Quote:
Originally posted by Tyrone Slothrop
Suppose that repealing a certain tariff helps the richest 40% of the country, making them $100,000,000 richer. But it hurts the poorest 60%, making them $60,000,000 poorer. In the aggregate, the country is better off. But more citizens are hurt than helped. What then?
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That would suck. But as far as I know free trade does not work that way, and even if it did, I don't know what trade restrictions could do to fix the problem.
Quote:
Originally posted by Tyrone Slothrop
As consumers, yes. Because the poor spend more of their money on things like food. But as workers, free trade tends to hurt the working class more than the upper classes, because the former is more vulnerable to competition from unskilled labor in foreign countries than the latter is. We lawyers can (imperfectly) protect our jobs through restrictions on the unlicensed practice of law, etc.
I agree with you about agricultural barriers, many of which our government supports for fear of pissing off politically influential groups like the sugar lobby. What do you think about that flavor of free trade, Tables?
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I think where you analysis is wrong, is that the poor and lower middle class do not hold manufacturing jobs. Especially not unionized manufacturing jobs. Manufacturing jobs are a small part of the economy and they do not represent the two bottom quintiles of society. The poor and lower middle class generaly have low end service jobs like waiter, fast food, cleaning, security guard, janitor, landscaping etc. all of which are not exportable. The amount these jobs pay is also very vulnerable to the economy in general. If the economy is doing well there is more demand for these jobs, and if it is not doing well there is less demand for these jobs. The more disposable income floating around the economy (which trade restrictions directly eat up) the more these jobs pay. So these non exportable service job holders are benefitted the most by the efficiencies created by free trade, and benefit the most by lower consumer prices created by free trade.
The problem is that these people have no organized political force. It is only the old industry manufacturing jobs that have the political clout in the Democrat party, and they are the ones that can benefit from these restrictions. The people whose jobs can be protected by trade restrictions are a very limted sector of the economy. And every protection these people get through hurts the bottom two quintiles the most.
