Sunday, October 7, 2012

Freedom from Want 7

I finished Edward Gresser's Freedom from Want: American Liberalism and the Global Economy.  At the present moment, I can't find everything in the book that I want to write about, so this post won't be well-documented.  But I'll do the best that I can writing from memory.

In my latest reading, Gresser presented freer trade as a path to peace in the Middle East.  According to Gresser, countries in the Middle East do not trade much with each other, plus high unemployment in that region encourages some in the Middle East to become terrorists.  But, according to Gresser, freer trade can foster peace by making countries beneficial to one another, and it can also bring employment to Arab nations.  While Gresser acknowledges that Saudi Arabia is a heavy exporter of oil, he says that only a few rich Saudi families profit from that, but enhancing trade in other fields can employ a broader number of people.

In either my latest reading or an earlier reading, Gresser was continuing to argue against the notions that protectionism helps the U.S. economy and that freer trade encourages environmental damage.  For the first notion, if I recall correctly, Gresser contends that companies are not helping themselves or the U.S. economy when they hold on to inefficiency and seek to protect themselves from competition.  I forget how exactly Gresser supported this claim, but, earlier in the book, he quoted John F. Kennedy's statement that companies seeking to dodge competition "are endangering the profits and jobs of others...and in the long run their own economic well-being because they will suffer from competition in the U.S. inevitably, if not from abroad----for, in order to avoid exertion, they accept paralysis" (Kennedy's words).  In short, competition will catch up with companies, even if they seek to avoid it.  Regarding the environment, Gresser makes the point that protectionism inhibits the development of environmental-friendly technology by making it more costly.

Near the end of the book, Gresser addresses the question of how to help U.S. workers who lose their jobs.  Gresser says that losing one's job is especially hard in the U.S. due to a weak social safety net.  In Japan, workers don't lose their health insurance or pension when they lose their jobs, but there are a lot of U.S. workers who lose their health insurance once they become unemployed.  I tend to agree with Gresser that free trade can work better when it coexists with certain leftist policies.

Overall, this was a good book.  But I wish that Gresser addressed the issue of whether or not globalization pushes down the wages of U.S. workers.

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