Free Trade Helps America

Steven E. Lands­burg is cor­rect when he writes that free-trade and glob­al­iza­tion are help­ing, not hurt­ing, the United States:

All econ­o­mists know that when Amer­i­can jobs are out­sourced, Amer­i­cans as a group are net win­ners. What we lose through lower wages is more than off­set by what we gain through lower prices.

It’s all about the com­pe­ti­tion. If three peo­ple want to sell me a prod­uct, I will pur­chase it from the one who offers the low­est price. If the pool of avail­able sell­ers increases to three hun­dred, then the odds are greater that some­one in that group will be able to offer a price that is even lower. Glob­al­iza­tion has increased the size of the group to nearly six bil­lion. Glob­al­iza­tion is keep­ing prices low.

How­ever, it is also evi­dent that many work­ers in spe­cific indus­tries are los­ing (their jobs) while the con­sumers, in general, are win­ning (lower prices). But, Lans­burg won­ders, do the win­ners in glob­al­iza­tion owe the losers any­thing? His response is “no”:

Even if you’ve just lost your job, there’s some­thing fun­da­men­tally churl­ish about blam­ing the very phe­nom­e­non that’s ele­vated you above the sub­sis­tence level since the day you were born. If the world owes you com­pen­sa­tion for endur­ing the down­side of trade, what do you owe the world for enjoy­ing the upside?

I doubt there’s a human being on earth who hasn’t ben­e­fited from the oppor­tu­nity to trade freely with his neigh­bors. Imag­ine what your life would be like if you had to grow your own food, make your own clothes and rely on your grandmother’s home reme­dies for health care. Access to a trained physi­cian might reduce the demand for grandma’s home reme­dies, but — espe­cially at her age — she’s still got plenty of rea­son to be thank­ful for hav­ing a doctor…

Sup­pose, after years of buy­ing sham­poo at your local phar­macy, you dis­cover you can order the same sham­poo for less money on the Web. Do you have an oblig­a­tion to com­pen­sate your phar­ma­cist? If you move to a cheaper apart­ment, should you com­pen­sate your land­lord? When you eat at McDonald’s, should you com­pen­sate the own­ers of the diner next door? Pub­lic pol­icy should not be designed to advance moral instincts that we all reject every day of our lives.

Glob­al­iza­tion is an amoral phe­nom­e­non. It is nei­ther morally good or bad. It merely is. And it is some­thing that no coun­try can ignore. Pro­tec­tion­ists who want fac­tory jobs to remain in the United States sound like a type­writer man­u­fac­turer who use­lessly rails against the com­puter. Rather than learn­ing to man­u­fac­ture com­put­ers, he tries to stop oth­ers from cre­at­ing them. We need to respond log­i­cally to a ratio­nal process that is trans­form­ing the world.

Glob­al­iza­tion is not only amoral; it is also a neu­tral phe­nom­e­non. Whether it helps or hurts a coun­try depends on how that coun­try responds. It is impos­si­ble to ignore the real­ity: Man­u­fac­tur­ing is dead. The United States needs to revamp its edu­ca­tional sys­tem, retrain large seg­ments of the work­force, and focus on jobs that can only be per­formed locally. There is no moral imper­a­tive to do so — it just makes good eco­nomic sense.