Where's the Beef?

On the surface, free trade is a mainstream idea. Opposition to it usually puts you in the loathsome ranks of Pat Buchanan.

But perhaps the supposed supporters of trade liberalization don't really get it.

The recurring wave of concern about off-shoring reflects some odd cognitive dissonance between what's good for workers and what's good for consumers. At least in theory, most politicians will support companies and individuals buying cheaper goods from foreign countries. But if it means buying cheaper labor, suddenly this is a whole different issue. John Edwards loves to wax nostalgic about when manufacturing jobs used to be in the South.

Haven't we already gone over this?

"A burgeoning trade in services provides an important outlet for U.S. expertise in sectors such as banking, engineering, and higher education. The ability to buy less expensive goods and services from new producers has made household budgets go further, while the ability of firms to distribute their production around the world has cut costs and thus prices to consumers. The benefits from new forms of trade, such as in services, are no different from the benefits from traditional trade in goods." This lucid explanation comes from Gregory Mankiw, chairman of the President's Council of Economic Advisors, whose testimony before the House Joint Economic Committee describes economic concepts in manageable textbook language.

Whether it's manufacturing or services jobs, the same principle applies. Letting companies buy cheaper labor means that their resources can be allocated to other areas: research and development, dividends, price-cutting...etc. all of which will still benefit us. The other economic reason is that in the long run, placing restrictions on off-shoring would only discourage companies from ever coming here.

Then there's the moral argument: If we're really concerned about the world's less well-off and globalization's seemingly disjointed effects, then we should allow qualified Indians, Bengladeshis and Guatamelans to get the jobs which they can perform cheaper than Americans.