Free Trade Hurts
Why the farmers must lose their jobs
PI editorial

American farmers and manufacturers hate free trade. Who could blame them? Cutthroat competition from foreigners getting paid cents per hour renders the relative cost of American labor so expensive that greedy businesses and cost-cotting consumers alike rush to buy foreign products and outsource their employment. Such pecuniary obsession costs American farmers, factory workers, and other communities their jobs, livelihoods, and ways of life that have flourished for decades. Breadwinners are unemployed, towns are depressed, and industries crushed. How could anyone support the gross inhumanity that this free trade monster unleashes on the American working man and American tradition?

Certainly not Congress, who rushes to the aid of farmers (to the tune of $190 billion in 2002, and coming up again) with subsidies and other supports against those darn fuhr'ners and their unfair competition. But free trade negotiations require our elimination of these protections. The globalized market opens markets up to cheap goods and cheap labor, letting low cost rule with its typically ruthless invisible hand. The farmers and those who support their federal stipend can't fathom ending their life-preserving financial support. They ask, in varying levels of hysteria, How could America heartlessly put its own people out of jobs, out of business, and out of their livelihoods?

The answer is three-fold.

1. There's no guarantee that you can make a living doing whatever you like (remember the free lunch?).

When you're a kid and run a lemonade stand, people give you money because they think you're cute. But that doesn't mean you will be able to grow up, not go to college, and expect to make money with your lemonade stand for the rest of your life. You don't get to demand a salary for something just because it's what you like doing, what you think you're good at doing, and what you've been doing your whole life. Neither life nor economics works that way, and it's not only cold-hearted capitalists who recognize it. It's a point that's so obvious it seems silly, yet is still somehow ignored by knee-jerk protectionists. To earn a living, you must do something that creates value for people. Otherwise, you just aren't helping society, and neither do you deserve to take their money.

The reality of free trade is that "unfair competition" is simply the foreign offering that America finds superior to what it can get - either in price, quality or quantity - from its own country. If consumers don't want your products or if businesses don't want to do business with you, you have a very difficult claim for a successful living. The art of innovation and economic growth is finding that which one is good at, not that which one just feels like doing or is used to doing.

2. There's a silver lining to the storm clouds of globalization

We let our farmers and factory workers lose their jobs because we want them, and the country at large, to be doing bigger and better things. Lower standards of living in developing countries create a permanent competitive advantage for their industries, but few developing countries have industries beyond farming and unskilled labor. But there are plenty of American industries which have no problems with such foreign competition. These are the industries of the future and the industries of American excellence, which don't need subsidies to stay alive. They include technology, financial services, medicine, retail, fashion, music, film, and more than could ever be named in this editorial. We should want to be spending our time doing the things Americans do well, not the things that are done better in Bangladesh.

Despite appearances, America's economy has already undergone most of this transformation. In 1810, 84% of America's workers worked in farming; now less than 2% do. Manufacturing has seen a similar decline, as white collar positions became much more common. 21st-century American labor should continue to move away from mowing grain and stamping widgets in factories. America should be offering innovative services; not unskilled labor that can be performed elsewhere for a dollar a week. Farmers themselves are already doing so, with their increased production of biofuels and other innovative technologies.

America's economy is as successful as it is because it thrives on change and competition. Those who appreciate and wish to maintain this economic prowess should duly understand why we shouldn't be paying farmers to not make money. It's the loss of jobs in farming and manufacturing through free trade, as difficult as it is, that helps evince the winds of change in the world economy and keep America ahead of the curve.

3. The humanitarian option remains open

Of course, the transformation of the labor force is hardly an overnight, painless process. But there are ways to combat the unemployment and bankruptcy that is certain to result from free trade policies, making sure the economic impact is balanced with humanitarian policy.

The first solution is education and training. America's universities are the best in the world at training leaders who not only have nothing to fear from the global market, but are equipped to thrive in it. Public policy can go a long way in raising K-12 schools to that standard, as well as making all education more affordable at any level, from childhood through adulthood. Knowledge is the ultimate competitive advantage.

The second method is direct public policy support for citizens who lose their livelihood. One such proposal, from the Brookings Institution, offers more generous unemployment benefits to workers in certain industries (e.g. farming) considered "highly at risk" for foreign competition. Other industries, such as art, can be subsidized by virtue of their benefit to all of American society. Ideas also abound for helping workers find new jobs or new industries. But the main concern of American policy should always be making sure that we aren't keeping our people in jobs that benefit no one.

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