5 ms·

The more I look at the effects of globalization, the more I think free trade is akin to Reagonomics. Basically a huge scam for everyone in a developed country,

by seneca 5y ago

The more I look at the effects of globalization, the more I think free trade is akin to Reagonomics. Basically a huge scam for everyone in a developed country, except the owners of megacorporations. It destroys our ability to manufacture, destroys our middle class, makes us dependent on a geopolitical enemy, destroys any chance of local competition, and in return we get cheap garbage goods. In reality, what is happening is arbitrage of environmental and labor protections. More and more I think developed nations need to maintain an index that rates every country on these grounds, and strictly enforced tariffs based on that index. I'm all for other countries being able to specialize and out compete, but slave-like working conditions and destroying the environment shouldn't be competitive advantages on a global market.

knubie 5y ago
There is an upside to integrating global economies which is far less conflicts are taking place between counties now.
robotresearcher 5y ago
> we get cheap garbage goods ... along with many of the most high-quality, low-tolerance manufactured parts and products ever made.
- Jensson 5y ago
  Yeah, China today makes world class products. I started buying Chinese smartphones, they work great, doesn't come with much crapware and are super cheap per performance. I don't see the point in paying extra for a western company to take basically the same phone, put a brand on it and crap in it.
cycrutchfield 5y ago
Sorry, why are the only beneficiaries “owners of megacorporations”? What about the average family who can buy a TV for $500 instead of for $1000? Do they not benefit from the cost of goods being lower due to global trade?
- toss1 5y ago
  In the instant of the purchase, they benefit, sure. Overall, they have lost massively, at least in the USA. The purchasing power of the dollar has declined by over a factor of seven in the last 50 years since 1970 [1]. Real wages have remained stagnant, and the wage scale has declined such that the actual minimum wage today is $7.25, up from $1.60 in 1970, but the inflation-adjusted minimum wage would be $11.05 [2]. So, if ALL prices had declined by half as have electronics, they'd be only a bit marginally better off. But most prices have not declined as much, and have risen much more, housing, healthcare, food, etc. The net result is that we exported the former middle-class lifestyle to China, in exchange for importing and having to compete with their low wage lifestyle. Not a smart bargain. [1] https://www.in2013dollars.com/us/inflation/1970?amount=1 https://www.in2013dollars.com/us/inflation/1970?amount=1 [2] https://www.dollartimes.com/inflation/items/1970-united-states-minimum-wage https://www.dollartimes.com/inflation/items/1970-united-stat...
  - cycrutchfield 5y ago
    Hmmm, this seems like a topic that economists have likely studied. Why don’t we ask them? > Economists find that—after taking both the winners and losers into account—trade has net benefits for society. In other words, the benefits outweigh the costs. This does not seem obvious to many people because the costs are often more visible than the benefits. For example, it is relatively easy to identify businesses or industries that have shut down because of trade. Likewise, it is relatively easy to identify people who have lost jobs in those industries. Perhaps you know someone who has lost a job in this way. However, it is more difficult for consumers to identify how much cheaper their car, clothing, and food are because of international trade. In addition, the lower prices paid by consumers and businesses mean they have more money to spend on other goods and services. As a result, there are businesses that have experienced more growth as a result of that spending, which would not have happened without trade. But, again, those gains can be difficult to identify. https://research.stlouisfed.org/publications/page1-econ/2017/11/01/does-international-trade-create-winners-and-losers/ https://research.stlouisfed.org/publications/page1-econ/2017...
    - 5y ago

by seneca 5y ago

knubie 5y ago

There is an upside to integrating global economies which is far less conflicts are taking place between counties now.

robotresearcher 5y ago

> we get cheap garbage goods ... along with many of the most high-quality, low-tolerance manufactured parts and products ever made.

Jensson 5y ago
Yeah, China today makes world class products. I started buying Chinese smartphones, they work great, doesn't come with much crapware and are super cheap per performance. I don't see the point in paying extra for a western company to take basically the same phone, put a brand on it and crap in it.

cycrutchfield 5y ago

Sorry, why are the only beneficiaries “owners of megacorporations”? What about the average family who can buy a TV for $500 instead of for $1000? Do they not benefit from the cost of goods being lower due to global trade?

toss1 5y ago
In the instant of the purchase, they benefit, sure. Overall, they have lost massively, at least in the USA. The purchasing power of the dollar has declined by over a factor of seven in the last 50 years since 1970 [1]. Real wages have remained stagnant, and the wage scale has declined such that the actual minimum wage today is $7.25, up from $1.60 in 1970, but the inflation-adjusted minimum wage would be $11.05 [2]. So, if ALL prices had declined by half as have electronics, they'd be only a bit marginally better off. But most prices have not declined as much, and have risen much more, housing, healthcare, food, etc. The net result is that we exported the former middle-class lifestyle to China, in exchange for importing and having to compete with their low wage lifestyle. Not a smart bargain. [1] https://www.in2013dollars.com/us/inflation/1970?amount=1 https://www.in2013dollars.com/us/inflation/1970?amount=1 [2] https://www.dollartimes.com/inflation/items/1970-united-states-minimum-wage https://www.dollartimes.com/inflation/items/1970-united-stat...
- cycrutchfield 5y ago
  Hmmm, this seems like a topic that economists have likely studied. Why don’t we ask them? > Economists find that—after taking both the winners and losers into account—trade has net benefits for society. In other words, the benefits outweigh the costs. This does not seem obvious to many people because the costs are often more visible than the benefits. For example, it is relatively easy to identify businesses or industries that have shut down because of trade. Likewise, it is relatively easy to identify people who have lost jobs in those industries. Perhaps you know someone who has lost a job in this way. However, it is more difficult for consumers to identify how much cheaper their car, clothing, and food are because of international trade. In addition, the lower prices paid by consumers and businesses mean they have more money to spend on other goods and services. As a result, there are businesses that have experienced more growth as a result of that spending, which would not have happened without trade. But, again, those gains can be difficult to identify. https://research.stlouisfed.org/publications/page1-econ/2017/11/01/does-international-trade-create-winners-and-losers/ https://research.stlouisfed.org/publications/page1-econ/2017...
  - 5y ago