Monday, January 2, 2012

Why do people say free trade is evil?

Product availability is one thing, also free trade disrupts economic structures in the sense that depending on what sector you are working in (in the short run) or what group (capital providers or labor providers) do you belong to (in the long run), some will lose and some will gain from free trade. Basically, free trade makes products cheaper in terms of real money in the importing countries than without free trade. The consumers of those free trade products benefit from a larger purchasing power while producers of those products in those importing countries lose their markets to the cheaper products imported from abroad. This is why people say free trade is evil. Domestic producers lose their jobs because of free trade. The economists' umption is that these temporarily unemployed people will eventually find jobs in other industries while in reality, this might not happen. Some live in rural areas and do not have the means to relocate and learn a different skill if crops they grow have lost markets due to cheaper imports from abroad, some people simply do not want to go through the trouble of learning a different skill or do not want to step out of their comfort zone to try a different job than the one they've been working at for the past 20 years or so, etc, etc.

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