General Issue
Free trade is considered the predominant economic approach worldwide, with many countries subscribing to free trade entirely or partially. The idea is that through free fluctuation of goods and services, inefficient premises are removed from the market, and existing ones provide the customers with the best quality of products for the minimum price. As a result, society achieves progress through competition and enjoys a higher standard of living. There are arguments against free trade as well, however. Some include protecting self-reliance and independence from imports, disproportional distribution of costs across the free market economic space, and geopolitical claims that rich and developed countries use free market policies to dominate the poor. This paper will investigate the issue and weigh the pros and cons of free trade.
Perspectives from Each Side
The arguments against free trade are summarized in the article by John M. Culbertson, titled “The folly of free trade.” He views free trade as threatening US economic stability and long-term social and political goals. The highlighted threats are unequal competition, direct competition with low-wage nations, and the disruption of supply and demand chains at home. Culbertson (1986) argues that while the US can play by free trade rules, other countries cannot, which puts US companies at a disadvantage when they play on the outside, playing equal to them at home. The second argument is that competing with low-wage countries on equal terms is a losing battle because those countries can afford to make goods cheaper by saving on labor costs. Finally, Culbertson (1986) states that the disruption of supply and demand chains at home makes the country reliant on imports, thus more volatile. His solution is to impose quotas on goods of strategic value, such as automobiles, textiles, steel, and other products, to support the local industries and rectify the situation.
These ideas are opposed by Scott Lincicome, who wrote the “Case for Free Trade.” While using a considerably more flowery language when compared to Culbertson, Lincicome (2019) asserts that the benefits of free trade over the several decades have been undeniable. He cites the availability of everyday items for impoverished individuals as a result of importing from China, the general growth of the economy by 2.1 trillion USD, and GDP per capita from 7,000 USD to 18,000 USD. Lincicome (2019) also states that most goods imported by the US are either parts needed for high-end production or goods wholly or partially made by American companies. Likewise, he makes an argument against protectionism, stating that the long history of the policy had never been beneficial to the US, ending up in the closure of foreign markets while failing to resuscitate failing US companies. Lincicome (2019) argues that all and any restrictions for free trade towards the US should be repealed.
Free trade is good and bad for the country: its supporters claim it benefits the poor immediately while harming the interests of the much smaller professional worker caste and the owners of large domestic companies. If the conditions are met, resources are redistributed to a more efficient industry, but an increase in GDP accordingly requires an increase in exports or the purchasing power of the population – theoretically, this approach is generally better than bad but depends on many external factors. Those who oppose free trade state that the general failure to protect domestic markets will result in jobs and money flowing out of the country, hurting everyone. Balancing these two positions appears impossible – Culbertson (1986) claims it is a national duty to protect domestic industries, whereas Lincicome (2019) does not find any ethical or economic grounds for granting such protection. Nevertheless, flexible trading standards, on the one hand, and independent control over compliance with contract clauses, without going into gray bookkeeping or other illegal schemes, on the other hand, can make free trade a better approach.
Analysis of Evidence
Both articles represent a public press argument rather than a scientific inquiry, which is why the standards for evidence are relatively low. Culbertson (1986) appears to be making an argument from the position of their academic authority. He does not reference any credible sources of information or any official statistics to demonstrate how grave the situation in the US economy truly is. The article talks about probable scenarios, potential dangers, and approaches to solving them without offering numbers or facts to back those claims. Lincicome (2019) is much more prepared, as his article mentions critical numerical proof to illustrate his points. Some sources point toward the Commerce Department, the US International Trade Commission, the International Monetary Fund, and many other credible institutions (Lincicome, 2019). Therefore, in terms of source strength in regards to supporting the thesis, the case for trade has a clear advantage. However, apart from analyzing macroeconomic indicators, Lincicome does not provide practical evidence to support his point of view.
Qualifications of the Authors
Culbertson and Lincicome feature impressive qualifications to back up their claims. The former was an American professor of economics at the University of Wisconsin-Madison (Culbertson, 1986; Lincicome, 2019). He also held a position in the Federal Reserve System and was a consultant to the House Banking and Currency Committee, emphasizing managing international finance. His magnum opus was in the critical analysis of Ricardo’s theory of economic advantage, and his views are becoming increasingly popular as the modern economy is becoming dominated by Eastern countries, such as China.
On the other hand, Lincicome is the vice president of Cato Herbert A. Stiefel Center for Trade Policy Studies. His areas of expertise include holistic economic issues, international trade, industrialization, subsidies, economic dynamism, and global logistics. While Culbertson appears to have an edge in terms of experience and authority, having an academic degree and having served in critical financial institutions in the government, Lincicome’s qualifications are enough to express their viewpoints on the matter while backing it up with evidence. Theoretical and practical frictions from each side can arise from either a close relationship with the government (thus favoring government-centered solutions) or with non-governmental organizations that could be hired by interested parties to support a specific economic worldview.
Personal Opinion
Both authors bring up many valid points: while Culbertson did not offer any evidence for his opinion and mainly spoke in future terms, many of his predictions did come true. At the same time, Lincicome’s numbers and the overall growth of GDP cannot be ignored either. Personally, I believe that the US benefits from free trade more than it loses at this point. The country is still one of the most industrialized nations in the world; therefore, it can benefit from free trade with countries that cannot produce the goods it can. At the same time, the USA is more self-sufficient than Europe, which has suffered logistical and material crises from 2010 to now. They are the primary market for US products, and the country will benefit significantly from trading with the EU. At the same time, they have nothing that cannot be produced domestically. While Culbertson asserts that open trade may be dangerous to the US, that same danger is being posed by the US to others, and the country can capitalize on it.
References
Culbertson, J. M. (1986). The folly of free trade. Harvard Business Review. Web.
Lincicome, S. (2019). The case for free trade. Cato Institute. Web.