This is my favorite chapter so far, and one of the most challenging for me, mentally. I like the relevance of the topic to today's social and political issues. When I watched the presidential debate, one candidate would point the finger at the other for sending jobs overseas. It's such an unpopular idea but, according to the author of our text book, it's the economically correct one. There seems to be such a huge gap between how economists view international trade and how non-economists view it. That made me skeptical.
Since I took Macroeconomics last semester, and the test book is identical so far, I had a good understanding about the benefits of free trade. From an economic standpoint, I saw how free trade would increase the economic well-being of every country that allowed it. I remembered the arguments in the text and how economists had an answer for each of them. This time around, I finally see why I'm not totally on board and why most of the county isn't either. Economic well-being for a nation does not translate into economic well-being for individuals. That's the problem. As Paul Krugman pointed out in his article, Trouble with Trade, the upper and upper-middle classes are reaping the benefits from international trade, while the middle and especially lower classes are mostly disadvantaged by it. In our country, manufacturing jobs - usually held by the middle and lower classes are declining while jobs in higher education, usually held by the middle to upper class, are increasing. It all makes sense in broad economic terms but to that person who suddenly lost their manufacturing job at the age of 40, it's completely irrelevant that careers in higher education are on the upswing. In the text, the answer is for those misplaced workers to prepare themselves, via education and training, for a career in a field that is growing. It's just not realistic to expect someone in the latter half of their life to be able to do that, especially now that they have no income! And for the few that can, their chances of getting a job after school and/or training are slim at best. That's why I take issue with Steven E. Landsburg's article, What to Expect When You're Free Trading. I see nothing wrong with expecting those benefiting the most from free trade to use some of their newly acquired resources to help their fellow Americans benefit as well. I'm totally taken aback by people like Landsberg, who have no shame in taking all they can for themselves while declaring that the less fortunate are the morally corrupt portion of our society. GRRRR!
In short, free-trade benefits everyone, but it benefits some much more than others. In order to increase the well-being of a nation, I believe that equality has to become part of the economic equation.
No comments:
Post a Comment