Free Trade Agreements

[cybercoma]

Link to the full article

The operation of these networks, the majority of which are centered in East Asia, have greatly contributed to the growth of global imbalances, marked by East Asian trade surpluses and U.S. trade deficits. These imbalances were papered over, and global capitalist accumulation sustained only because of the debt-driven housing bubble which financed U.S. consumption.

The collapse of the bubble has led many analysts to call for a rebalancing of Asian and U.S. economies. However, rather than address this need, governments throughout the world, responding to dominant capitalist interests, continue to pursue new free trade agreements, a pursuit that if successful will only intensify existing economic and social problems and make needed changes harder to achieve.

Is it time to step back and have a serious conversation about the pros and cons of Free Trade and the operations of TNCs?

[Michael Hardner]

Is it time to step back and have a serious conversation about the pros and cons of Free Trade and the operations of TNCs?

I think Free Trade needs to continue but the increased profits of those who have the ear of government need to be looked at. We're told that better profits, means more jobs and more investment for ... well, not for those whose jobs have been displaced.

Free Trade does help our economy overall but the past paradigm of improved jobs doesn't apply because the jobs that were displaced were paying more than market wages due to unionization. So manual labour jobs are replaced by "better" jobs that pay less. You can be an object oriented programmer with 4 years of university education making $40K or a unionized autoworker making ... not sure ... but likely more.

And the real problem is that we are unable to have a frank conversation over who is winning and losing because the arguments are draped in the cloak of the 1930s. Leftists argue that we're in a depression, albeit a depression where the downtrodden are forced to sit at home with their XBoxes and smoke weed rather than join the bread line. Rightists tell people to pull up their socks and work at McDonald's ... earning enough for food, rent, clothing (and weed) but little else.

[Bonam]

You can be an object oriented programmer with 4 years of university education making $40K or a unionized autoworker making ... not sure ... but likely more.

You'd have to be a pretty damn bad programmer, object oriented or otherwise, to be making $40k. Anyway, pay is only one factor in how "good" a job is. The extent to which you like your job is important to. I'd probably stay at my job even if someone offered me a menial labor job at double the pay.

And the real problem is that we are unable to have a frank conversation over who is winning and losing because the arguments are draped in the cloak of the 1930s.

Yes, the debate is hopelessly polarized and distorted.

[dre]

Trade is good.

But what most North Americans think of as "free trade" is the massive flow of goods from east to west over the last few decades, is just a temporary trade imbalance that will be corrected.

The main reason its gone on for this long is because China wont let its currency float, and because they give all the money they make back to us for nothing so that we can spend it on their stuff again.

[dre]

You'd have to be a pretty damn bad programmer, object oriented or otherwise, to be making $40k. Anyway, pay is only one factor in how "good" a job is. The extent to which you like your job is important to. I'd probably stay at my job even if someone offered me a menial labor job at double the pay.

Yes, the debate is hopelessly polarized and distorted.

I pay developers at 50K in the US, and 11k in the Philipenes. Those are junior positions. 40 is definately low. 60-70k is probably average for a guy with a few years of experience. The problem is those salaries are roughly the same as they were ten years ago, but the dollars only have about 1/2 the purchasing power. You would have made more real money in the 90's working for 35k.

[Michael Hardner]

You'd have to be a pretty damn bad programmer, object oriented or otherwise, to be making $40k. Anyway, pay is only one factor in how "good" a job is. The extent to which you like your job is important to. I'd probably stay at my job even if someone offered me a menial labor job at double the pay.

I placed programmers at interviews paying that much 5 years ago, and they had graduate degrees.

[Topaz]

My view is Free Trade is for the corporation and NOT for workers and so workers there's nothing free about it. The corps. in NA left to cheaper wages and some countries have their imports and exports up but they workers, which are the taxpayers , have no jobs or EI, so depending where you live and what line of work you are in, Free Trade is a nighmare.

[Michael Hardner]

My view is Free Trade is for the corporation and NOT for workers and so workers there's nothing free about it. The corps. in NA left to cheaper wages and some countries have their imports and exports up but they workers, which are the taxpayers , have no jobs or EI, so depending where you live and what line of work you are in, Free Trade is a nighmare.

Free Trade always has winners and losers, and the accepted wisdom is that there's an overall benefit to the economy in that countries can specialize in what they have an advantage in.

[dre]

Free Trade always has winners and losers, and the accepted wisdom is that there's an overall benefit to the economy in that countries can specialize in what they have an advantage in.

The problem is the only real natural advantage is natural resources. The ONLY things done by Canadians that cant be done for less in the developing world are cutting down trees, mining fuel and ore, and hunting baby seals. And the only reason they cant do those things cheaper is because they dont have trees and baby seals. We still have a small advantage in education and producing highly skilled professionals but thats dissappearing fast because these countries are aggresively educating now as well.

Besides having trees to cut down, and oil to mine (which is the only reason Canada is in better shape than the rest of the west), what do you figure our "advantage" is gonna be?

[August1991]

Free Trade always has winners and losers, and the accepted wisdom is that there's an overall benefit to the economy in that countries can specialize in what they have an advantage in.

How do you define winner? Or loser?

In the past 30 years, the US has lost more jobs due to technological innovation than it has to free trade. I recently had to drive in an area of warehouses in Montreal. Many were empty and had notices that they were for rent. That makes sense, I thought. Computers have made inventory control much better. Firms require less warehouse space.

At the same time, there are constant reports of paper mills shutting down. That also makes sense. People now read much more on screens and so we require less paper for printing. Newspapers are losing money and printing fewer copies. Indeed, the world's GDP is getting physically lighter. We produce more services, fewer manufactured goods and the manufactured goods are not as heavy. This means that we need fewer truck drivers to transport these goods.

These innovations lead to people losing their jobs. Would you call these people losers? Only if you have a peculiar view of life.

As a point of comparison, Montreal's transit system has essentially automated its ticket sale/collection system. Nevertheless, it still has a full crew of people working in metro station ticket booths. They sit there, reading the newspaper (or sleeping) in public view, and remind me of many workers in the Soviet Union.

We, as a society, lose their valuable talents when instead they could instead be working productively. And they lose by wasting their lives sitting in a booth doing nothing.

The problem is the only real natural advantage is natural resources.

The term is comparative advantage, not natural advantage. I suggest that you learn the concept on the Internet. Edited November 22, 2011 by August1991

[Michael Hardner]

Besides having trees to cut down, and oil to mine (which is the only reason Canada is in better shape than the rest of the west), what do you figure our "advantage" is gonna be?

They've been saying that for a long time. I guess we'll find out.

[Michael Hardner]

How do you define winner? Or loser?

Since we're talking about trade, it's the one holding the most gold at the end of the day.

In the past 30 years, the US has lost more jobs due to technological innovation than it has to free trade. I recently had to drive in an area of warehouses in Montreal. Many were empty and had notices that they were for rent. That makes sense, I thought. Computers have made inventory control much better. Firms require less warehouse space.

Ok...

At the same time, there are constant reports of paper mills shutting down. That also makes sense. People now read much more on screens and so we require less paper for printing. Newspapers are losing money and printing fewer copies. Indeed, the world's GDP is getting physically lighter. We produce more services, fewer manufactured goods and the manufactured goods are not as heavy. This means that we need fewer truck drivers to transport these goods.

Right....

These innovations lead to people losing their jobs. Would you call these people losers? Only if you have a peculiar view of life.

Well... they LOST their jobs, therefore they LOST something so they are LOSERS of something, no ?

As a point of comparison, Montreal's transit system has essentially automated its ticket sale/collection system. Nevertheless, it still has a full crew of people working in metro station ticket booths. They sit there, reading the newspaper (or sleeping) in public view, and remind me of many workers in the Soviet Union.

They continue to get paid because of politics.

We, as a society, lose their valuable talents when instead they could instead be working productively. And they lose by wasting their lives sitting in a booth doing nothing.

They get paid more. They're free to quit and play mandolin on the street corner for pennies but they choose not to: their choice.

The term is comparative advantage, not natural advantage. I suggest that you learn the concept on the Internet.

I don't have to learn the 'concept'. I am here.

Here's a question for you: how big a circle do you have to make before you get to your point ?

[guyser]

How do you define winner? Or loser?

At the same time, there are constant reports of paper mills shutting down. That also makes sense. People now read much more on screens and so we require less paper for printing.

Except paper production is up after a moribund couple of years.

Should be up 3%.

[Michael Hardner]

In the past 30 years, the US has lost more jobs due to technological innovation than it has to free trade.

The idea behind technological change, or freer trade is that there are overall improvements to the economy that generally benefit everyone.

With technological change, the amount of labour required to produce goods and services is reduced, and the net gain means that the same output is achieved with less input. The new jobs that are created are of a 'higher order', roughly, in that they require more knowledge less manual labour and so on.

With free trade, a country has a competitive advantage in an area and can exploit that advantage to export their goods or services - again with a net economic benefit to society.

The economic losers are displaced and have to find their place in the new economic order. The problem with recent change is that manufacturing jobs were paid far more than market, so the replacement jobs - even higher order jobs - don't pay more than the previous jobs did. This also results in a much higher benefit going to those who employed the former manufacturing jobs.

[August1991]

Well... they LOST their jobs, therefore they LOST something so they are LOSERS of something, no ?

They get paid more. They're free to quit and play mandolin on the street corner for pennies but they choose not to: their choice.

Michael, Montreal metro booth ticket sellers can choose to keep their jobs because they belong to a public sector union: the rest of us pay for their livelihood.

They are like trust fund kids, Paris Hilton or lottery winners. They are lucky to have a benefactor.

The difference is the signal to the rest of us. The fortunate livelihood of Steve Jobs' grandchildren is a signal to future innovators. The signal to lottery winners? Buy a lottery ticket. And the signal of Montreal metro ticket collectors? Join a public sector union.

Michael, which signal will likely create more wealth in the future?

As to the argument about losers, I simply wanted to view the question differently. I travelled in eastern Europe in Soviet times and I was disheartened when I saw people staring into space, ostensibly working. Such a waste, I thought. Montreal's STM workers in 2010 remind me of Soviet workers.

However strong the union, whatever the benefits, life is too short to waste it staring into space. And I suspect that such a system is not sustainable anyway.

Except paper production is up after a moribund couple of years.

Should be up 3%.

Link? From what I know, quality paper production is up marginally - but newsprint and paper overall is down overall. Edited November 23, 2011 by August1991

[August1991]

The idea behind technological change, or freer trade is that there are overall improvements to the economy that generally benefit everyone.

With technological change, the amount of labour required to produce goods and services is reduced, and the net gain means that the same output is achieved with less input. The new jobs that are created are of a 'higher order', roughly, in that they require more knowledge less manual labour and so on.

New jobs are not "created". Rather, unemployed people do not want to waste their lives at home doing nothing. They find something useful to do with their lives.

In 1900, about 30 of 100 in Canada were involved in food production. In 2000, it was about 2 in 100. Why? We import some food but mostly, we use better methods to produce Canadian food. Fewer Canadians work to produce the food we eat.

As a result, 28 of 100 Canadian workers (or their children/grandchildren) do something else with their time. They cut hair, make videos, learn about open-heart surgery.

In 1900, how many people cut hair? How many made music videos?

Canada is a better place in 2010 than in 1900. Nowadays, we have more stuff. Why? Because Canadians don't sit at home staring into space. Life is too short.

With free trade, a country has a competitive advantage in an area and can exploit that advantage to export their goods or services - again with a net economic benefit to society.

The economic losers are displaced and have to find their place in the new economic order. The problem with recent change is that manufacturing jobs were paid far more than market, so the replacement jobs - even higher order jobs - don't pay more than the previous jobs did. This also results in a much higher benefit going to those who employed the former manufacturing jobs.

Wait a second. We can produce more overall since fewer people are required to produce food. Why would this mean that income is concentrated in a fewer hands?

The agricultural workers (or their kids, grandkids) now make music videos. Is that not profitable?

[Michael Hardner]

Michael, which signal will likely create more wealth in the future?

People don't create wealth because of signals.

As to the argument about losers, I simply wanted to view the question differently. I travelled in eastern Europe in Soviet times and I was disheartened when I saw people staring into space, ostensibly working. Such a waste, I thought. Montreal's STM workers in 2010 remind me of Soviet workers.

And... the point ? State communism wastes resources ? Ok... I'll be sure to drop that message off to Comrade Breshnev next time I'm in my time machine...

However strong the union, whatever the benefits, life is too short to waste it staring into space. And I suspect that such a system is not sustainable anyway.

You should give them that advice then. Maybe they should bring a book to work ?

New jobs are not "created". Rather, unemployed people do not want to waste their lives at home doing nothing. They find something useful to do with their lives.

Incorrect. New jobs are created from the displacing technology. Technicians, engineers and the like are employed to design, create and maintain the machines in the manufacturing example.

In 1900, about 30 of 100 in Canada were involved in food production. In 2000, it was about 2 in 100. Why? We import some food but mostly, we use better methods to produce Canadian food. Fewer Canadians work to produce the food we eat.

I believe I myself have posted this on the forum.

As a result, 28 of 100 Canadian workers (or their children/grandchildren) do something else with their time. They cut hair, make videos, learn about open-heart surgery.

In 1900, how many people cut hair? How many made music videos?

Canada is a better place in 2010 than in 1900. Nowadays, we have more stuff. Why? Because Canadians don't sit at home staring into space. Life is too short.

Whether people sit into space on their own time or not shouldn't be your concern, unless you're a budding amateur social engineer who feels he has to tell people what to do.

In any case, national and international economics is a game that is regulated by various governments. Part of the economic gains that came from 20th century automation were used to create social programs to deal with the problem of unemployment.

Unemployment will become more of a problem as there is less work to do. I suppose you could work at a coffee shop, as there still seem to be minimum wage jobs out there but you can't get a living wage doing that work. When governments changed the rules to allow freer trade, there are economic losers that come out of it. The government has taken steps to allow people to help pay for retraining and the like, but there still isn't enough good work to do.

The working week came down to 40 hours in the 20th century - why did that happen ? Why would it ever happen again ?

[August1991]

Unemployment will become more of a problem as there is less work to do.

I love that. And as if people will simply sit at home, and twiddle their thumbs.

Michael, you don't understand human nature.

[Michael Hardner]

I love that. And as if people will simply sit at home, and twiddle their thumbs.

Michael, you don't understand human nature.

You've never heard of unemployment ? It's quite a big thing now, and doesn't seem to be going anywhere.

[bush_cheney2004]

....Unemployment will become more of a problem as there is less work to do. I suppose you could work at a coffee shop, as there still seem to be minimum wage jobs out there but you can't get a living wage doing that work....

A "living age" is determined by one's choice or expectation for what "living" means. Clearly it is possible to have a "living wage" being employed at such jobs, as millions do just that.

[Michael Hardner]

A "living age" is determined by one's choice or expectation for what "living" means. Clearly it is possible to have a "living wage" being employed at such jobs, as millions do just that.

I'm going to retract my use of that term. I concur that you can live at minimum wage, however that is a lower standard than most have, I would expect. The idea is that under the new rules, it's harder to make the kind of wage where you can do such things as by a home, buy a vehicle, go on vacation and send your kids to postsecondary education.

Certainly people will get by, and I even suspect that it's never been easier to live at the minimum wage... BUT: the powers that be certainly didn't explain these change as such, and economic policy doesn't seem that it can support it without changes. Guess who will have to give up benefits due to these changes ?

[WWWTT]

I'm going to retract my use of that term. I concur that you can live at minimum wage, however that is a lower standard than most have, I would expect. The idea is that under the new rules, it's harder to make the kind of wage where you can do such things as by a home, buy a vehicle, go on vacation and send your kids to postsecondary education.

You do not have to retract anything as far as I am concerned!

Minimum wage jobs are for the most part only temporary or second income if to be considered pemanent.

In Ontario the min. wage is 10.25/hr or 20 000/yr before taxes.

We all are fully aware of all the expences we have,now tell me,after deductions do you sincerely believe anyone can live on this?

WWWTT

[bush_cheney2004]

I'm going to retract my use of that term. I concur that you can live at minimum wage, however that is a lower standard than most have, I would expect. The idea is that under the new rules, it's harder to make the kind of wage where you can do such things as by a home, buy a vehicle, go on vacation and send your kids to postsecondary education.

OK, but the lifestyle you are describing is middle to upper middle class and is not the living condition for the vast majority of people in the world.

Certainly people will get by, and I even suspect that it's never been easier to live at the minimum wage... BUT: the powers that be certainly didn't explain these change as such, and economic policy doesn't seem that it can support it without changes. Guess who will have to give up benefits due to these changes ?

This is as it should be...nobody complained much about the spiraling debt that helped make such lavish lifestyles possible in the first place. "Benefits" have to be aligned with available resources. Some people just don't know how to be poor....time they learned.

[CPCFTW]

You do not have to retract anything as far as I am concerned!

Minimum wage jobs are for the most part only temporary or second income if to be considered pemanent.

In Ontario the min. wage is 10.25/hr or 20 000/yr before taxes.

We all are fully aware of all the expences we have,now tell me,after deductions do you sincerely believe anyone can live on this?

WWWTT

Yes.

$20000/12 = $1450/mo after tax

$100/mo = transit pass

$500/mo = rent a room in a home, or a basement apartment

$500/mo = food

$50/mo = internet

$300/mo = discretionary spending

Have a kid? No problem, you get another $100 from the UCCB, and $400/mo from the CCTB:

http://www.cra-arc.gc.ca/bnfts/clcltr/cctb_clcltr-eng.html

You will also get back about $200/mo in taxes.

Want more? Get a 2nd job. There are more than 40 waking hours in a week. Or get a husband/wife/bf/gf/roommate to split costs.

Edited November 23, 2011 by CPCFTW

[bush_cheney2004]

Yes.

$20000/12 = $1450/mo after tax

Spot on...if one can't "live" on $20,000 per year how do lots of others manage to do so, and many times on far less? This is the spoiled thinking of an entitlement mindset.