Trade versus Protectionism

[Fieldmouse]

http://www.gmu.edu/departments/economics/wew/articles/08/TradeVersusProtectionism.htm
NOTE TO WALTER WILLIAMS EDITORS: THE FOLLOWING COLUMN CONTAINS LANGUAGE IN THE 2ND PARAGRAPH THAT SOME READERS MAY FIND OFFENSIVE. THANK YOU FOR YOUR ATTENTION. -- CREATORS SYNDICATE, INC.
A MINORITY VIEW
BY WALTER E. WILLIAMS
RELEASE: WEDNESDAY, NOVEMBER 26, 2008, AND THEREAFTER

Trade versus Protectionism

There's a growing anti-trade sentiment in our country. Much of the dialogue is grossly misinformed. Let's try to untangle it a bit with a few questions and observations. First, does the U.S. trade with ***an and England? Put another way, is it members of the U.S. Congress trading with their counterparts in the ***anese Diet or the English Parliament? An affirmative answer is pure nonsense. When I purchased my Lexus, I had nothing to do with either the ***anese Diet or the U.S. Congress. Through an intermediary, a Lexus dealer, I dealt with Toyota Motor Corporation.
While it might be convenient to speak of one country trading with another, such aggregation can conceal a lot of evil, particularly when people call for trade barriers. For example, what would be a moral case for third-party interference, by either the ***anese Diet or the U.S. Congress, with an exchange between me and Toyota Motor Corporation? Some might reason that since ***an places restrictions on U.S. products entering their country, an appropriate retaliatory measure is not to allow ***anese products to freely enter the U.S. By the way, ***anese protectionist restrictions on rice imports force ***anese consumers to pay three or four times the world price for rice. How much sense does it make for Congress to retaliate against ***an by imposing restrictions on their products thereby forcing American consumers, say Lexus buyers, to pay higher prices? Should our rule be: If one country screws its citizens we should retaliate by screwing our citizens?
Since there is no moral argument for preventing one person from trading with another, anti-traders shift their argument to a patriotic appeal such as suggesting that we're losing our manufacturing sector. That doesn't square with the facts. According to a report given by Dr. William Strauss, senior economist for the Federal Reserve Bank of Chicago, titled "Is U.S. Losing Its Manufacturing Base?" (http://www.edcchicago.org/ecom/2008/edc062508.htm) the answer is no. In each of the past 60 years, U.S. manufacturing output growth has averaged 4 percent and productivity growth has averaged 3 percent. Manufacturing is going through the same process as agriculture. In 1900, 41 percent of American workers were employed in agriculture; today, only 2 percent are and agricultural output is greater. In 1940, 35 percent of workers were employed in manufacturing jobs; today, it's about 10 percent. Again, because of huge productivity gains, manufacturing output is greater.
The decline in manufacturing employment is not limited to the U.S. Since 2000, China has lost over 4.5 million manufacturing jobs. In fact, nine of the top 10 manufacturing countries, which produce 75 percent of the world's manufacturing output (the U.S., ***an, Germany, China, Britain, France, Italy, Korea, Canada, and Mexico), have lost manufacturing jobs but their manufacturing output has risen.
Despite the pretense of being a free trade nation, the U.S. has significant barriers to trade that come in the form of tariffs, quotas and steep regulatory barriers. Our restrictions are just not as onerous as many other countries but there's a push to make them so. It's simple politics. The people who face foreign competition, say management and workers in the auto industry, are well organized, have narrowly shared interests and the resources to have considerable clout in Washington to get Congress to enact trade barriers. Restricting foreign competition means higher prices for their products, and hence higher profits and fuller employment in their industry. The people who are benefited by foreign competition, say auto consumers, have widely dispersed interests; they are not organized at all and have little clout in Washington. You never see consumers descending on Washington complaining about cheap prices for foreign products; it's always domestic producers who do the complaining.
The relationship between prosperity and economic freedom, including free trade, is a no-brainer. But if you need hard evidence, check out the Heritage Foundation's "Index of Economic Freedom" (http://www.heritage.org/Index). You'll find that nations having the greatest measure of economic freedom are the most prosperous and peaceful.
Walter E. Williams is a professor of economics at George Mason University. To find out more about Walter E. Williams and read features by other Creators Syndicate writers and cartoonists, visit the Creators Syndicate Web page at www.creators.com.
COPYRIGHT 2008 CREATORS SYNDICATE, INC.

[DeerandbearhoG]

After the gut punch my fellow Americans in the protectionist, pro union, anti trade camp, gave me on November 4th , I am all too happy to return the favor and buy the most foreign made goods I can get my hands on. Especially the new toyota I plan on getting this summer, when my silverado is paid off, HaHa.

If you think I'm gonna give one red cent to some retired GM worker/ AARP member/Obama voter, in boca raton, your crazy!

The people want obama ,fine, its every man for himself now, as far I'm concerned. Let the Chinese take over for all I care, at least they admit ,theyre commies.

[muley699]

Taxes, regulation, and organized labor are what is killing American businesses, and trade barriers will not address that but they will increase the cost of goods and services. There is simply nothing to stop other nations from increasing tariffs etc in response to American trade barriers anyway.

[Cougar Mag]

So its fine for other countries to place trade restrictions upon us, but not fine for us to place restrictions upon them?

Where do you dig this garbage up FM?

[falcon]

So its fine for other countries to place trade restrictions upon us, but not fine for us to place restrictions upon them?

According to the political pukes in DC it is. They do not have the backbone to even complain when the communist Chinese sends poisoned toys, food and medicine into the US.

Where do you dig this garbage up FM?

Uncle TomWilliams is is one of the true far rightnutcases.

[RainmakerIII]

I suppose without tariffs, quotas and steep regulatory barriers, "of wich I think we need more of", our industry would completely disappear. Our work wages our so high in this country that we could never compete. If all wages were to drop to $3 bucks an hour or $1 per day, then we could have real FREE trade, this is not the case. So we need alot of regulation.

[Fieldmouse]

ORIGINAL: Cougar Mag

So its fine for other countries to place trade restrictions upon us, but not fine for us to place restrictions upon them?

So the answer is to raise the price of goods on everyone here in America? Why? Don't claim it's about saving jobs because it's not. Did you miss the point that manufacturing in this country has been growing at an average of4% each year for decades?

Where do you dig this garbage up FM?

I post facts and you call it garbage (I must add without any facts to back it up). The fact is Cougar, your too lazy to research this stuff and find out the truth. You the typical person the Dems love because you don't really want to know the truth, you just believe what you told.

Here are two links from that article. Go, read it and study it. You will find the truth in there. We loosing our manufacturing jobs due to inovation and design, not competition. How many times must I point this out to folks on this board, WE ARE THE NUMBER ONE MANUFACTURING COUNTRY IN THE WORLD! We won't stay that way be screwing our people by raising our tariffs. Go study what happened in the 30's. Also go study these two links.

"Is U.S. Losing Its Manufacturing Base?" (http://www.edcchicago.org/ecom/2008/edc062508.htm) - Great report a little over 40 pages.

http://www.heritage.org/Research/Economy/wm1709.cfm

Rainmaker:

suppose without tariffs, quotas and steep regulatory barriers, "of wich I think we need more of", our industry would completely disappear. Our work wages our so high in this country that we could never compete.

Didn't you claim to work in manufacturing? I'm guessing your always voting down buying new faster better equipment aren't you? If we can't compete, why has manufacturing grown:
In each of the past 60 years, U.S. manufacturing output growth has averaged 4 percent and productivity growth has averaged 3 percent.? Got an answer to that one? I do. It's called productivity. We are the number one productive workers in the world. The more productive you are the more product you put out and there for the more you can sell for less. It's the reason our wages continue to rise in this country.

[Cougar Mag]

We loosing our manufacturing jobs due to inovation and design, not competition.

In each of the past 60 years, U.S. manufacturing output growth has averaged 4 percent and productivity growth has averaged 3 percent.?

If correct that implies we produce more with less numbers of employees......I can believe that.

So we are loosing thousands of manufacturing jobs to Mexico, China, etc. because they are more innovative? I cannot believe that. Companies build new plants overseas and the cheap cost of labor is what is killing us.........not because they are more innovative.

When all is said and done nobody in America can survive making $3 per hour.

[Fieldmouse]

[blockquote]quote:

We loosing our manufacturing jobs due to inovation and design, not competition.[/blockquote]


[blockquote]quote:

In each of the past 60 years, U.S. manufacturing output growth has averaged 4 percent and productivity growth has averaged 3 percent.?[/blockquote]


If correct that implies we produce more with less numbers of employees......I can believe that.

Great, now we're getting some where. Here are the numbers:

Manufacturing is going through the same process as agriculture. In 1900, 41 percent of American workers were employed in agriculture; today, only 2 percent are and agricultural output is greater. In 1940, 35 percent of workers were employed in manufacturing jobs; today, it's about 10 percent. Again, because of huge productivity gains, manufacturing output is greater.

So we are loosing thousands of manufacturing jobs to Mexico, China, etc. because they are more innovative? I cannot believe that. Companies build new plants overseas and the cheap cost of labor is what is killing us.........not because they are more innovative.

When all is said and done nobody in America can survive making $3 per hour.

Bingo, you answered your own question. There are going there not because they are high tech and they are more inovated. They are going there because a lot of them are lower educated positions (not all). However, that doesn't change the fact we have grown in manufacturing even though jobs have decreased.

[Cougar Mag]

It depends upon what you define as a higher and lower educated job. In addition, if everyone in America was an engineer, lawyer, doctor, etc. where would we be?