Texas Ed

First, a couple definitions.

Free Markets

From Wikipedia: "A free market economy is an idealized form of market economy in which buyers and sellers are permitted to carry out transactions based solely on mutual agreement without interventionists in the form of taxes, subsidies, regulation, or government provision of goods or services beyond simply the protection of property rights and enforcement of contracts."

From Dictionary.com: "n. An economic market in which supply and demand are not regulated or are regulated with only minor restrictions."

Free Trade

From Britannica Concise Encyclopedia Online: "Policy in which a government does not discriminate against imports or interfere with exports."

From Dictionary.com: "2. Not under an arbitrary or despotic government; subject only to fixed laws regularly and fairly administered, and defended by them from encroachments upon natural or acquired rights; enjoying political liberty."

Proponents of free trade and it's benefits to the United States argue that free trade allow for manufacturers to take advantage of cheaper labor abroad and pass on the savings to consumers domestically. And since we're a free market economy, consumers are free to choose between the lower priced foreign produced item and the higher cost domestically produced item and we all know which they choose. You can find the basic argument in "Fair Trade's Free Foe" by Walter Williams at the CATO Institute website. Hey, no one is forcing you to buy that cheaper t-shirt from the off shore "U-Needa-Shirt Co." which is why free traders are so against government intervention in or by the United States.

So what? Where's the problem? Well, lets see, free traders don't want government intervention when they sell their products but don't seem to have the same problem with government intervention when they manufacture them. There's plenty of government intervention on the production side, it's just all in the manufacturer's favor. When we talk about buyers and sellers, remember they also buy and sell the services of labor. That's working people.

Isn't free labor part of free trade? Free trade supporters are quick to point out that no one wanted to work for lower wages here so the company went over there and you are, of course, welcome to follow them. But the workers over there aren't free to come over here, if they should so choose-immigration laws on both sides.

Workers over there don't have the same freedom to demand protections and benefits as workers over here do. The governments over there prevent workers from using their freedom to organize and "boycott" specific working conditions. I use the term boycott because free traders are sure to point out how consumers over here are free to organize and boycott companies or products if they so choose.

In other words, one half of the free trade equation, sellers over there, is severely constrained by government intervention. Off shore manufacturing is taking advantage of one type of government intervention, one to their favor, over there but argue against government intervention not to their favor, over here.

Now we can argue over what to do about it or even if government over here should do anything about it. But please, don't pretend that this is free trade for everyone and everyone involved benefits. The only part that is truly free is the manufacturer, here or there. Mr. Williams "U-Needa-Shirt Co." is using government intervention over there to keep its labor costs down--so what's wrong with a little government intervention over here?

# posted by mkretzschmar @ 6:15 AM