Saturday, December 26, 2009

why "free trade" sucks

If you read only read one article this year on the problems of "free trade," read this one: "How the status quo can kill: the example of free trade" by Tony Wikrent over at Corrente. (Hat tip to Ian Welsh for the link). The post is brilliant.

Money quote (on the problems of outsourcing aircraft repair to India):

“Oh, I used to make almost $30 an hour. Same job. But they figured they could do it cheaper overseas. They were sending the airplanes to India for a couple of years. But they were fucking the job up so bad over there, it was taking them a week or more to get it done. We can get ‘em in and get ‘em out in a day and a half. Over there, lots of times, the plane couldn’t even take off. They had to take the whole wing apart again, to find out what was wrong. Just stupid shit. Motors weren’t connected. Positive wires were crossed with negatives. Brackets were missing. We found a wrench in one wing, which had gotten banged around, and kinked a hydraulic line pretty bad. I remember one plane came in, we got the skin off, and there were two bolts left holding the outer flap on.”

Of course I asked. There’s supposed to be eight.

Back in 1992, when the debate over NAFTA was heating up, I found the academic arguments in favor of "free trade" to be compelling. Now 16 years later, it's clear that NAFTA and other "free trade" agreements are a complete disaster that have destroyed our manufacturing base and thrown an entire generation of men-with-only-a-high-school-diploma (and their families) into poverty.

2 comments:

chaining_lighting said...

I too once supported free trade.

The keynesian theory of competitive advantage only works if countries have offsetting competitive advantages. when one country has all the advantage through an artificially cheap labor force, then free trade simply destroys you.

RFK Action Front said...

Hi Chaining Lighting:

Thank you for your thoughtful comment!