Question

You are watching the PBS NewsHour on public television. The first focus segment is a discussion of the pros and cons of free trade (lack of obstructions to international trade). For balance, there are two economists present - one in support of free trade and one opposed. Your roommate says, "Those economists have no idea what's going on. They can't agree on anything. One says free trade makes us rich. The other says it will drive us into poverty. If the experts don't know, how is the average person ever going to know whether free trade is best?" 1) Can you give your roommate any insight into why economists might disagree on this issue? 2) Suppose you discover that 93 percent of economists believe that free trade is generally best (which is the greatest agreement on any single issue). Could you now give a more precise answer as to why economists might disagree on this issue? 3) What if you later discovered that the economist opposed free trade worked for the labor union. Would that help you explain why there appears to be a difference of opinion on this issue? And sure, we all know "the answers" are out there, but as we know from our academic integrity policy, that's not the point. I really want to hear you explain your thinking using your own words. If I sense you are using someone else's words I will not be able to award you full credit. You will observe these questions have many "right answers", what I will be looking are thoughtful responses that help me understand your thinking. Namaste (the light within me honors the light within you)

Answer 1

Free trade

1) Free trade has got its own advantages and disadvantages. It doesn't mean that we only consider one side of the coin, as the others side may cause more harm than the good. Yes, free trade leads to lower price, high quality products, wide choice of goods, growth of the economy, efficiency etc.

Economists might disagree with the concept of "free trade" as it has got the other side more dangerous. Opening the market to foreign companies do more harm to the domestic producers. Without protecting them, growth and development have no room in the economy. Higher demand leads to higher imports thus resulting in trade deficit ​. This again open the way to national debt hence forcing the respective government to raise taxes making cost of living much higher. ​​

2) If at all 93% of economists believe that free trade is generally the best, they can't resist the other side of the coin. It is clearly visible that free trade has helped countries in growth and development as a whole. But when individual growth is considered, it is difficult to state that free trade has done more good than bad. "The rich remains to be the rich, and the poor remains to be the poor". The rate of unemployment is increasing with rise in population and fall in job opportunities. Brain drain is one of the major issue. Companies adopt off shoring policy to ascertain low cost of production and other similar advantages which leads to more number of unemployment. People find it difficult to find a suitable job and end up in the state of disguised unemployment. Domestic producers find it difficult to compete with international companies, hence dissolution takes place. It's a fact that has to be seriously considered to protect people from a miserable living.

3) If the economist who's against free trade works for the labor union, it is a contradiction. Someone who opposes free trade and supports the labor union shows the incapability of the concept of 'closed economy'. The economist might have looked at the negative sides of free trade and could have supported the latter model. Since, every policy has its own drawbacks, the intensity of outcomes are to be considered. There are differences in opinions regarding free trade because the policy does both good and harm to the economy. Free trade can bring poverty as well as rich status at the same time. While some are better off, others may worse off which is an inevitable phenomena. No one can claim that free trade has done only good or only bad. It has brought up a combination of both. So it seems to be hard to decide upon the impacts of free trade as it has become an inevitable part of growth and development.