The Choice: A Fable of Free Trade and Protectionism
Through the use of allegory and satire, this text provides an exposition of the law of comparative advantage, an economic law applicable to all trading nations. In the fable, the ghost of David Ricardo provides an entertaining look at the array of questions facing America, and indeed the world, in the choice between free trade and protectionism.
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LibraryThing ReviewUser Review - Daniel.Estes - LibraryThing
The Choice by Russell Roberts is a short parable on the dangers of protectionism as an economic system. Throughout you'll recognize a mix of storytelling frameworks made popular by "It's a Wonderful ... Read full review
Free trade is not trade as historically practiced and defined. It is primarily about making production portal and divorcing investments from production this way. The main product being traded are workers who are put on a global trading block to compete with one another for the same jobs. Workers are "commoditized." The value of workers and labor is deflated and degraded. This represents trillions of dollars in value lost forever while the investment communities take advantage of this degradation of real values. The value of workers and labor is a real asset and perhaps even a better money standard than all the funny money products the Federal Reserve creates out of nothing.
Free traders use the history of protectionism to defend the process. The most common proposition is pointing to the Smoot-Hawley tariff act as a cause of the Great Depression and/or prolonging it. This does not make sense because the Great Depression started after the stock market crash. The Smoot-Hawley act was still waiting to be passed. When it was passed, it lasted only for awhile and did not really mean much since nations in the world did not have much money to prompt trade. In a short span of time, President Roosevelt had the power to raise or lower tariffs at anytime. He tried several measures but nothing worked until he announced the the Lend Lease program saying he would not let the lack of dollars stand in his way. He started the process of shipping goods to the allies without worrying about when payments would be paid. When World War 2, his plan ignited the most awesome industrial might the world has ever known. After the war, there were plenty of resources in the U.S. to establish the Marshall Plan which helped restore economies in Europe and the Far East.
However, in 1956, the Suez crisis exposed an international financial crisis with England being the worst case scenario. This is the year money was globalized. In the same year, the U.S. Federal Government sponsored the moving of factories outside of the U.S.A. It was a temporary program to test the waters but it never ended. It evolved into the Maquiladora factory program in Mexico and other Central American countries where impoverished workers were used to make products for America. By 1992, more than 2,000 factories were moved to Mexico alone. When President Clinton, a Democrat controlled congress and the "Contract with American Republicans passed the NAFTA and GATT trade agreements the number of factories moved to Mexico doubled to more than 4,000. Free trade proved to be a failure from the start with President Clinton having to rush billions of dollars to Mexico to save the peso and the Mexican economy. The value of the peso was also threatening money values in Europe with money being globalized.
Also none of this stopped the tide of Mexican workers flowing to the American seeking economic survival. This is the true story of free trade. Sadly it represents the lost of World War 2 more than fifty years after the fact with the post war awesome industrial might of the U.S. being shredded and sent to far away places across the globe.
The free trade scam continues as President Obama bailing out big money interests, banks, the stock market and "too big to fail" corporations while ignoring the suffering of all who lost everything due to free trade. The record breaking trade deficit also represents trillions of dollars of value lost forever. Just think how the U.S. could have helped the a real global economy if they had all this money to do it.
How anyone can ignore what really happened is overwhelming.
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Soul of David Ricardo
THREE The Roundabout Way to Wealth
FOUR Is Japan Winning the Economic War?
FIVE Do Imports Cost America Jobs?
SIX The New Generation of American KnowHow
SEVEN Do Tariffs Protect American Jobs?
EIGHT Tariffs vs Quotas
NINE Road Trip
ELEVEN Fair Trade vs Free Trade
TWELVE SelfSufficiency Is the Road to Poverty
THIRTEEN The Choice
FOURTEEN A Final Word from David Ricardo 203