Wednesday , May 18 2022
Home / Real-World Economics Review / There is no political constituency for free trade, it’s just a term used to justify screwing workers

There is no political constituency for free trade, it’s just a term used to justify screwing workers

Summary:
From Dean Baker It is amazing how frequently policy types talk about “free trade” as though it is actually a policy anyone is interested in promoting. The reality is that what passes for free trade is a policy of removing barriers to allow low cost manufactured goods to enter the United States without restrictions. This puts downward pressure on the pay of manufacturing workers. Since manufacturing had historically been a source of high paying jobs for workers without college degrees (it is no longer), the loss of these jobs out downward pressure on the pay of non-college educated workers more generally. A policy of genuine free trade would mean eliminating barriers that limit trade in physicians’ services as well as the services of highly paid professionals more generally. It would

Topics:
Dean Baker considers the following as important:

This could be interesting, too:

WARREN MOSLER writes Consumer sentiment, NY manufacturing, oil prices

Stavros Mavroudeas writes Βιβλιοπαρουσίαση «Πιάνοντας τον Ταύρο από τα Κέρατα» – Τρίτη, 17-55-2022, 7μμ, Αμφιθέατρο «Ιωάννης Δρακόπουλος» Κεντρικό Κτήριο Πανεπιστημίου Αθηνών

Editor writes Weekend read – MMT, post-Keynesians and currency hierarchy: Notes towards a synthesis

John Quiggin writes The Thirty-Nine Steps

from Dean Baker

It is amazing how frequently policy types talk about “free trade” as though it is actually a policy anyone is interested in promoting. The reality is that what passes for free trade is a policy of removing barriers to allow low cost manufactured goods to enter the United States without restrictions. This puts downward pressure on the pay of manufacturing workers. Since manufacturing had historically been a source of high paying jobs for workers without college degrees (it is no longer), the loss of these jobs out downward pressure on the pay of non-college educated workers more generally.

A policy of genuine free trade would mean eliminating barriers that limit trade in physicians’ services as well as the services of highly paid professionals more generally. It would also mean weakening or eliminating patent and copyright monopolies, which can raise the price of protected items by many thousand percent above the free market price.

There is no political constituency for removing these protectionist barriers, as can be clearly seen by the fact that no major political figure is advocating this path. Instead, there is a strong political constituency, which includes many self-described liberals, for a trade policy designed to reduce the pay of non-college educated workers.

It is politically more salable to describe this policy as “free trade,” but it is a lie. Reporters should not describe it that way if they are trying to be objective.

Dean Baker
Dean Baker is a macroeconomist and codirector of the Center for Economic and Policy Research in Washington, DC. He previously worked as a senior economist at the Economic Policy Institute and an assistant professor at Bucknell University. He is a regular Truthout columnist and a member of Truthout's Board of Advisers.

Leave a Reply

Your email address will not be published. Required fields are marked *