On Trade

by truenorthsaf

Were a time traveller from twenty years ago view the state of politics today he or she would likely be forgiven for being confused. Only a mere two decades ago, in the golden days of the ’90s, free trade was the undisputed golden calf of politics in the Western world. It was one of the unquestioned foundations of political discourse that the more trade there was, and the more free it was, the more better off all parties involved would be; the only blasphemers to this gospel being a few militant trade unionists and college Marxists on the left and cranky Ross Perot types on the right.

Oh how times have changed, as in the year 2016 we witness a state of affairs where the Democrats are fielding a nominee (whose husband in his term as President heralded the signing of NAFTA) whose opposition to free trade is outdone in vitriol only by that of her Republican opponent, the party which historically has been the greatest cheerleader of the breaking down of tariffs and trade barriers. This goes beyond a mere changing of places to a total plunging through the looking glass into a wonderland of opposites, with Donald Trump gleefully playing the role of Mad Hatter and Hillary Clinton making a most fitting Queen of Hearts.

On reflection though, this should not be that surprising. The fundamentals needed for this tremendous backlash against free trade have always been there, evidenced by the surprising strength shown by protectionist candidates from Perot to Buchanan over the years; never quite able to achieve the ultimate prize but coming far closer than the comfort of the establishment would care for. Despite the overwhelming consensus that “rising tides lift all boats” and creative destruction being  “a net win” for all parties involved, a lingering uncertainty has always hovered in the air like a dose of humidity before a thunder storm finally brought to a head by the hurricane that was the global financial crisis and the decade of stagnation that has followed.

Before going further I would like to clarify a few things, lest I be mistaken for one of those aging Marxist academics preaching the overthrow of the international capitalist system. It is beyond dispute that trade has innumerable benefits to society has a whole. Free trade brings about cheaper consumer goods and services, allowing everyone to enjoy a higher standard of living; because of it even the poorest of households can afford goods such as televisions and computers that once were luxuries of only the few. It takes the drive each of us have to better ourselves and rise in position and affluence and harnesses it in the pursuit of greater livelihoods for all.

The problem is that what has also become beyond dispute is that, as it is with all things, along with the positives there are also negatives that come from free trade. What is particularly difficult with this is that while the positives of trade are distributed evenly for the most part amongst the populace, the negatives tend to disproportionately fall on only a small segment of it and for those unfortunate enough to fall into this category the harm tends to far outweigh the good. We all can buy cheap Sony televisions but only a few of us lose our jobs to globalization.

For fifty five year old factory worker with a mortgage and two kids in college, losing his job due to outsourcing is hardly made up for by the fact he can buy cheap t-shirts from Bangladesh and assorted other crap made in China. The options these people face are often few and rarely pleasant, usually either a life on the dole or precarious part time work bereft of benefits or job security. It’s all very well to preach the opportunities of the new knowledge economy, as politicians of the conventional political spectrum often do. These opportunities tend to only present themselves to the youthful, the educated, and the skilled; the older, the unexceptional, and the average often find themselves completely shut out.

I will confess I feel a certain affinity for the plight of these poor folks. This may be somewhat surprising, given I’m from a fairly priviledged upbringing, attained a fairly respectable education for myself when I was younger, and work in an industry that has been better protected than most from the upheaval of globalization (in short everything’s that is necessary to be adequately successfully in the new economic reality of the modern world). Largely it’s due to my own real world experiences. I’ve never been poor, but my first few years out of school were certainly stressful financially and throughout all of it I was keenly aware that had any of the aforementioned factors not been there I could easily have found myself in a far worse position than I had the good fortune to be in at the time (and even then I always had the security of knowing that if worst came to worst I would always have the bank of Mom & Dad to fall back on). This left me with a particular affinity for those without my own fortunate circumstances.

While I’ll credit Donald Trump for at least forcing this issue into the national conversation through his own sheer brazenness, I remain unconvinced that his proposed solutions of renewed protectionism would actually work (and even if they did would likely be accompanied by a corresponding decline in standards of living and rises in price of consumer goods). So what is to be done? I honestly do not know. I’ve heard any number of suggestions, from massive investments in retraining programs and education to a universal basic income to simply embracing the gig-economy and accepting that a section of society will have to live with a more precarious and less opulent lifestyle than was widely available in the past.

What I do know, or at least ferverently believe, is that there is no problem that human ingenuity cannot find an answer to. To do that, however, will require us to face this issue head on and stop simply living in comfortable denial. It will require us to actual engage in a national conversation on the question of what must be done to address the ills of globalization so we might all be able to enjoy the benefits of it. It will require looking outside the Overton Window of conventional political consensus, and the forswearing of more than a few sacred cows. To do nothing, however, will only guarantee that we accomplish nothing. That is not an option.