A fellow WatchBLOG editor bade us all to read a paper written by Milton and Rose Friedman The Case for Free Trade, and I am stunned by the near-sidedness of their collective viewpoint. This paper is totally divorced of common sense and the real world understanding, or values that would make it germane to the realities of today.
Nobel laureate or no, the man makes little practical sense; he is after all an economist. The Friedman’s paper leaves aside the fact that people are more then the sum total of their pocketbooks. In a vacuum the Friedman’s stance on free-trade would laudable, but we do not live in a vacuum, we live among other living breathing greedy human beings who last thought is free-trade. Just yesterday the U.S. filed its first claim against China in front of the World Trade Organization (WTO), to protest Chinese governments’ illegal protection of its semi-conductor industry.
The answer one day might be free trade, but that day is not here, and the time is not now. We have our own self-preservation to consider, or should we in the name of free-trade and lowest possible consumer prices disregard that as well?
We could say to the rest of the world: We believe in freedom and intend to practice it. We cannot force you to be free. But we can offer full cooperation on equal terms to all. Our market is open to you without tariffs or other restrictions. Sell here what you can and wish to. Buy whatever you can and wish to. In that way cooperation among individuals can be worldwide and free.—Milton Friedman and Rose Friedman, The Case for Free Trade, Hoover Institute, Hoover Digest 1997 No 4.
Let’s take the Friedman illogical argument to its logical conclusion. We throw open the doors to all nations to freely trade with the U.S. How long would it be before what is left of the U.S. manufacturing sector vanishes in the name of free-trade; 10, 15, 20 years? How many more white collar service jobs would be outsourced to the lowest bidder; 1 million, 2, 5, fifteen million? The U.S. economy would suffer irreversible damage, as one industry after another vanished over the horizon of free-trade: ship building (military and commercial), steel, heavy construction, aircraft manufacturing, tank building, munitions, textiles, semiconductors, appliances, electronics, automobiles, heavy vehicles, farm equipment, die-casting, computers, building materials, paper products, plastics, aluminum, etc., all gone because they would no longer be able to compete on the uneven playing field of unabashed world trade.
Make no mistakes, if the U.S. were to unilaterally lift tariffs the playing field would not suddenly equalize despite our principled(?), foolish and self-destructive stance. The rest of the world is inhabited by folks just as greedy as us; wishing for civility will not make it so; hoping for integrity and fair play, ignorant.
Agriculture would follow the manufacturing and service sectors and soon we would no longer be able to feed ourselves, but depend on other nations for our substance, as consumer flock to lower priced foreign produce. Within say 15 years the agriculture industry would be in shambles as the world dumped its unregulated produce on U.S. shores.
What then would we have to offer the world to trade? We would in effect manufacture and product nothing! Job lose would be staggering, far exceeding what we see today; can you say depression? And as U.S. small businesses (reportedly the largest employers of American workers), fold in droves, or ship jobs overseas and large U.S. business in a bid to survive, either relocate entirely or outsource every job possible, the tax base shrikes, and the standard of living plummets. Massive job lose shrikes the tax base even more, and states are forced to drastically cut social services. And the unthinkable occurs: the federal government defaults on some long term bonds and worst yet teeters on the brink of bankruptcy, the result of too much debt and not enough funds to pay even the interest on the bonds (Treasury Notes). State and federal governments lay off thousands of workers, and shutter whole agencies in a bid to save money exacerbating the already historically high unemployment situation, and worsening the depression.
Homelessness rises to epidemic proportions as Americans lose their homes to foreclosures because they lack jobs, and racked up too much debt in the pursuit of goods, cheap or otherwise. Diseases long thought under control rage out tear through the inner cities, because basic health care is now a pay as you go affair and most Americans no longer can afford it. Across the U.S., counties long the last refuge of the un-insured by-and-large can no longer afford to run county hospitals, and even doctors apply for unemployment. Need I speak to the devastation a shrinking tax base and rising population would have on Medicare and Medicaid?
Crime rises to historical highs as police forces around the country are slashed, and drug use spreads unabashed to all corners of the American society, fueling crime sprees heretofore realized in America. In some large cities, Marshal Law has been declared as the populace becomes increasingly unruly and restless without jobs and hope.
The nation infrastructure crumbles for lack of skilled labor and cash; bridges, roads, rail road tracks all fall into disrepair. Phone service become unreliable, and electrical blackouts common as the utility companies search for skilled labor to effect repairs.
The U.S. military, once the world’s greatest, is a showdown of it former self. Navy ships lie at pier-side because there is no money to buy fuel from foreign supplies who are charging a premium for it, or because they are in desperate need of repair, but there are no U.S. ship yards left to do the work. Pilots (all services) cannot log enough flight hours to remain combat ready for the same reason, and because military aircraft now have to be shipped overseas to be repaired; and hundreds lie dormant awaiting spare parts or service. The military has cut manpower drastically no longer able to afford the personnel to fight a one-front war, let alone three. The U.S. closes bases across the world, leaving power vacuums to be filled by who else, but China and India.
China becomes the predominate economic and military power in the world, and Taiwan finally falls to mainland China. Without the U.S. to counter balance it, China turns is sights on its old nemesis Japan and threatens invasion. Skirmishes are now common along the Chinese Indian boarder, as both flex their newly acquired muscles…need I go on?