In my latest reading of War on the Middle Class: How the
Government, Big Business, and Special Interest Groups Are Waging War on
the American Dream and How to Fight Back, Lou Dobbs criticized free trade and outsourcing.
Regarding
free trade, Dobbs argues that the current system is not balanced, for
we (by which I mean the U.S.) buy other countries' goods more than they
buy ours, resulting in a trade deficit. Not only are our tariffs lower
than that of some of our trading partners, but there also are many in
some of these countries who are too poor to buy our products. Moreover,
Dobbs contends that NAFTA has not ameliorated poverty in Mexico. Dobbs
also talks about how the World Trade Organization infringes on American
sovereignty. On page 105, Dobbs states, "The WTO is currently
assisting Wal-Mart in taking on state policies, by helping the world's
biggest retailer get concessions opposed by local governments."
Regarding
outsourcing, Dobbs states that it has resulted in the export, not only
of manufacturing jobs, but also of the service and tech jobs that free
trade was supposed to create in the United States. Arianna Huffington
made the same point in Third World America, blaming this
problem on the United States' lack of competitiveness in education.
According to Dobbs, the jobs that will have the greatest demand include
waiters and waitresses, janitors and cleaners, food preparers, hospital
workers, cashiers, customer-service representatives, retail
salespeople, general and operational managers, and postsecondary
teachers----jobs that cannot be outsourced. Dobbs does not
believe that the jobs that people get after losing their manufacturing
jobs pay as much, and Dobbs holds that, notwithstanding the cheap goods
that free trade has provided to people in the U.S., employees in the
U.S. are not better off, and that is due to the stagnation of their
wages.
I'm planning on reading more about free trade after I finish Dobbs' book: Edward Gresser's Freedom from Want: American Liberalism and the Global Economy, and Pat Buchanan's The Great Betrayal: How American Sovereignty and Social Justice Are Being Sacrificed to the Gods of the Global Economy.
My impression (and I am open to correction) is that the former book
defends free trade from a liberal perspective, whereas the latter
critiques it. I'm curious about how free trade has impacted the United
States and the rest of the world, and what the solution could be. While
Dobbs is probably correct that free trade has resulted in the
stagnation of wages, do we want to create a situation in which other
countries are no longer a market for our goods (at some level), or
prices go up due to protectionism resulting in lower productivity?