This is part one of a multi-part series addressing the issue of free trade and the arguments used against it. In this section I take on the historical protection of manufacturing jobs by opponents of free trade. Future sections will address environmental concerns, concerns of 3rd world exploitation, and an honest appraisal of the evidence in favor of and against free trade.
The recent debate about free trade bubbling up in Montana politics is the perfect opportunity to discuss this highly misunderstood issue. Montana Gubernatorial hopefuls Don Pogreba and Jason Neiffer have criticized Max Baucus, Montana’s free trading senior Democratic senator, as supporting a policy of:
Enhancing the bottom line of multinational corporations who operate above the law and whose profits rarely make it to the hands of workers who produce them? Sane fiscal policy.
Though they criticize Senator Baucus for misrepresenting opponents to free trade, the above quote shows that their campaign has also misrepresented the arguments in favor of free trade as well as missing an opportunity to move the Democratic party forward in its thinking on this issue.
This is not surprising–ever election is marred by a consistent misunderstanding of free trade. Politicians on the left use American fears about job security, the environment, and exploitation of the 3rd world to frame free trade as an exploitative and hurtful practice–often favoring protectionism as a solution. At the same time the right unilaterally supports free trade arguing that pure free trade is the only trade policy to have on the basis of economic freedom–even if it is sometimes exploitative or imperfect.
Of course not all of those on the left are against free trade–Senator Baucus is a Democrat–and some bloggers on the left, Jay Stevens over at Left in the West in particular, are actually supportive of reopening the discussion of free trade and searching for a middle ground. I think all Democrats would be well advised to welcome a discussion of how to:
encourage trade, but… make sure our trade agreements are fair, that they benefit American workers and businesses, not just multinational corporations looking for cheap labor and a way to trample over workers’ rights and avoid environmental standards.
Before we can move forward in our thinking on free trade we need to look at the historical basis for the Left’s rejection of free trade. Pogreba and Neiffer trot out this historical justification that still drives left opposition to free trade today:
concern about stagnant or even declining wages for American workers who struggle to find manufacturing jobs
This objection is based on a vision of the world centered on human intensive labor and wide scale industrial production. The US Government publication “Outline of the US Economy” provides a really good description of the diminishing role of labor in the traditional manufacturing sense:
Manufacturing has declined in relative importance, and the service sector has grown. More and more workers hold white-collar office jobs rather than unskilled, blue-collar factory jobs. Newer industries, meanwhile, have sought highly skilled workers who can adapt to continuous changes produced by computers and other new technologies.
If you want numbers to prove it, enjoy:
Service-related industries accounted for 24.4 million jobs, or 59 percent of non-farm employment, in 1946. By late 1999, that sector had grown to 104.3 million jobs, or 81 percent of non-farm employment. Conversely, the goods-producing sector — which includes manufacturing, construction, and mining — provided 17.2 million jobs, or 41 percent of non-farm employment in 1946, but grew to just 25.2 million, or 19 percent of non-farm employment, in late 1999.
America is no longer a manufacturing economy. Manufacturing jobs are protected out of a nostalgia for the hayday of workers’ movements, and having been the focus of labor activism for decades, the compensation for these jobs is artificially inflated. Resorting to protectionism to hold on to this distorted version of the labor market is damaging for a number of reasons…
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