Quote:
Originally posted by Tyrone Slothrop
I was under the impression -- and I'm sure Spanky will correct me whether or not I'm wrong -- that he believes (a) free trade is beneficial for the country, on the whole; and (b) free trade helps more people than it hurts; and (c) supports free trade because of (a). Of course, (b) is nice too. But the question I was raising with the post you just responded to is whether Spanky would support free trade if (a) were true but (b) were not true.
eta: In #1428, two posts above, Spanky suggests that his support is based on (a).
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If A were true and B not true, that would mean it is beneficial for the country but that it hurts more people than it helps. It is hard for me to imagine such a scenario. It would seem to me that if it hurts more people than it helps then, it is not beneficial to the country.
One scenario where this might occur would be where the people that were helped were the bottom forty percent and it hurt the top sixty percent. So the people that were helped were the people that really needed it, and the people that were hurt (the upper and upper middle classes) had enough money any way. Then in that case I might think it helped the country as a whole even though it hurt the most people.
The problem with that scenario is that free trade, and free markets, almost always benefit the poor more than restricted markets. The main benefit of free trade is it drives consumer prices down. And no one benefits more from lower consumer prices than the poor. Restrictions on agriculture hurt the poor the most.
Once a specific industry protects its jobs through trade restrictions (like steel quotas), it may help keep their wages up, but the trade restrictions costs more jobs in the society as a whole thereby supressing wages in general. So the specific union in question may benefit, but their benefit comes at the cost of everyone else's wages being reduced.
Every analysis of almost every trade restriction I have ever seen shows that such restriction may benefit a few, but it always hurts the society in general, and mainly hurts lower income people by pushing down their income and pushing up the amount they pay for consumer goods. Both agricultural tariffs (and subsidies) and steel quotas help supress incomes in the lower two quintiles and increase the cost of basic consumer products, so everyone in the lower to quintiles are doubly screwed for the benefit of unionized steel workers and farmers (both who have economic clout).
