they simply cannot compete with Chinese who earn 50 cents. Which explains why your Nikes are made in China -- and why the thousands of Americans who once made shoes have lost their jobs. That is the other side of the coin.

If the world is to be one happy free-trading fishbowl, jobs will continue moving to the low-wage countries. Jobs will stay here only when American workers are willing to accept equal pay.

But Americans cannot work for those wages. A Third World worker who lives in an unplumbed, unheated house may be delighted to earn $1 an hour. He can feed his family and gradually buy into the "good life." But his American counterpart already has an expensive life-style. Indoor plumbing, central heating, television, an occasional vacation -- these are things that we expect for our labors. Shouldn't we protect that lifestyle?

And there is an even more compelling reason to abhor free trade. A country's power is not based on how well its citizens find bargains. Rather, its strength is in what it makes, what it manufactures.

Japan is a world power -- perhaps the premier world industrial power -- only 50 years after being reduced to rubble and ashes. And it reached its position by carefully avoiding free trade. For example, it could have cheaply imported U.S. electronics after the war, letting its citizens act as bargain hunters. Instead, it deliberately did otherwise.

Japan kept U.S. products out, charged its own citizens higher prices, and nurtured its own industry. It then undersold American products -- in America! -- and demolished the U.S. industry.

Today Japan is the undisputed leader in electronics, with the U.S. a feeble has-been. Indeed, we have become so dependent on Japanese electronics that, had the Gulf war gone on much longer, we would have been unable to make new weapon systems without Japanese help.

Thanks to free trade, the U.S. no longer builds ships, televisions, stereos, calculators, VCRs or computer screens. And now -- as our trade with China soars -- we are losing manufacturing in the low-end market: hand tools, power tools, home appliances, shoes and cooking timers.

Yes, free trade has given our citizens affordable goods, but at the price of much of our industrial base. We have deceived ourselves that we are in a "post industrial age" that it somehow doesn't matter that we've lost our manufacturing superiority. But our rust belts, our grotesque trade imbalances, our incessant downsizing, our homeless, belie that myth.

When we finish destroying our manufacturing base what will we do? Well, we still have good farmland and forests -- whatever foreign interests haven't bought up. Perhaps we'll trade our natural resources for products manufactured by other countries. Perhaps we can learn to be happy Third World citizens.

Free trade, alas, is like free love: exhilarating, exciting and deliciously self-indulgent. But half the people engaging in it will ultimately be screwed.


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