Yaron Answers: Do Free Trade Agreements Actually Promote Free Trade?

Yaron Brook answers a question from Rolf: "Do free trade agreements actually promote free trade?"

[DystopianEmpire]

Much appreciated. :) Yes there are many people that assume they know more than they could, it can get frustrating.

[Shozbt]

Thank you for answering. Would you say that businesses are commonly using this scenario today (in the U.S. or other countries)? If so, how do you propose to stop it? I have my own ideas, but I don't want to get you sidetracked.

[TeaParty]

Greed is excessive desire. But that requires a standard of proper desire.

[DystopianEmpire]

That definition is biased towards a certain end, but still relative, Yes.

[TeaParty]

Agreed, I value objectivity not the postmodern arbitrary and conventional.

[DystopianEmpire]

Well the simple answer would be to prevent it in the first place, once a problem is well established it becomes very difficult. Once established not only do you have the companies lobbying and suing and putting out smear ads but you also have that companies labor unions doing the same things for their self-interest and the customers raising complaints that their choices are being attacked and that prices will rise and harm them(self-supporting ads from the company and it's unions taking effect).

[TeaParty]

Wealth controls markets until a superior competitor comes along. Even the potential of a superior competitor affects the behavior of market participants. Eg, Alcoa, the dominant aluminium firm before WW2, kept its price low to avoid competition (and was condemned by the Supreme Ct. for that).

[TeaParty]

Feelings do not change the absolute laws of economics. Trade is good for all in the long run because each person (or nation) can specialize in what he does comparatively best. Search comparative advantage. The savings resulting from "cutthroat" prices fund new, better, production and consumption.

[LucisFerre]

Innovation leads to higher quality and lower prices. When refrigerators, microwave ovens, cell phones, color TV's computers, etc first came out, they were cost prohibitive. Now the average poor family (lowest 20% of income earners) have all mentioned items, plus an average of two cars, and they tend to last longer than what was on the market decades ago. The reason there used to be a lot of TV repair shops is because they used to go bad all the time. Now they're solid state.

[DystopianEmpire]

It's a term relating to a person trapped in a minimum wage job, because of expenses and income are almost equal so that a person cannot build capital and doesn't have enough off-work time to do anything but rest for the next shift, always one paycheck away from homelessness. It's a pretty common condition these days, I'm surprised you've never heard of it. I guess the term is more a regional thing, but unfortunately a very accurate description of the situation for many of the working poor.

[LucisFerre]

P.S. I'm talking about the Jason Welker supply and demand graph vids. There seems to be some confusion in youtube about urls lately.

[TeaParty]

Rand said that the alleged greater good is always not any particular individual.

[pepeledog]

U, sir, are describing economic suicide. It is happening right now, right in front of your eyes.

[LucisFerre]

[[It's a term relating to a person trapped in a minimum wage job, because of expenses & income are almost equal so that a person cannot build capital & doesn't have enough off-work time to do anything but rest for the next shift, always one paycheck away from homelessness. It's a pretty common condition these days, ]]
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"Pretty common"?
3% of the labor force earns minimum wage, Most are kids. If we discount the ones that make most of their income via tips like skycaps & valets, it's about 2.5%.

[LucisFerre]

Yup, which is why about 97% of the labor force earns more than minimum wage, and earn their marginal revenue production minus a few minor expenses.

[LucisFerre]

Yeah, it's always cracked me up how they claim that they're looking out for "the minority", whilst also advocating railroading the little guy when it's for the "greater good" of the collective. I cringed when writers tuned Spock into a collectivist. "The needs of the many outweigh the needs of the few". I can see someone chanting this to himself when confiscating private property through eminent domain to build a super-walmart, or when reinstituting the draft/conscription.

[mites]

my grandpa had 2 failures before making it in real estate

persistence is rewarded :)

[LucisFerre]

Exactly, protectionism is a form of self-embargo. Protectionism is to do to ourselves what enemy nations try to do to us in times of war. I don't know if you saw the links I posted to a two-part video series on this, it's fascinating.
Part 1, /watch?v=h2XAII9HdHA
Part 2, /watch?v=TDY2sIMDZLM
He has another video on excise taxes that show much the same results.
Cheers.

[TeaParty]

Free trade may hurt you in a small way in the short run but in the long run, you will live in a more productive economy that necessarily will benefit you as producer and consumer. Free trade lowers costs, saving money that becomes investment funds allowing you to start a more productive business. Of course, this requires constant rationality to compete w/o govt protecting the intellectual lethargy of incompetents. And that may be your basic complaint.

[LucisFerre]

I don't think that free trade harms us even in the short term. Consider the luddites for example. They were doomed whether they kept their hand looming occupations or not because competitors would use the more productive machines and gain market share, bankrupting the hand-looming companies. To be on a ship on a crash trajectory arguably isn't better than jumping ship and finding something else lucrative to do with one's time in the here and now.