Stop the Pandering, With Free Trade There Are No 'Losers'
The election of Donald Trump has sadly brought with it yet another national debate about trade. Thanks to a newly elected president who thinks trade is war, and who thinks abundant imports are a sign of Americans getting swindled, the screamingly natural act of exchange has to be defended yet again.
There have been some great op-ed and editorial responses to the mindless rants against individual freedom, but seemingly every single defense of what is as natural as breathing has come with the inevitable disclaimer about trade’s alleged “losers.” In an otherwise excellent defense for The American Spectator, Ross Kaminsky is the latest to hedge his clear thinking with a needless admission that there are some who are victimized by economic cooperation. He doth protest too much. With trade, there are quite simply no losers.
Figure that as living, breathing human beings, we all eat. That we’re able to consume all manner of foods that on our own we couldn’t produce is a basic reminder that as individuals, we’re all ardent free traders.
Keeping what’s basic quite basic, the very word “trade” indicates an expression of freedom that’s all about winning. While we work for dollars, pounds, euros, yen, RMB, and myriad other currencies, our daily labors represent our intensely human desire to get what we don’t have. With trade it’s goods and services for goods and services, it’s all voluntary, so the very act of trade is all about the individual improving his circumstances through exchange of his surplus for the surplus of others. No one’s losing.
If you’re reading this post, you’re a major beneficiary of free trade. That’s true even if you disagree. Indeed, a solitary individual could never create a computer by himself, let alone one with the internal capabilities that enable global conversation, along with the ability to buy goods and services produced everywhere. Absent free trade, our existence would be gruesomely primitive, and almost certainly defined by constant hunger.
Have you, the reader, ever crossed town, or crossed state lines, to get a better deal on an appliance, or in search of better food? Of course you have. Thanks to technology and transportation advances, the range of individuals and businesses fighting to serve our needs has expanded in ways that have made all of us better off. In short, if you’ve ever bargain shopped, or turned up your nose to a local restaurant with lousy service, food or both, then you’re an ardent free trader.
While "globalization" has oddly been demonized in modern times, it’s merely an extension of the above. Thanks to technological and transportation advances, we increasingly have the most talented producers in the world competing to serve our needs alongside the individuals and businesses in the country that we live in. Competition brings with it even better products and services, and logically bigger bargains. With trade once again solely about goods and services for goods and services, the globalization of the marketplace means that every day we get up and go to work, we get a raise thanks to global competition expanding the purchasing power of our work.
Bringing all of this back to something as basic as food, there was a time when trade was largely free, but all about food. With markets local, nearly everyone who was able worked on farms just to have enough to eat. But with technological advances that expanded the size of markets all the while reducing the amount of human labor required to grow and raise food, more and more people were freed from life on the farm in favor of all manner of new kinds of work made possible by expanded production of the necessities.
Globalization is merely an extension of the advances that initially freed us from lives spent on the farm. And it’s revealed itself in beautiful ways. With global competition having rendered nearly everything a great deal cheaper, the range of work options has exploded. With more and more increasingly specialized “hands” cooperating in the creation of voluminous goods and services, the logical result has been more and more people doing work that no one in the days of small, local markets could ever have fathomed. Nowadays well-paid professions include dog-walker, sommelier, doggie diet consultant, video gamer, and yes, video game coach.
The common answer to all of this is twofold. The first is that free exchange on a global level has created “losers” simply because the competition has crushed certain American companies. Ok, but how many of you readers have ever rented a DVD or streamed a movie on Netflix, purchased a book on Amazon, or in need of a ride, tapped your phone only for an Uber driver to arrive minutes later? Netflix is based in Sunnyvale, CA, Amazon in Seattle, and Uber in San Francisco, and all three have put numerous U.S. companies out of business.
Implicit in the laments about trade is that absent “foreign competition,” jobs wouldn’t vanish so quickly. But as the above examples remind us, most job-destroying advances take place right here in the United States. That’s why we’re such a rich country. As free traders all, our preferences constantly lead to some businesses vanishing in favor of others that serve our needs better.
Would you the reader ever forfeit your right to choose which businesses to patronize just to save jobs that would eventually disappear as is? To the extent that foreign competition mothballs certain U.S. businesses, does anyone think that American entrepreneurs wouldn’t eventually do as foreigners do? As consumers we well know that businesses close all the time simply because our preferences change. This isn’t a foreign trade concept as much as we consumers and customers dictate which businesses will and will not survive. To blame dying industries and job obsolescence on foreigners is to miss the happy point that we consumers choose what businesses and jobs survive stateside and around the world based on where we spend our dollars.
The other response is that free trade has created “losers” out of old factory towns; the jobs in those towns once the alleged “ticket to a life firmly in the middle class.” But the nostalgists who lament the loss of factory work plainly never worked in them. As for the middle class life, readers can rest assured that the living standards of those factory workers was a fraction of what people in those supposedly desolate towns enjoy today by comparison.
So while factory jobs have been erased in concert with free trade, basic economic progress tells us they were going to disappear even if China’s policies had remained communist. Far from impoverishing Americans, increased global cooperation in modern times has freed Americans from work that afforded comparatively low living standards much as it freed Americans 150 years ago from the farm. Free trade is nothing more than workers exchanging their labor for what they don’t have with others doing the same. None of what’s described creates “losers.”