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A Minnesotan economist mourns the loss of his childhood love -- the iconic toy trucks that used to be made in his home state -- to free trade. Economists favoring liberalized policies will have Americans believe that for every loss of economic opportunity, there's an equivalent or better offset. In an ideal world, perhaps.
A recent appearance by the director-general of the World Trade Organization cheering on behalf of the benefits of trade got MinnPost contributor Louis Johnston thinking about what the United States has lost as a result of more liberalized import/export policies.
Tonka trucks used to be made in the USA. Eventually those jobs fled U.S. shores, thanks to free trade, but were replaced by new ones with higher earning potential in pace maker production, iron ore extraction and agriculture through improved export opportunities. That is the story of progress that proponents try to tell when talking free trade.
But there's a flaw in their logic. The skills used to make toy trucks are far different than those needed to produce pacemakers. The transition requires added investment that trade cheerleaders fail to factor into their cost-benefit equation.
Wrote Johnston, a professor of economics at the College of Saint Benedict and Saint John's University, in the MinnPost: "In the basic story, workers and capital move from producing toys to producing pacemakers with little or no cost. We know that’s not the way the world works. Someone who worked for years building toy trucks might not have the skills to assemble pacemakers, or they may not even want to do something different."
Read all about it: http://bit.ly/JNFRmE.