I have a new article on the news and commentary website, “EpicTimes,” on “Policy Positions: Free Trade vs. Political Ignorance.”
In this year’s campaign for the U.S. presidency political ignorance and policy stupidity is abundant on both the Democratic and Republican party sides of the battle for the White House. This is especially true when it comes to the benefits of free trade and America’s participation in the global economy.
The total market value of imports into and exports from the U.S. is greater than $5 trillion, or more than 25 percent of 2015 U.S. Gross Domestic Product. In addition, one out of every five jobs in the U.S. is connected with international trade and foreign investment.
Yet, the competing presidential candidates give the impression that all international trade is virtually a zero-sum game, from which the American consumer and worker comes up short.
When free from government intervention, regulation and restriction, market-based trade, both domestic and international, is always a positive sum game in which all participants view themselves as better off.
An expanding arena of trade that incorporates more people and more areas of the Earth offers the opportunity for greater gains from division of labor, increased human creativity and productivity, and wider circles of more, better and less expensive goods and services. Human standards of living rise.
Foreign competition does not threaten to steal jobs and leave a growing number of Americans unemployed. Being able to purchase less expense foreign-made goods raises the real income of American consumers as they can now buy other things they previously could not afford. Furthermore, foreign sellers desire to earn dollars preciously to have the financial wherewithal to purchase goods available for dollars.
Both this increase in real income through lower cost goods and the demands of foreigners for American goods as ultimate payment for what they have sold in the U.S., create more than enough alternative employments for those who may be initially displaced from the foreign competition.
Nor can trade retaliation against foreign countries that impose their own trade restrictions benefit American consumers or workers. This merely raises the prices of goods in the U.S. compared to what they could be under a free trade regime, and reduces employment opportunities in both the import and export sectors of the American economy, thereby potentially lowering the wages of some workers who lose jobs in these sectors of the economy.
The best policy for the United States is unrestricted freedom of trade, regardless of the ignorant and misplaced trade policies of other countries.