What is your attitude toward international trade?

[idlisambar]

Poll question: What is your attitude toward international trade?

[DuctapeFatwa]

1. International Living Wage and bilateral agreements

Workers' rights carved in stone and enforced by Ninjas specially trained and hand-picked by the Cesar Chavez foundation.

[Mattforclark]

3. You are aware, of course

that the GDP of Chad is $10 billion. Which is 1/40th of the size of the US defence budget. Which is 3.5% of the US GDP.

Of course you are.

An international living wage is a great long term goal, but it ain't happening as long as the world's population soars, disease spreads, and third world development flounders.

BUT

--- here's the caveat ---

Yes, ninjas, that is a superb idea.

[DuctapeFatwa]

4. I am aware of that, which is why I am for an International Living Wage

such a large share of resources in such a small number of hands is not good for any nation, nor for the world.

There will always be rich, and there will always be poor, but that is no excuse for giving full rein to extremist, unchecked greed.

[Mattforclark]

5. How much $ would the international living wage be?

[DuctapeFatwa]

7. It depends. Obviously, even within one country, it would slide depending

on what it costs to obtain the basics.

for instance, in the US, the Living Wage for people in rural Alabama would be different than that for those living in Silicon Valley.

The point is not a dollar amount, but the principle that a day's labor should be at the very least, equal to the cost of a day's survival.

[guitar man]

8. Kick Ass!

"a day's labor should be at the very least, equal to the cost of a day's survival."

I have never heard it put that succinctly. If you don't mind,I would like to use this phrase every time one of the Konservative Korporatist Kapitalist apoligists "poo-poos" at the suggestion of something as ridiculous as a "living wage." Every time one of them has the nerve to bitch about social programs,I want to throw this right in their face. :evilgrin:

[DuctapeFatwa]

9. It's a fundamental of capitalism. What we have now is feudalism

Those who oppose a living wage will need to change their stump speeches accordingly.

[Commie Pinko Dirtbag]

14. You, sir, just made line #5 of my DU Quotations sigline

See--

[idlisambar]

2. kick

[kodi]

6. until nations disappear, trade is supposed to increase a nation's wealth

its not free trade when $500,000,000,000 a year flow out of this country due to trade imbalances.

that is 5% per year and increasing, of the yearly gross national product that is removed from the economy.

that's not trade, that's a hemorrhaging of the nation's wealth and a massive reallocation upwards of the wealth of this nation.

[primavera]

11. "Wealth," in and of itself, isn't a meaningful indicator

Sorry, this is just one of my pet peeves, but I get so sick of economists droning on about how productivity increased as a consequence of some conversative policy. But so what? If nobody has the money to buy all of those goods, how has the situation improved? If wealth for .01% of the population goes up, but drops for the remaining 99.99%, even if total wealth has increased, why should I look favorably on that development? So the Walton family makes another $100 billion while 100,000 people lose their jobs and are reduced to living in cardboard boxes and eating rodents. Sorry, I'm not impressed by the fruits of increased wealth unless they translate out to some meaningful benefit for the majority.

[WhoCountsTheVotes]

10. When the only comparative advantage is cheap exploited labor

the "efficiency" of free trade is really just the efficiency of slavery. When comparative advantage is due to natural resources, skills of the workers, etc, then by all means trade is great.

The "Free Trade Agreements" have little to do with trade. They are the founding documents of an international anti-democractic government by and for the wealthy and their corporations, and need to be opposed.

[Commie Pinko Dirtbag]

12. REAL free

Trade should be totally free IF AND ONLY IF people transit is also totally free (like in the EU for instance). Else you have nice and cozy slave work farms for big corps masquerading as countries.

Is there a timeline, or even a proposed intention, in NAFTA to allow free transit of people between member countries?

[supernova]

13. Fair trade is fine

I enjoy having access to goods from all over the world. I enjoy that we can sell things overseas too.

But fair trade isn't the system in place now. It's pretty rapacious at the moment.

When I can, I like to buy goods from places where I know the product is made by an adult for a decent living wage. And that most of my coin will go to the actual producer, not all the middlemen along the way.

[T_i_B]

15. Globalization is a force for good

The implacable march of global commerce is due, in part, to the widening engagement of many developing countries in the trading system. And this growing economic integration reflects the fact that traditional protectionism —manifested in high tariffs and nontariff trade barriers such as voluntary export restraints, countervailing duties, and antidumping measures—has not increased significantly around the world in recent years.

The best way for poorer nations to become wealthy like us is for them to trade in those industries which they have a comparative advantage in. If somebody else can make something better then us for half the price then let them do it.

The solutions to the issues facing us require more globalization, not less.

[primavera]

16. Exactly how is globalization a force for good?

So is supporting sweatshop labor in China to provide inexpensive goods a positive thing? This is what I never understand about the free trade approach. It sounds good in theory if all nations were equally prosperous: at that point, Malwart couldn't hire people in China for slave wages and threaten to fire them if they complained about the horrific working conditions Malwart imposes upon them. But the reality is that sweatshops do exist and are likely to continue to exist as long as there are poor people in the world who have no better alternatives. Under such circumstances, deregulating trade only serves to legitimize the flow of wealth from poor countries to rich countries. For instance, do any of us here seriously doubt that starving peasants in the Amazon rainforest would cheerfully sell the forests in which they live for a fraction of their market value? Great, so we get cheap lumber, but what do they get, apart from the destruction of their environment?

I was reading recently what I thought was a very succinct and on-point criticism of free trade offered in 1931 by Yugoslav Foreign Minister Malinkovic:

The fact is that apart from economic considerations there are also political and social considerations. The old "things-will-right-themselves" school of economists argued that if nothing were done and events allowed to follow their natural course from an economic point of view, economic equilibrium would come about of its own accord. That may be true (I do not propose to discuss the point). But how would that equilibirum come about? At the expense of the weakest. Now, as you are aware, for more than seventy years there has been a powerful and growing reaction against this theory of economics. All of the socialist parties of Europe and the world are merely the expression of the opposition to this way of looking at economic problems.

We are told that we ought to lower customs barriers and even abolish them. As far as the agricultural states of Europe are concerned, if they could keep the promises they made in 1927, and could carry that policy right through, we might perhaps find ourselves able to hold our own against overseas competition in the matter of agricultural products. But at the same time, we should have to create in Poland, Romania, and Yugoslavia the same conditions as exist in Canada and the Argentine, where vast territories are inhabited by a scanty population and where machinery and other devices are employed. We could not sacrifice our people by shooting them, but they would nevertheless be killed off by famine - which would come to the same thing.

Last year, when I was in the Yugoslav mountains, I heard that the inhabitants of a small mountain village, having no maize or wheat upon which to live, were simply cutting down a forest which belonged to them and were living on what they earned by selling the wood. I went to the village, collected together some of the leading inhabitants and endeavoured to reason with them, just like the great industrial states reason with us. I said to them: "You possess plenty of common sense. You see that your forest is becoming smaller and smaller. What will you do when you have cut down the last tree?" They replied to me: "Your Excellency, that is a point which worries us as well: but, on the other hand, what should we do now if we stopped cutting down our trees?"

Okay, so this is a very dated set of observations, but I think the underlying questions still remain valid: how do you address the differences between various nations' available resources? As Malinkovic points out, not everyone has the good fortune of living in a country like Canada in which vast material resources are distributed amongst a relatively small population. Neither do all countries have the wealth to invest in educational development that would provide them with human capital to offset a shortage in material assets. How are they going to get it? Are you going to give it to them? As long as there is inequality in the assets of trading partners, trade will also be inequitable. Free trade theorists are therefore simply trying to apply a veneer of legitimacy to the rich getting richer at the expense of the poor.

[T_i_B]

17. 1931?

I'm sorry, but politicians in the 1930's of the developed world decided that tit-for-tat protectionism was a good thing and the result was anything but. The tariff rises of the 1930's deepened the global depression of the time and after the end of WWII the GATT was created in order to prevent such an economic depression from happening again.

Not only is your quote dated but the protectionist pratice of the time was a complete faliure. Come to think of it, so was $hrubya's recent attempt with the steel tarriffs. Here is an old DU article on that matter that may be of interest.

http://www.democraticunderground.com/articles/02/03/13_trade.html

[primavera]

19. Well, I admitted it was dated

But my question remains unanswered: just how is free trade between economically unequal partners supposed to achive economic equilibrium? No one in the free trade camp ever seems to want to discuss that. When you ask why a free trade initiative is a positive thing, the inevitable response is: "Well, because it promotes free trade of course!" As if that alone said something. So why is free trade someting to be desired? "Why, because it's free trade, that's why, enough said!" Well, I'm sorry, but that's not enough for me. I want to know precisely how free trade is supposed to achieve this economic miracle in which free trade advocates have so much faith.

Free trade advocates always argue, as you yourself just did, that protectionism is always a disasterous failure. How? For whom? For the Exxons of the world looking to plunder the resources of less developed nations? Pardon me while I look for my violin.

[T_i_B]

20. OK then

If India can manufacture textiles better and cheaper then we can, and the US can manufacture computers better, and cheaper then they can then it makes sense for India to specialize in textiles and for the US to specialize in computers and for the two countries to trade freely in this produce. This is Ricardo's theory of comparative advantage. It's as relevent today as it has ever been. This is only a quick answer, but it's all I have time for today.

[SaddenedDem]

21. Let's see if I follow your logic correctly....

So, in your world, since Japan can manufacture automobiles cheaper than the US, all US car manufacturers should simply close their doors and stop production.

Of course, following your logic, you would be saying that the cheap labor in Japan (none of those pesky union wages there, ya know) DEMANDS that the labor force in US automakers should simply be hung out to dry and starve, or whatever the fate to be determined by the cheap, non union labor in Japan.

That would be the basis of your claims, would it not?

[rman]

26. what if everything can be produced cheaper outside the US,

because of cheaper labor?
How exactly is outsourcing a good thing? It probably does increase some people's wealth; some more then others.
Is it not primarily to the benefit of CEOs and shareholders of big corporations? It sure isn't to the benefit of US workers since they end up with less wealth, often they are left with less then is needed for a decent living (decent as in a roof over your head, decent as in not having to choose between vegetables and health insurance).

And then there are people who have the nerve to say it's good for the economy. Kindof depends on you definition of "economy" doesn't it.

[T_i_B]

30. No

Even in the hypothetical situation that everybody could produce things cheaper then America you lot would still have comparative advantage in a number of industries where you produce products and services to a higher standard that people are prepared to pay for.

The movie industry is a good example. Lots of mplaces can produce cheap films but the US has a comparative advantage in the film trade as it has a film industry producing films that more people want to see.

Plus the US has a comparative advantage in marketing which also American brands, products and services a head start. :-) That also helps the US movie trade and none of that is cheap. it is however what a heck of a lot of people want and people are willing to pay for it.

[kcwayne]

33. Well movie production is being outsourced just like everything else

Recently there was an attempted boycott in the industry over the movie "Cold Mountain", a movie about the American Civil War that was produced in Rumania. Video production facilities are being set up in Thailand and India, all in the chase for the lowest labor cost.

US Employment levels in the industry have been dropping, and will continue to do so. The strategy is the same as furniture makers. The corporations view themselves as creative and marketing arms for product that must be produced elsewhere.

The US economy is driven by people with adequate income to purchase goods and services beyond subsistence level items such as food. The cheap labor countries are predicated on people living at levels of deprivation and dependancy that that people in the US haven't seen for over 100 years.

The US has a comparative disadvantage against serfdom. The trajectory of global free trade is requiring the US to lower its economic expectations such that we will see a complete destruction of the middle class unless other countries in the world raise their standard of living.

[T_i_B]

18. I shall continue with some Phillipe Legrain

Mr Legrain is the author of Open World: The Truth about Globalization which is as good as starting point as any if you want to learn why Globalization is a force for good.

http://www.guardian.co.uk/comment/story/0,3604,807075,00.html

Whereas companies have to attract workers and capital that are free to go elsewhere, countries can impose taxes and regulations: mighty Exxon Mobil pays taxes even in tiny Luxembourg. Supposedly footloose companies cannot, in fact, easily escape governments' writ: they are tied to places in many ways - by their customers, a skilled workforce or the good roads, schools and hospitals that our taxes pay for. Even if companies became more mobile, governments could collude to nab them, by cooperating over tax raising, for instance.

Companies that fail to persuade customers to buy enough for them to earn sufficient profits to pay shareholders and workers an acceptable return go bust or get taken over, whereas even failed states rarely disappear. The only "companies" with powers remotely comparable to those of states are the drug cartels: Colombia's earn billions of dollars a year, control parts of the country, have private armies and operate outside the law.

Wal-Mart seems puny in comparison. Indeed, because it faces fierce competition from other retailers, it has less scope to mark up its prices than the only shop in an isolated skiing village. Competition can constrain even the biggest companies - one reason why globalisation is such a good thing. Closed domestic markets, where national champions can cosy up to government, are much more likely to be monopolised than open global ones. So even though global companies are bigger than before, they are not necessarily more powerful. It is the absence of competition, not size, that gives companies clout.

Globalisation is a choice, not an imposition. Progressives should embrace it because it makes us richer - in the broadest sense - and allows governments to spend more on schools, hospitals and helping the underprivileged. It does not imply that Britain has to become like America: Sweden's economy is far more open than Britain's, yet its welfare state is second to none. Globalisation comes with several options: we can to a large extent pick and choose what kind of globalisation we want. Don't burn your Nikes: politics is not dead.

http://www.philippelegrain.com/Articles/dumpthoseprejudi.html

Developing countries are attracting investment not by lowering their standards, but because they are making the best of their comparative advantage. This does not spell doom for British workers. Provided people are equipped with skills to find another job and are protected by a decent welfare system, we can all gain from globalisation. It makes no sense to protect yesterday's jobs at the expense of tomorrow's.

Nor is it fair. How else are the poor going to get richer? It is a funny kind of socialism that stops at national borders. Surely international solidarity means buying t-shirts from Bangladesh as well as demonstrating for debt relief. The fact that seamstresses in Bangladesh are paid less than in Britain does not necessarily mean they are exploited. They earn more than they would as farmers. And however awful conditions in a Nike factory may be, they are usually worse in a local sweatshop.

Poverty is terrible. But globalisation can help. While GDP per person fell by 1% a year in the 1990s in non-globalising developing countries, it rose by 5% a year in globalising ones. The WTO is a friend of the poor. Its rules protect the weak in a world of unequal power. Unlike the United Nations, WTO rules apply to everyone - even the United States. Costa Rica challenged US restrictions on its underwear exports at the WTO - and won. Of course, the WTO is not perfect. But it is better than the law of the jungle, where might equals right.

If you hate capitalism, you will probably never support the WTO (although Fidel Castro does). But if, like most people, you believe in markets tempered by government intervention, you should think again about the WTO.

[primavera]

22. Well, I'll think about it

I'm not sure I share the author's sunny dismissal of MalWart as "puny" given that five of the world's dozen wealthiest individuals are from the Walton family which owns MalWart.

Nor am I satisfied that competition is necessarily the panacea to all ills. Just look at the aggressive tactics of companies like Microsoft which employ their muscle to buy out or, when that fails, sabotage the efforts of competing companies to provide products superior to those offered by Microsoft. Or take Enron, which used its buying power to artificially create an energy crisis in California, or the actions of eighties currency speculators who used their wealth to undermine entire national economies for their personal profit.

The free market ideal preassumes that governments are corrupt but corporations are squeaky clean people who behave only in the most commendable and responsible fashion. Sorry, but I just don't see that in real life. What I see are entities which have a strong, compelling motive to utilize their power to quash competition and to find ingenious ways of getting around the laws which exist to protect the world and its inhabitants. Ford makes a Pinto which they know contains a defect sure to kill everyone in the vehicle when a certain confluence of circumstances occur. Yet their response was to not tell anyone about the defect and weather the law suits rather than fix the problem, because it was cheaper to do so - at least, as long as you weren't one of the ones getting barbequed in their vehicles. As far as I can tell, from a free market point of view, Ford did exactly the right thing. But from a human point of view? That's an altogether different story.

Yet I am to believe that all of these corporations are going to voluntarily limit their usage of their growing wealth and power - purely out of the innate goodness of their hearts - to strictly ethical activities - even to the detriment of their personal profit - consonant with making the world a better place for everyone? And that doesn't stretch credulity for you at all? Your faith is touching.

Again, it seems to me that the problem with this whole free trade argument is that it legitimizes greed. And the truth is that greed and altruism are frequently incompatible bedfellows. And, while there are undoubtedly some who will choose to behave responsibly, there are equally undoubtedly a great many who will choose to exercise their superior power over a weaker party to win financial advantage. Holding that condition forth as a natural solution to all problems is to say that might makes right, that superior strength is the only authority one needs to justify one's actions. Then why bother passing laws at all? Why not just go back to the jungle where the strong prey on the weak without pretense?

[T_i_B]

25. My reply

The articles I posted do not deny the need for a wee bit of regulation.

http://www.guardian.co.uk/comment/story/0,3604,807075,00.html

Even if companies became more mobile, governments could collude to nab them, by cooperating over tax raising, for instance.

Of course, companies sometimes have an undue influence on governments. So money and politics should be kept as separate as possible and government conducted more openly. Yet business has a right to lobby governments, just as trade unions, environmental groups and individuals do. This does not imply that governments are companies' lackeys.

Governments can - and do - tame the corporate leviathans. The European Commission stopped giant General Electric from buying Honeywell. The US government nearly broke up Microsoft, which is still being prosecuted by US states and investigated by the European Commission. Business has to abide by a battery of legislation on workers' rights, product liability, health and safety, environmental protection and much else. Where governments fear to tread, lawyers do not: each year people start almost 2 million lawsuits against American companies, which pay out damages of around $150bn a year. Last but not least, taxes on company profits have steadily risen as a share of rich OECD countries' GDP: from 2.2% in 1965 to 3.3% in 1999. If businessmen are running the show, they must be masochists.

And here is Paul Krugman with some more stuff.

http://www.nytimes.com/2004/02/27/opinion/27KRUG.html?hp

As to competition, it is not the cure-all for everything, but it means that companies have to do more for their employees and most of all their customers if they want to keep them and to keep in business. The alternative to competition is monopoly, which allows companies to control the market unchecked and which can be used all too easily to shaft everyone else.

[rman]

27. then you agree that globalization-as-we-know-it is no good

since there isn't enough regulation, thanks to the efforts of those who benefit most from deregulated trade - the big corporations, who always want less regulation and usually get their way because they have the most political influence.

[primavera]

29. Okay, so now I'm really confused

Did I hear you incorrectly, or wasn't the thrust of what you just said that corporate activity does in fact need to be regulated? So what are we arguing about? My impression was that you and other free trade advocates were in favor of getting rid of government regulation of commercial activity, yet, from what you just said, it sounds like you acknowledge that corporations can't be relied upon to behave responsibly without regulation. I'm sorry, I'm really not trying to be obtuse, but I'm suddenly having a hard time figuring out where you stand on this issue. But thank you very much for your repeated efforts to explain it to me, I'm sorry I'm so slow on the uptake. :)

[wuushew]

23. Don't ignore the environmental impact of globalization

Everybody in China and India also wishes to drive cars. We in the United States are responsible for excessive over-consumption. While much of the rest of the world is responsible for overpopulation. Overconsumption is worse on balance than overpopulation, but combining the two is a recipe for disaster.

While economic growth would eventually lower the rest of the worlds population this I fear would happen too slowly in relationship to peak oil. I do not endorse poverty but realisticly poverty is more sustainable than our fossil fueled society.

[T_i_B]

24. There is a globalist solution - KYOTO!!!

:evilgrin:

[rman]

28. yeah, it's working like a charm. or does it.

-

[WhoCountsTheVotes]

31. "Nations" aren't doing the trading, nor getting wealthy, "corporations" do

Everyone pay attention to this rhetorical trick.

"The best way for poorer nations to become wealthy like us is for them to trade in those industries which they have a comparative advantage in."

So, Cambodia has cheap labor. Nike moves a plant to Cambodia, where there is a "comparative advantage". Nike cuts its own costs, but can leave its prices where they are in the western world. They pay Cambodians barely more then they were getting. Then Nikes moves to another cheap labor country.

How has "Cambodia" gained? They haven't. They never owned the factories, they never owned the "intellectual property" they just had their people rented temporarily.

That's NO way to gain wealth.

Watch the rhetorical trick: you have to switch "the corporation gains wealth" to the "country gains wealth". That way when a few people make lots of money, you can pretend it was a majority of people making money.

[T_i_B]

32. "Nations aren't doing the trading, nor getting wealthy, corporations do"

So...following your line of argument any economic activity by corporations does not produce economic growth, only economic activity by governments? :crazy:

Hate to tell you this, but that argument is only really relevent in communist countries where everything is nationalized. Outside of those countries it tends to be business who do the lions share of economic activity, and that is where the economic growth comes from.

Governments and international bodies such as the WTO have a role in all this as they set the rules but by the same token if Nike have a factory in Cambodia then that is part of Cambodia's wealth. If the people of Cambodia are getting jobs and more money out of Nike (because these "sweatshops" do pay more than working as peasent farmers) then yes, it is more than just the executives who benefit.

[WhoCountsTheVotes]

34. communism? oh give me a break - watch the rhetorical trick in action...

"So...following your line of argument any economic activity by corporations does not produce economic growth, only economic activity by governments?" :crazy:

Did you read the post? Perhaps try reading it again?

"Hate to tell you this, but that argument is only really relevent in communist countries where everything is nationalized. Outside of those countries it tends to be business who do the lions share of economic activity, and that is where the economic growth comes from."

Pay attention, everyone - they don't want to talk about "wealth" they want to talk about "growth" (and they want to talk about communism too). If the GDP raises every year, that's growth. You can have high GDP growth and the majority of people get poorer.

Thankfully_in_Britain, it doesn't matter whether it's labor hired by corporations or labor hired by government, growth is growth. You can have high growth and the people doing the work can have stagnant living standards.

Now why are you talking about communism again? Are you some sort of commie?

[IrateCitizen]

35. My comments after reading through the thread...

First off, even as a self-described "fair trader", I am well aware of the benefits that trade can bring a developing economy. For proof, just look to the examples of Japan, South Korea, and most recently, China. All three countries have used international trade as an engine for significant economic expansion.

But, the questions arise when you get down to the details. For instance, all three countries have followed a path that actually runs OPPOSITE to what the "experts" preach -- protection of domestic industries from foreign competition, while at the same time focusing on products for exports. Western trade ministers and economists (such as those with the IMF) like to tout the myth that opening up one's economy to foreign competition (even if the competition is overpowering to your own industries) is the key to growth. Surprisingly (or perhaps not), those countries that have most closely followed this advice have seen their growth either stagnate, or have had the bottom fall out completely.

One of the major problems with the current setup is that the organizations developing trade policy are heavily influenced (and in some instances practically controlled) by business interests of developing nations. That is why you have numerous examples of developing nations farm products being shut out of US and EU markets, while the US and EU try to force those developing nations to open up their financial markets to currency speculation. So long as the game is rigged in this manner, we will continue to see "globalization" as a force for evil, rather than properly seeing it as a neutral tool that can be used for EITHER good or evil.

Of prime concern with regards to international trade is environmental issues. The current framework does little -- if anything -- to address the gathering environmental crisis coming from a combination of rapid deforestation, mass extinction and global warming. Those who promote Kyoto as a solution to these problems fail to recognize the reality that, even though Kyoto was a step in the right direction, it was so watered down by Western business interests by the point of its final product that it ended up being only a token measure. Also of concern is the tremendous reliance on the flawed theory of comparative advantage, especially with regard to the significant fossil fuel emissions that are necessary to cart all of this stuff halfway around the world and back.

In all, both sides of this issue need to realize that it is not, nor can it ever be, a "one-size-fits-all". Industrialized nations have different needs with regards to trade policy than developing ones. And the coming environmental crisis requires all nations of the world to work together in full cooperation of sharing new technologies (and the funds required to implement them).

Perhaps most of all, this phenomenon of "globalization" needs to coincide with a vast deceleration of the commericialization of our lives, and a return to simpler lives with a higher true quality of life. Based on the limited resources of our already overstretched planet, for developing nations to enjoy an increase in their living standards, such measures will ultimately be necessary.