Reply #11: Yes, protection has no downsides [View All]

[CounterCoulter]

Some of my yippie friends who love "socialism" (even though they can't define the term), Nader and hate the "global economy" were arguing with me as to why NAFTA was bad the other day.

The problem with the anti-NAFTA people is that they don't understand the problems with protection. Sure it helps those protected, with free trade, both trading countries can increase their GDP--and those layed off don't necessarily have to lose. In reality they (those losing their jobs) do lose because Walmart "Up by the bootstraps" Nation (the sheeple) no longer believes in redistribution of the wealth. The Right has them convinced that Bill Gates efforts were genuinely worth 100 Million times that of the average person's efforts (but that is a rant for another day...).

If the U.S. would merely take some of it's efficiency gains from free trade and use them to fund things like worker retraining, the labor of people who lose their jobs due to international competition could be diverted to industries in which the US has a comparative advantage.

Many times it blows my mind how yippies and leftists don't understand comparative advantage and free trade. I'm not naive to think that globalization doesn't have some ugly downsides for people in the third world, but many times my Green/Yippie friends act as if comparative advantage is categorically evil--when in fact specialization is what allows us to enjoy the level of material wealth that we now enjoy.