Re: POTUS 45:52: Not Founded On Anything
My layman's understanding:
Free trade benefits labor as a whole by increasing trade but it harms expensive labor by forcing it to compete with cheap labor. To take advantage of the benefits of free trade, expensive labor would have to relocate to the source of cheap labor, take a cut in compensation, but have a net gain because of the relative drop in cost of living. But even then quality of life in areas of cheap labor is typically much lower so it's probably not a good trade, and anyway people just cannot move around the way capital can.
Free trade also harms expensive geographically anchored assets like particular mines, farms, forests, fisheries, etc.
Because the US led (dominated) the world economy after our WW2 growth spurt, free trade was always going to harm our poor and lower middle class. It would help our upper middle class (cheaper consumer goods, jobs not at risk) and our rich (investments grow by moving jobs overseas). It would also help the world, obviously, and it would help us if we could raise the world's poor to the point where abject misery decreased and stop driving terrorism, revolution, resource wars, and general instability. As the world's poor became richer they would also demand more rights thus increasing democracy overall which would also help make the world less volatile.
But. This plan could only help our poor and the lower middle class if we took the increased revenue from the expansion of trade and massively plowed it back into helping our poor and lower middle class make the transition to a post-labor economy. We were taking away their jobs. We couldn't just leave them high and dry.
This actually happened before, albeit more gradually and far more locally, when industrialization moved the locus of labor from the largest cities to smaller cities in the period 1850-1950. In fact it's what built the Rust Belt in the first place, and it's also what drove the disintegration of our largest cities. We have a welfare state in large part to compensate for that relocation. We pulled it off because it also coincided with depression and war and the massive "industrialization of government" of the 20th century.
But beginning with Reagan, the American upper middle class and rich became too entitled and stupid to understand that's how we build a prosperous country and the right was always there to assure them they "deserved" tax cuts, and that government was "the problem." So, our trade policies (which continued and accelerated) ripped off our workers but didn't compensate them, and our rich got so much richer they were able to take control of our democratic institutions and ensure their gravy train would continue in perpetuity.
