Rational Anarchy
And a happy holiday weekend to all our Notes readers...
Joel Bowman, with today’s Note From the End of the World: Buenos Aires, Argentina...
A rare no sesh Sunday yesterday, dear reader. Your editor’s wife and daughter surprised us with an Aussie Fathers’s Day lunch at one of our favorite parrillas over in the trendy Palermo Soho barrio (photo, above). The unhurried affair lasted well into the afternoon hours. (A belated “Happy Father’s Day” to all the Antipodean dads back home, too.)
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Cheers,
Joel
Just a thought about "free" trade, from one who claims no expertise. I do understand the concept, that products should be made where it is most fiscally efficient to do so, and should then be sold where local enterprise cannot meet the price. The manufacturers make money, the consumers save money, and everybody supposedly wins. But here is the stumbling point for me: Look at the U.S., where the manufacturing sector has been gutted and its home-grown products replaced by subsidized goods often from arguably its greatest economic and political enemy, China.
Yes, American consumers enjoy lower prices, but at what cost in jobs for their fellow Americans, and themselves? And what happens if China turns off the flow of goods? Just look at the supply chain debacle in the early 2020s. It is all well and good to talk about America evolving away from manufacturing into a service economy, but that only makes sense if one presupposes that economic decisions in the rest of an often-hostile world will be based on economics and not, as is more often the case in a strategic sense, geo-political considerations.
One need not look much farther than the evident collapse of the American Dream to the point where entire generations despair of ever having a good job, owning a home and comfortably raising a family. You cannot turn back the clock, but it is instructive to note that when America was a dominant manufacturing power providing well-paid jobs for almost anyone who really wanted to work, the American Dream became a reality for millions. It takes little imagination to see where America is heading under current trade policies, and it's not a pretty picture.
Is economic isolationism a bad thing in every case? Would it lessen the standard of living of American workers? Yes, prices would go up for some items but competition puts inexorable downward pressure on prices and Americans are demonstrably among the most industrially-competitive people on the planet. And consumers might well be prepared to pay a little more for this and that knowing that the extra cost in part goes to supporting American jobs. In many cases, their own jobs.
It is easy to say that free trade offers advantages for all participants, but in the case of an economic giant like the U.S. I wonder if there isn't a similarly-compelling argument that restricting imports to support the renaissance of a manufacturing and industrial sector that has proven its ability to deliver both quality goods and good jobs has some compelling advantages for the country , too.
Just wondering.
Great that you are thinking and asking questions Jim. I believe the argument is always and everywhere that free trade is the optimum. Obviously if you are at war not so. Personally I believe the China bogeyman is overblown to enrich certain interests. The big piece in your question I believe is the destruction of the US dollar over the past hundred years. Mises.org is an excellent place to find some of the answers you’re looking for. Have a great rest of the long weekend if your in the US