Saturday, September 01, 2007

Encourage Worldwide Economic Competition

Tibor R. Machan

Bob Herbert of The New York Times seems to want job protectionism in America. Why else would he send out a warning, in his September 1st column, to the effect that “American families are trying to make it in an environment in which employment is becoming increasingly subject to worldwide competition.” Yes, and so what? Is this supposed to be a bad thing?

In fact worldwide competition is the best answer to worldwide poverty. The more those who have been left out of reaping economic benefits from work get into the race, the better chance they have of catching up with those who have been enjoying freedom of entry for decades. And that is just what American workers have enjoyed far more than others around the globe, a free market in employment.

Now mind you, there is no fully, consistent free market anywhere and has never been. Some folks have always had certain government-granted advantages at the expense of others. Many of America’s farmers are a notorious example, managing as they do to purchase for themselves political influence that keeps farm goods away from American consumers and thus makes it more expensive for us all to live. It deprives all of us in the market place from the benefit of purchases that might have been made with resources that would have been saved by buying low cost foreign farm goods. And this scenario is widely repeated in other goods and services that gain government protection from competition.

What is wrong with such protection? It involve the coercive exclusion of some market agents from gaining a chance to offer their goods and services to prospective customers. It is like one store in your neighborhood managing to purchase the services of the local police for purposes of shutting down other, competing stores. This approach to commerce is unjust and also leads to people working with the illusion that they are entitled to special privileges. This is a serious source of corruption, like much of professional licensing and all non-competitive distribution of government contracts.

Why does Mr. Herbert seem to favor such a policy? Why does he suggest that the American government ought to put up barriers to entering the market for working people abroad?

Perhaps like some other champions of protectionism, Herbert is a nationalist who thinks that it is fine to impose burdens on non-Americans—as well as millions of American consumers—so as to prop up industry that isn’t cutting it in the world market. This “my country right or wrong” attitude is not only grossly unjust and violates the rights of innocent people abroad as well as domestic consumers but it encourages economic complacency which, in time, will leave American workers lagging behind in productivity and efficiency. Why should one work hard, be ingenious and inventive, if one can keep one’s business going by coercively keeping competitors out of the way?

That policy can only work for a while. In time competitors tend to find ways around the barriers by, for example, making deals with businesses in countries that aren’t being kept out for various reasons—they have favorite nation status or their work is seriously needed here. And by this roundabout method they will manage to undermine the protectionist policies Mr. Herbert and others appear to rely on so as to give a short term leg-up to domestic economic agents.

Sometimes it is useful to look at international sports to grasp the nature of competition. The recent track and field world championships were free of the kind of unjust favoritism Mr. Herbert and others like in the economic sphere. Superb athletes, many of them Americans by the way, were not excluded from competing in various events simply because their superior skill and training made it very likely that they would defeat others in the race. Any kind of protectionism like that would immediately be seen as having a corrupting influence on sports across the globe.

Why won’t Mr. Herbert and other protectionists recognize that the very same results from economic protectionism?

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