HOME | POLITICS | SPORTS | LIFE | SCI/TECH | OPEDS | HELPFUL TIPS
|
Feb 10, 2004 Nothing is so maligned by both left and right as free trade. Both Pat Buchanan and John Edwards denounce NAFTA. But when you look at it honestly the opponents of free trade simply don't have a leg to stand on. Let's look at what they say about free trade. myth #1: U.S. corporations are shipping jobs overseas. Ok, first of all jobs can't be shipped anywhere, they are not a tangible good. One can no more ship a good than one can import happiness. But lets look at the facts. Foreign employment is the result of foreign investment by U.S. companies. So where the investment goes jobs goes. So Where are U.S. corporations spending their money. (here I am borrowing from Walter Williams) Direct U.S. investment for 1996 was 796 billion dollars. Almost 400 billion went to Europe, with 18% going to England alone. Canada got 91 billion, Asia got 140 billion the Middle East got 9 billion and Africa got 7.6 billion. Jobs holds the same way. U.S. corporations were hiring far more people in wealthy, high wage nations like Canada, Germany, and England, than in poorer nations like the Phillipines, Thailand, or Colombia. Myth#2:U.S corporations send jobs to low income nations and pay a slave wage. Well it has already been shown that most of the jobs are the result of investment in wealthy nations, so most aren't going to poor nations. Secondly the term slave wage is an oxymoron and pure propaganda. 2$ a day to an American would be worthless but to say a cambodian it is a fortune. Multi national corporations always pay better than any other job the people of those countries could otherwise get. Another fallacy of this argument is that investment in other countries creates jobs that pay less. We used to complain about "slave wages" in Japan, Taiwain, and in South Korea. Now they are wealthy nations. We now complain about such wages in China, yet because of foreign investment their wages are going up. Also no one complains when a foreign company opens a factory in the U.S. isn't that exporting their jobs to the U.S.? Myth#3: American manufacturing jobs are dissapearing and moving to third world nations. These jobs are vanishing everywehere. For example the telecommunications industry has seen its workforce decline 80% in the last couple of decades. These jobs didn't appear in another nation. They were no longer needed. Factory jobs are dying off not because factories are moving but because fewer laborers are needed to do a job. Where it once took 500 men to run a factory it can now be done with less than 100. Should obsolete jobs be protected? Myth#4: Protectionism will protect American workers. Such ideas have been around for a long time now and they have always done more harm than good. Demands that the government protect jobs, will result in more jobs being lost. At the beginning of the 20th century Austrailia had the highest standard of living in the world. It also had high tarrifs against imports. What was the result? The domestic industry couldn't compete. Safe from competition in their own country because of the tariffs, they began to produce inferior products. In Latin America they tried much the same idea. High tarriffs to protect their factories from competition from wealthy nations. Their rationale was that it would only be temporary. Get them on their feet and then lower the tariff. It never worked, the factory workers yelled whenever there was talk of lowering the tariffs. Finally when the cost of subsidizing failing industries became too much they lowered the tariffs to make them compete. It works the same way here too. Steel mills want tariffs to protect them from foreign competition when they can't compete themselves. Protected industries produce infeiror products at higher prices because of the lack of competition, and by consequence drag other businesses down with them. These businesses are forced to make lay offs and cut costs hurting the economy. John Adams once said "facts are stubborn things" it's too bad that opponents of foreign trade can't see that. ------------ Email Craig Chamberlain: craig_chamberlain@hotmail.com Comment on this column in the forum. Tell a friend about this site! ------------ |
||||||
|
|
|||||||
|
