The Coalition to Keep People Poor
One of April's most prominent news stories in Vermont was the use of the state as a staging area for thousands of left-wing protestors headed to Quebec City to express their strident opposition to the supposed evils of "globalization". Unfortunately the Vermont news media did not spend much time interviewing those less vocal and colorful individuals for whom free trade is an economic and a moral blessing.
The topic of the Quebec conference of Western Hemisphere heads of state was the proposed Free Trade Area of the Americas (FTAA). When completed over the next few years, the FTAA will create a free trade zone from the Canadian Arctic to the southern tip of Argentina and Chile.
To the "globalization" protesters this will be an unmitigated disaster. Stripped of the more extravagant hyperbole, their argument appears to be this: If the U.S. lowers its tariffs and trade barriers, this country will be swamped with products manufactured by uprooted Mexican and Brazilian peasants and child laborers. These low-cost products will put untold numbers of American workers out of work. Greedy capitalists throughout the hemisphere will get rich by destroying the environment and exploiting women, children, "people of color", and any other group which can arguably be included among "the oppressed masses".
Leaving aside the anarchist contingent, which relishes any excuse for a riot , the protestors include three rather different groups: Marxists, labor union activists and radical enviros. Marxists are pro-growth but are outraged that governments should agree to allow economic growth created by private property and capitalist entrepreneurs. The non-Marxist union people are generally pro-growth - but only when that growth predominately takes place in unionized industries, preferably in this country. Unlike labor, the radical enviros don't want growth at all. Their Green theology holds that humankind has committed unspeakable acts against the Earth Mother, and further non-renewable exploitation of natural resources for the benefit and comfort of our guilty race is a moral abomination.
The other side of this debate deserves to be heard. One articulate voice is that of Jenny Bates of the Progressive Policy Institute (the voice of the Clinton/Dean New Democrats, not to be confused with Vermont's "progressive" party). Says Bates, FTAA's "locking in the economic reforms among Latin American economies of the past two decades will spur continued growth and reinforce pressure for political reform. Such a commitment will reduce risk for investors, spur inflows of much-needed foreign capital, and promote development. "
Aaron Lukas of the libertarian Cato Institute observes that "trade is also a matter of freedom at home: the freedom to spend your own money on whatever you wish, regardless of the skin color or the language of the person from whom you decide to buy: the freedom to invest your savings where you choose, even if that choice is on the other side of the planet. We have no more right to tell our fellow citizens what brand of clothing or car they must buy any more than we have the right to tell them what they can say or think."
Leaving aside a few hard national security cases, the case for free trade rests not only on the principles of freedom of exchange, division of labor, and comparative advantage, but also on the importance of giving less economically developed peoples the chance to earn their way toward relative prosperity. New York Times foreign affairs columnist Thomas Friedman has written that, "By inhibiting global trade expansion [the "globalization" protestors] are choking the only route out of poverty for the world's poor. Which is why these 'protesters' should be called by their real name: The Coalition to Keep Poor People Poor."
Vermonters have an important stake in trade expansion. Last year Vermont companies exported $4.4 billion worth of goods, 55% of that amount to Canada. Over the past decade Vermont exports to non-Canadian countries grew at a 22% compound annual rate. True, almost 80% of Vermont's exports are IBM chips shipped to its plant in Quebec, but other Vermont exports are growing faster than IBM's.
The FTAA will undoubtedly benefit millions of Americans employed in high tech and capital goods industries, where we are the world leader. A restrictive trade policy that denies these productive people the chance to market their wares more freely in a hemispheric market would be an economic and moral calamity for everybody. Barriers to protect the least productive Americans at the expense of the most productive would do serious harm to the U.S. and to the Vermont economy.
The protestors have had their 15 minutes of media coverage. Now the rest of us need to get on with building a freer, more prosperous, high-opportunity state, nation, hemisphere, and world.