The Trade-offs Of Trade
Trade among nations is a fundamental aspect of human history and economic prosperity
Ignorance really isn’t bliss at all. It might seem like it is, but the reality hidden behind ignorance remains firmly in control. Thus, the ignorance firmly attached to right-wing populism both here and on other continents regarding globalization, trade agreements and immigration is of, by and for those who prize such ignorance by pretending it’s a “solution” to a “problem” — one that has been beneficial to hundreds of millions around the world.
For much of the twentieth century, most items sold in stores in this country were labeled made in U.S.A. Manufacturing was at least one-third of the country’s gross domestic product, and those who worked in factories producing goods often — if union members — made good salaries. Many became members of the middle class: owning homes, taking vacations and sending their children to college. But as the century entered its last several decades, it became less expensive to ship goods from countries with lower labor costs by utilizing large-scale shipping container technology (which had been around for many decades but was developed and standardized as we know it now n the mid twentieth century).
Like so many topics, trade is complex. Opinions about it vary from positive to negative depending on one’s self-interest and perceptions, but the reality is that globalization has transformed the economies of many countries. Globalization has vastly changed trade overall and also resulted in large-scale trade agreements (free trade) that are regarded as highly beneficial by some and as destructive by others. Supply chains are now long and complicated, with parts for products arriving at assembly plants from many different countries as needed.
One of the consequences of all this is that manufacturing in the U.S. is now about 10 percent of GDP, and while some promise to change this if elected, the reality is that manufacturing capacity worldwide is well above what is actually needed. This means that bringing manufacturing back here will be very limited at best, with little financial incentive. Of course, while globalization has brought prosperity to many in many countries, it has had the negative effect of reducing such employment for many who used to work in manufacturing, particularly those with high school diplomas who therefore have limited opportunities already.
True economic revolutions include disruptions that create new opportunities for some but undermine the economic status of others. The trade-offs are unavoidable. Pretending that ending free trade while waging tariff wars will “fix” this reality is no more sensible than voting to leave the European Union because it will bring back the past (for older residents of the UK). The past is just that, and is where it belongs. For younger citizens, the future will be, and should be, very different.
This is where the role of government is essential. While it wants to promote economic growth — which includes trade — that will benefit the greater good, it also needs to help those who are disrupted economically by the results. Immigration is a bit different. It too creates economic growth, and many immigrants start their own businesses. Others accept work that native-born citizens consider unacceptable. But wages for service sector and other job categories can be negatively impacted if minimum wages aren’t set to ensure this is minimized. Government is not the problem but the solution.
If the first corollary of history is that every nation acts on its own behalf, the second might be that trade among nations is a fundamental aspect of human history and economic prosperity. Then there’s immigration, which has enriched and diversified cultures for centuries. Those who become isolationists do not have history on their side, and the globalized economic network that we have now is not going away. If the UK cannot survive and prosper without trade with the EU, and it can’t, then why should those here think we can simply pretend the rest of the world isn’t essential for our own economic well-being. The balance of trade is simultaneously dynamic and uneven. It ebbs and it flows, but it matters.
Enlightenment comes from open minds, ignorance from closed ones. These are not simply destiny but how we choose to be. If life’s inherently unfair, and it is, then we succeed anyway by accepting what is and then working on making it better. Those who pine for the good old days are living an illusion. Life has never been better…or worse. Which is to say, it is what it always has been. Closing the door and locking it changes nothing other than making things worse for no good reason. That’s the price of ignorance.
