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Debate:Does "free trade" increase wealth rather than simply redistribute it? (view source)
Revision as of 20:12, March 14, 2007
, 20:12, March 14, 2007no edit summary
Properly designed/regulated open trade would create wealth more efficiently and for more people than a system of pro-business free trade that allows companies to exploit poverty stricken workers, prevent organization of labor, and ignore environmental standards by moving to third world nations. Bad practices lead to collapse of established working economies and a worsening of conditions for locals and the movement of jobs to this new country leads to lowered wages and employment in their nation of origination and prices don't actually fall because the company wants to increase their profit margin. Basically, costs don't fall. Labor costs fall and management costs rise. Although this is not necessarily the result of free trade, free trade could possibly act to redistribute wealth from the laborers to the owners of capital and not to actually create more wealth. [[User:Thorn969|Thorn969]] 01:30, 14 March 2007 (EDT)
Properly designed/regulated open trade would create wealth more efficiently and for more people than a system of pro-business free trade that allows companies to exploit poverty stricken workers, prevent organization of labor, and ignore environmental standards by moving to third world nations. Bad practices lead to collapse of established working economies and a worsening of conditions for locals and the movement of jobs to this new country leads to lowered wages and employment in their nation of origination and prices don't actually fall because the company wants to increase their profit margin. Basically, costs don't fall. Labor costs fall and management costs rise. Although this is not necessarily the result of free trade, free trade could possibly act to redistribute wealth from the laborers to the owners of capital and not to actually create more wealth. [[User:Thorn969|Thorn969]] 01:30, 14 March 2007 (EDT)
:Well, here are some economically sensical arguments for Thorn. First, competition forces firms to lower product prices when factor costs such as labor fall, so free trade does rapidly decrease prices. Happy Meal toys would be rather more expensive if produced in the United States. You ignore that many skilled positions in advanced economies lack sufficient workers, which prompts entrepreneurs such as Bill Gates to call for more skilled immigrants to fill labor shortages. And obviously some people do lose out in the long run, but that can be answered either with graduated taxes/unemployment relief or recourse to personal savings. Finally the trade deficit argument fails on two counts. First, if any country is a net exporter at least one other country must be a net importer. Also a basic accounting reality is the following equation; Exports-Imports=Savings-Investment. Essentially if Americans and foreign individuals or firms want to invest more in America than Americans want to save the result will be a trade deficit. Since investment is a good thing a trade deficit isn't the end of the world, although the current American one is abnormally large due to excessive federal deficit spending. --[[User:WOVcenter|WOVcenter]] 16:12, 14 March 2007 (EDT)