Wednesday, October 10, 2012

The Great Betrayal 3

I have three items for today's write-up on Pat Buchanan's The Great Betrayal: How American Sovereignty and Social Justice Are Being Sacrificed to the Gods of the Global Economy.

1.  Edward Gresser argues in Freedom from Want that free trade leads to peace, since people are less likely to attack those with whom they trade.  One thought that was in my mind, which I did not share, was this: Why couldn't a country attack a country with which it has a trading relationship?  Then, it could just plunder the other country's resources, without having to give something of its own to receive them.  There may be something to my thought, but I should also remember that it may cost a country money and resources to conquer and rule another country, and so perhaps trade is better than conquest.

Pat Buchanan disputes the mantra that free trade leads to peace, as he notes examples to the contrary.  Britain engaged in free trade in the nineteenth century, yet it was involved in numerous wars.  The United States was a free-trade zone, but that didn't stop the Civil War.  In 1914, Germany attacked Russia, which bought a lot of German goods, and Great Britain declared war on its customer Germany.  In the 1930's, Japan attacked China and the U.S., though it traded with them.  Hitler invaded Stalinist Russia, a huge source of "food, oil, and raw materials" for Germany (page 61).

2.  One question that is in my mind as I read critiques of free trade is this: Why don't all American manufacturing companies move overseas, if it's so much to their advantage to do so?  The fact is that they don't, for there are still manufacturing plants in the U.S.  Buchanan, at least in my latest reading, does not answer this question head-on, but he does mention advantages for companies that stay in the United States: more productive labor, and also better equipment.  (But why couldn't companies take that better equipment overseas?)  The reason, according to Buchanan, that companies move overseas is that it's cheaper, since the workers can be paid less.  Buchanan (a conservative) also takes a swipe at big government policies that (according to him) oppress companies in the U.S. and encourage them to outsource.

3.  This third item is actually not from my latest reading, but from a previous reading.  Why does Buchanan think that it's better for the U.S. to have manufacturing jobs as opposed to a large number of service jobs?  On page 58, Buchanan states:

"Manufacturing is the key to national power.  Not only does it pay more than service industries but the rates of productivity growth are higher and the potential of new industry arising is far greater.  From radio came television, VCRs and flat-panel screens.  From adding machines came calculators and computers.  From the electric typewriter came the word processor.  Research and development follows manufacturing."

For Buchanan, manufacturing generates research and development, which coincides with economic growth.  I think that it's also important to recall what Arianna Huffington said: we need manufacturing jobs because how can we export stuff if we're not producing it?

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