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| Image by JJ Jordan from Pixabay |
This is why a minimally regulated market works better than a highly regulated market. This is why when you go to the supermarket most of the thousands of competitively priced products they carry are usually in stock — literally millions of specialists pursuing their own self-interest and freely trading with each other.
You’ll win some, you’ll lose some, and some will have mixed results. Take comfort in the fact that when you win one the other side may hate and resent you, or at least be thoroughly depressed, often without even having ever actually met you. The entrepreneur that went bankrupt because you didn’t think their world-changing product or concept was worth your money comes to mind.
There are no unemployment checks for failed entrepreneurs.
Of course, if you fail on a large enough scale The Fedrl Gummit may step in and save your bum. And that’s not fair — unless of course, your job or business is on the line. But that’s not how it’s supposed to work, and you can’t count on it.
Adam Smith said, “Consumption is the sole end and purpose of all production; and the interest of the producer ought to be attended to, only so far as it may be necessary for promoting that of the consumer.”
In other words, the cut-throat competition in the marketplace usually ensures that the customer wins. The hooge-honking downside is that any given producer — including owners, management, and labor — is subject to being destroyed by its competition.
“The art of economics consists in looking not merely at the immediate but at the longer effects of any act or policy; it consists in tracing the consequences of that policy not merely for one group but for all groups,” -Henry Hazlitt. Notice the use of the word art, not science.
{Oh yeah,? Well, that’s all well and good but NAFTA screwed everything up and now they want...}
Whoa there cowboyperson, obviously anyone who lost a job because of NAFTA may understandably be reconsidering not only the wisdom of free trade agreements but capitalism in general. This was probably on their minds while they were driving to job interviews in their "American" made car that’s chock full of parts manufactured all over the globe (as practically everything is).
Yes, people lose jobs when a trade agreement is implemented and/or a tariff is eliminated. Other jobs are created or expanded, but unfortunately, this is virtually impossible to document with anything resembling precision, which is why both sides can plausibly argue their position.
Economists disagree on all sorts of things but most agree that free trade will, overall, generate at least as many jobs in a given country as it erases. Also, the consumer (that is, everyone) almost always wins. The producers (and by extension, their employees) may win or lose. We all want good, secure jobs. But we also all want lots of food, toys, and fun — for which we wish to pay as little as possible.
Finally, the Reality Checks, Caveats & Premises department has it on good authority that the global economy is a fact, not a possibility. Adapt or get run over like a cute little bunny that’s incapable of grasping the potential impact of an 18-wheeler passing through the neighborhood.
After WW2 ended America was the beneficiary of a boom that lasted for roughly 35 years during which you could drop out of school and still get a job that would provide a good living, and maybe even a pension. The rest of the world, having been more or less trashed by WW2, watched and learned.
This was a sort of temporary golden age that hadn't been the case before the war and hasn't been since.
More than a few of our fellow Earthlings thought they might also enjoy eating regularly and being able to seal the couch in plastic to keep it nice. Liberty might be nice too but that proved to be a lot harder and much more complicated. Life on Earth being what it is, instead of what we would like it to be (a phrase that bears repeating), there are always gonna be bullies that embrace their inner chimpanzee — and bullies need victims.
Nowadays, the US buys more stuff from the rest of the world than it sells to the rest of the world, but it exports more services than it imports. As of 2022, if you add total imports to total exports you discover that the total is almost $4,000,000,000,000. As of 2022, the GDP of the USA was $25,462,700,000,000.
We're talkin' trillions, with a t, dude.
Our 35-year-old bubble of prosperity hasn't so much popped as gotten comparatively smaller, so far at least, because the rest of the world is blowing its own bubbles. We export more than we ever have in terms of dollar value even allowing for inflation and because of productivity gains we can do this with far fewer people than would have been needed in the past.
Our GDP would be even higher, but we're simultaneously dealing with labor shortages in certain industries and people dropping out of the workforce. As to exactly why the economists (of course) disagree. My guess is as good as yours, in fact, yours may be better.
Ever wonder if all those um... "undocumented" refugees fleeing political and economic corruption in certain politically and economically challenged countries south of the Rio Grande are responsible for certain other people's wages being lower than they might otherwise be?
Ever wonder if all those women who have flooded into the workplace since the women's liberation movement hit its stride are responsible for depressing wages for everyone who hasn't disproportionately benefited from a truly global economy?
I do, but I have no idea. Believe it or not, the experts don't agree on that either. Shocking, I know. Consult the worldwide web of all knowledge to find the answer you prefer.
And if that ain’t bad/confusing enough, now we have to deal with a communication/high-tech revolution. It’s like the industrial revolution on steroids (and there still isn’t much work for buggy whip makers) in that the rules of the game keep changing and nobody on the rules committee has a clue what the final draft is going to be.
And if that ain’t bad enough it turns out there is no rules committee, there are just H. sapiens hoping it all works out somehow, and that civilization-ending-sized asteroids keep missing the mother ship.
