By Alexander G. Markovsky |
A few days ago 370 economists published an open letter in The Wall Street Journal denouncing Trump economic policies including his approach to the Free Trade. To enhance the credibility of their arguments, some of them have been touting their Nobel laureate status. If the history is any guide, the status speaks more about the agenda of the Nobel Committee than the quality of their ideas. If Karl Marx were alive today, he would be a Nobel laureate in economics many times over.
I will make it so simple that even the Nobel laureates can understand. The conventional wisdom is that prosperity is a function of globalization. However, when the process encounters the imperatives of geopolitical reality and becomes overly politicized, as has happened in this country, it works counter to its objectives. A popular fallacy promulgated by both Republican and Democratic administrations is so-called free trade. The utopia of the global free market has not been beneficial to the U.S. economy, as most economists want us to believe. Over the past three decades, it has led to the de-industrialization of this country and the loss of millions of well-paying jobs. But guess what? Contrary to what has been publicized, free trade is not an economic theory promulgating economic development and wealth creation in the developing world; it is an economic model that emanated from a decidedly pro-Marxist ideology of redistribution of wealth on a global scale and it has been accomplishing exactly what was intended.
As part of the trade policy, it should be recognized that there is no such thing as free, whether it is trade or anything else. In this new world economy, the United States does not have a competitive advantage by virtue of superior organization and advanced technology. Nowadays, if you know what you want and have the money, practically anything can be bought. Project financing is available to anyone anywhere in the world, provided by multilateral lenders and syndication of investors worldwide. The technologies are available to anyone willing to pay for them, and information is available to anyone with a computer or iPhone. In this environment, America cannot compete with the world of developing nations. Saying that an American worker is “the most productive in the world” makes for good rhetoric but has little to do with reality. If Chinese enterprises employing modern technologies do not have to comply with U.S. environmental and health regulations and pay their workers in a day what their American counterparts make in an hour, this country cannot possibly succeed. American industries are under military-style assault coordinated by the Chinese government that includes, but is not limited to, manipulating currency, dumping, stealing technologies and know-how, and counterfeiting American products.
The prevailing mood among the Democrats and liberal economists is that the imposition of taxes or tariffs on imports would make imported goods and services more expensive and subsequently hurt the American consumer. This populist argument based on neither economics nor history lessons. America needs to stop its job base from imploding and create a more dynamic economy to replace welfare checks with paychecks, welfare recipients with taxpayers. People who do not make much cannot consume much. This is an economic veracity. The history lesson emanates from the destiny of ancient Rome. A millennium and a half before the United States was born, circa the second century CE, there was the Roman Empire. By that time it had begun to unravel from within.
The agrarian economy that had been the foundation of the state was falling apart, unable to compete with cheap crops imported from North Africa. The consumers definitely benefited from the arrangement until North Africa’s cheap crops destroyed Rome’s economy, just as cheap imports are destroying America’s industries. The situation is relevant and amenable to manipulation of trade by China, Japan, South Korea, and many other countries. It is fine to compete with the countries that employ wages and regulations similar to those in this country, but the American trade partners should not expect to profit from a trade that takes advantage of American regulations and high wages and their artificially devalued currency.
The United States still remains the world-dominant economic power, for which international trade, unlike for some of our more “backward” partners, is not a key building block of economic development. We are in a position to design an effective mechanism safeguarding American interests and enforcing a form of trade that reflects long-term strategic interests and restores the American role in the international balance of power. It can be applied in a manner that allows all the participants, including politically antagonistic entities, to enjoy the fruits of a global economic system. Those objectives should not be viewed as nostalgia for economic preeminence, but rather as an imperative for our economic survival.
Alexander G. Markovsky (www.alexmarkovsky.com), author of “Liberal Bolshevism: America Did Not Defeat Communism, She Adopted It,” was born in the Soviet Union and now lives in Houston, Tex. He holds degrees in economics and political science from the University of Marxism-Leninism. He is a contributor to FamilySecurityMatters.org and his work also appears on New York Daily News, RedState.com, Israpundit.com and WorldNetDaily.com.
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