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Reblogged:Both Parties Wrong on 'Globalization'

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John Stossel has a column that correctly calls out Joe Biden and Donald Trump as both being wrong about free trade, which both parties smear as "globalization" when it's convenient.

The piece briefly debunks five common myths, and I was glad to see Imports take jobs from Americans addressed as Myth No. 2:
This is the evil face of world-wide central planning, not of world-wide free trade. (Image by World Economic Forum, via Wikimedia Commons, license.)
I say to [the Cato Institute's Scott] Lincicome, "Some people do lose jobs."

"True," he replies, "We lose about 5 million jobs every month."

But trade isn't the main reason. "Jobs are lost due to ... changing consumer tastes and from innovation. We make more stuff with fewer workers. That's productivity."

Productivity increases are good.

Trade and productivity improvements are reasons why the number of Americans who do have jobs has risen.

"We're at historically high manufacturing job openings," says Lincicome, "Manufacturers in the United States say they can't find enough workers."
The piece avoids putting off readers with detailed descriptions of the economic laws that make free trade a good thing, opting for more colloquial descriptions.

For example, the Law of Comparative Advantage, which explains how free trade permits a sort of international division of labor, isn't stated explicitly. Instead the piece relies on an analogy of our national "trade deficit" to the "deficit" we all have, as individuals, with our grocery stores.

There are, of course multiple ways the smear "globalization" could be addressed. For example, central planning via "free trade agreements" is not actually the same thing as free trade. And international agreements that damage the economy, such as the Paris Climate Accords, often get lumped together with misconceptions about free trade when populists attack "globalization." Those go beyond the scope of the piece, but that's fine: There is an incredible amount of ignorance about basic economics out there: One has to start somewhere...

-- CAV

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It's not "ignorance", it's evasion and lies from haters of the good, capitalism,  and everything that makes the world a better place for all individuals on it.

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I suppose the article does an adequate job of addressing the standard political complaints about jobs in relation to imports (though I don’t accept the claim that “Manufacturing output in the U.S. is near its all-time high. We make more than Japan, Germany, India, and South Korea combined” on the simple grounds that this is a factual claim which deserves actual numbers and sources rather than an unsupported assertion – but facts apparently get in the way of reasoning). One issue which does indeed figure into Objectivist reasoning on this topic is the question, what is the proper response to initiation of force?

Governmental force can be justified as a response to the initiation of force, therefore if the government of China initiates force against its citizens to compel labor or to subsidize manufacturing (etc.), it is not immoral for the US to retaliate by restricting the aggressors from profiting from their violations of rights. We have no duty to retaliate when the force is not directed against us, but it is morally allowed.

Not all international trade is voluntary, a proper analysis of the issue has to include whether or not some nation operates on free market principles, or does it use slave labor and government subsidy to allow their goods to better compete against goods traded under free market principles? Of course, there are no nations operating under free market principles – our goods are at a disadvantage because of price inflation resulting from government regulation including minimum wage laws. Our own government puts American goods at a disadvantage because it initiates force in order to create a supposed social benefit.

Even though all goods are tainted with the stain of force, we cannot therefore forbid all trade (hopefully this is not a controversial proposition). On the opposite side of the continuum, is it ever proper to limit trade in goods created by initiation of force? A kind of case that should be obvious is that it is proper to restrict trafficking in stolen goods, e.g. I cannot break into a warehouse, take goods, then sell them at a discount. But what about the case where the vendor did not himself steal the goods, instead, the government confiscated the goods and gave them to a vendor, who then sold them at a discount?

At the level of theory, all we can say is that initiation of force is improper. At the level of practical law, it is far from clear what degree of initiation of force can be ignored, when it comes to the governments (proper) function of protecting rights. A simple principle that could be applied is that it is proper for the US government to protect the rights of US citizens, and only US citizens. I am referring to the sketchy realm of the morally optional, when it comes to government action.

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"Myth No. 4: Trade and open markets create "a race to the bottom."

That's how Jon Stewart decries globalization on his show, saying, "Globalization allowed corporations to scour the planet for the cheapest labor and loosest regulations!"


That problem child, "globalization", would be fine and dandy when governments are barred from entry, economy and state kept strictly apart . Individuals (and companies) deal and trade with others, wherever and whenever they see opportunities and at their own risk. As it is, the large corporates operate "hand-in-glove" with their Gvt which in turn makes deals with foreign gvts. That is then, corporate-globalization, backed, and given entree by, the power of states.

Corporatocracy plus statism.

(which gives spurious credibilty to socialists who claim capitalism = imperialism ("/neocolonialism")

As good a place for this essay by Jeffrey Tucker



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