Economy/jobs - principles: protectionism vs. free trade

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Bibliographic entry (nonfiction):

Jerry Mander & Edward Goldsmith, eds., The Case Against the Global Economy: And For a Turn Toward the Local

We have seen an increasingly globalization of the economy. Factories shut down, jobs are elimated, production is opened up overseas using cheaper labor, and virtually everything we buy these days is made somewhere other than in the U.S.A.

When Y2K hits, and global supply lines are severely disrupted, then perhaps we will learn whether this was such a good idea after all.

The editors of this book have compiled an extensive set of essays which set forth the case against the globalization of the economy. While free-market economists have made a good case in favor of global free trade, this case always rests on the aggregate impact to the national economy as a whole. The fact that there are losers as well as winners is seldom considered, and the cost to the fabric of society and the national security of these losses is not fully accounted for. These and other downsides to the impact of global free trade are detailed in this volume, and the case for an economic system which nurtures local economic diversity behind a reasonable barrier of economic isolation is advanced. If there is a fault with this volume, it is that the contributors do not adequately address the downside of protectionist economic policy. There is a very real cost, as economists have well demonstrated. Perhaps the best approach is one in which the public is clearly and honestly informed of the full benefits and costs of both the protectionist and free-trade alternatives, and empowered to make a public choice in favor of whatever balance between the two extremes is perceived to be most beneficial to the nation as a whole.

-- Stefan Stackhouse (stefans@mindspring.com), August 14, 1999

Answers

One thing that has occurred to me with regard to free trade and protectionism,it's not the amount of trade that goes on between countries that creates wealth but rather the amount of free trade that goes on within a country.The Soviet Bloc traded with each other for years and look at what happened to their economies.If Y2K brings down the global economy then all economies will become national,regional, or perhaps even local.Consequently a way to revive national,regional and local economies would be an easing of taxes and regulations regarding commerce.

-- Stanley Lucas (StanleyLucas@WebTv.net), September 10, 1999.

If the internet survives, ulimtately it will grow again. Then it will supercede all other modes of commerce. Chances are, it will be a very free kind of trade and it will circumvent all national boundaries. In time, national governments will diminish in importance and people will orient themselves on a global/local axis, skipping state and national levels. Don't know how prudent this is but this is the inevitable trend.

-- coprolith (coprolith@rocketship.com), September 16, 1999.

I lived in Japan for a year and discovered at that time (1990) that there was a feverish debate going on regarding the need for Japan to keep all of their rice production at home (very high tarriffs on rice imports). The way the industry was generally getting around it was that they were importing products derived from rice (sake, rice flour, etc). Fortunately for the Japanese, in the face of y2k, there is still enough rice production (done by hundreds of thousands of little farmers) to keep feeding their own people. But this program cost all of the citizens a lot because they paid a lot for rice.

Other countries have planted over all vegetable gardens with coffee plants...will these people starve?

China has a massive population but continues to export the best to the rest of the world. If y2k hits America hard, and we can't pay our bills, and the dollar loses value...well Chinese factories (when they come back on stream) will decide to produce for their own people (only fair). What made America strong after WWII was that they had one of the worlds largest non-rural populations, plenty of factories and workers, and a public ready to see a car, refrigerator, TV, radio/stereo in every newly built suburban home. That sounds a lot like China today.

What America still has is the ability to create something new...to create new trends on the front end...to create new ways to live in a multicultural world...to find new ways to blend technologies. The Detroits of America are past. It is now the Silicon Valleys.

Take the example of Boulder, CO. Once a small town near Denver high up in an almost desert climate. But when it got a University (using intellectual assets to create and export knowledge) it began to thrive. Many found it beautiful and stayed. The thin mountain air seemed to attract a new form of spirit...it also became a mecca for a new kind of lifestyle (alternative healing, natural living, equal opportunity community). At the same time, it attracted young small companies in computer, electronics, biotechnology, etc. Now, a small house on 1/4 acre near the quaint downtown costs about $300,000. If y2k is severe, Boulder will be devastated financially. They cannot grow food very well. What if the University shuts down for a semester or a year? What happens when people don't take ski vacations? What happens when the world doesn't want to pay for high tech research and new high tech products? What happens when people can't afford a massage workshop?

But Boulder is not a mistake. Boulder is a sign of the future. Little Boulder has international impact today...and someday it will once again, no matter how hard y2k hits.

From printing press, to telephone, to computer, to network. From pasteurization, to sterile food processing, to biotechnology. From horse, to cart, to automoble....mankind has discovered technology. There is no going back. The danger in global trade has nothing to do with national goverments. The danger is in the consolidation of production. The danger is in defining the primary role of business as profit and profit growth.

Y2k may splinter the world into hundreds of thousands of enclaves of people. Some will barely eke out a living. Others will return quickly to a state where they can create something. Those who have put back together a working system will rapidly develop trade in their region.

Regions will look with a new eye towards local self-sufficiency. Businesses may not be taxed on profits but taxed based on what they bring to the diversity in a community.

-- Thom Gilligan (thomgill@eznet.net), September 17, 1999.


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