We Need Real Free Trade Now
by Sheldon Richman
The Future of Freedom Foundation

People in parts of the developing world are becoming more free, better educated, and increasingly dexterous with modern communications, such as the Internet. As a result, they are more vigorously participating in the world economy. They are in a position to make things and do things for us that they could not have done a short time ago. They are even making and doing things — for lower wages — that Americans do.

Will this be a boon or a threat to us? That is the question.

Some people see a threat. Economist Paul Craig Roberts and Sen. Charles Schumer of New York co-wrote an article recently arguing that the venerable economic theory that justified free trade in the past no longer applies. Conditions have changed, they argue. The easy mobility of software and data now makes it possible for low-wage workers in the developing world to compete with high-wage Americans. They offer the example of an American company "outsourcing" jobs to $20,000-a-year computer programmers in Asia and costing $150,000-a-year American programmers their jobs. Before such "factor mobility," Roberts and Schumer say, every country could specialize in the work it was best at, and the laws of economics assured that everyone benefited. But that day is past because factor mobility will send many top-paying knowledge jobs abroad, leaving many Americans with nothing much to do. And the jobs that are left will be low-paying. (Read the rest here)