On Free Trade

What is wrong with protecting ourselves?

A discussion on free trade.

I keep hearing that we must not allow our current fiscal crises to slow the march to globalization. We are warned not to “allow protectionism to rear it’s ugly head”. Maybe I’m missing something here, but it seems to me that the global order is at the heart of many of our worst problems, and that protectionism means protecting our own.

Secure food availability is lost in the free trade world order.

Basic to globalization is that goods should be produced where they can be produced most cheaply or efficiently. So called “more efficient” agriculture is often simply greater access to expensive machinery, irrigation and off-site synthetic inputs. Without these expensive inputs food can still be produced. It is just going to be a little bit slower. The entire agricultural sector of many nations is put at risk because someone somewhere can produce the product more cheaply. Once those inefficient farmers are gone, the people in these many nations become dependent on commodity markets just to eat. In a global trade era, volatility in food markets is another word for hunger.

Rich nations lose with free trade (workers at any rate).

Jobs move away to where labor is cheapest and regulations are most lax. Wages race to the bottom.

Most of our medicines are now made in China. Only a small fraction are inspected. Are we really better off ?

Poor nations fare even worse.

You might think that if rich nations lose, poor nations stand to gain from globalized trade. They can offer themselves for pitiful wages and thereby get a foot on a rung of the economic ladder. The truth is, the residents of poorer nation suffer greater harm than do those of us from more prosperous places.

The poor man’s alternative to a market economy has historically been a subsistence economy. This means people live with what the land and the family or tribe can provide. Care for the young and old is family responsibility; local foods are grown and stored. Subsistence economies have sustained humans and other mammals for millions of years.

Subsistence cultures collapse under pressure from global markets and cheap imports. The market economy becomes the only game in town. You have to have money. Family support systems collapse as the young and healthy must leave to earn that money.

Rural residents left in place could feed themselves and contribute to the food security of their countrymen. Now they are forced to the city slums in search of work. Ancient knowledge is not passed on. The fields go untended. Cultures that have sustained themselves for millennia are lost in a generation. When the money runs out, people go hungry.

The environment loses with free trade.

Goods are produced where pollution of the land, air and water is least restricted. This means goods are made with the least concern for pollution – externalized costs don’t count. Goods are shipped around the world, consuming fuel.

Our food quality is worse under free trade. For the farmer, there is no incentive to produce the “best” quality food when yours is being mixed with everyone else’s, and paid out at the same price.

We hear frequency of recalls of imported foods tested and found not to be safe, yet we inspect only about 1% of food imports.

National Security loses with free trade.

These millions of product shipments to the U.S. are mostly not inspected and not without risk. The sheer volume of containers coming into our ports increases the likelihood that those who wish to cause us harm will slip in weapons or radioactive or bio-toxic substances along with the legitimate trade goods.

There are pesticides used elsewhere, that are banned here because they cause cancer or other harm. We get the pesticides back in our imported food. (There are substances banned in Europe and elsewhere that are allowed here as well. The U.S. Government seems to require overwhelming evidence of toxicity before it will disallow a poison, but that is the subject for another discussion).

Societies relying on free trade in order to eat or for other basic necessities can never be secure in their food supply. Food secure people are less likely to support extremism or attack other countries.

The alternative to global trade is to encourage Local Production wherever possible.

Local Production provides protection from economic downturn and from war or natural disaster. Encouraging local production of basics by all societies makes every nation in the world more stable. Necessary products should be produced in many, not few, places. Self reliance of communities and nations benefits everyone. Each nation should strive to provide necessities for its own people.

Buying locally produced items keeps local people employed, and keeps money circulating within a community or nation. It is good for us. Policy ought to encourage behavior that is beneficial to the group. Individual self interest should align, as much as possible, with community self interest. To place cheaper import products along side American made goods on our store shelves creates perverse incentives. “Buy American”, under free trade rules, is a cruel joke.

Voluntary trade agreements are compatible with local production.

Agreements between willing partners make sense. We cannot make everything, and there is nothing wrong with trading for what we cannot produce. Nations should be free to choose what tariffs or import restrictions they wish to create, and what markets they wish to open up to foreign goods. Trade has its place; but trade has disadvantages that are sometimes hidden. These include job losses, pollution, loss of independence and risk of tainted products. It may also include wars. The rush to unrestricted global access to markets creates more harm than benefit. This is true for most people in this country and likewise for most people around the world.

Yes, I am a protectionist. I want to protect our society, our food, our jobs, our earth. Globalization harms each of these. How is it that so many people have been convinced we cannot stop and should indeed facilitate this expansion of global markets at the expense of our own, and everyone else’s own, security and well being?


- Jonathan Spero