Free Trade Increases Productivity Because It Kills Jobs, And That Can Be A Good Thing

Alright, let me get one thing straight: The TTP would definetly be bad overall for the US, and NAFTA probably was bad overall for the US. On the other hand, it has to be said, that both also undoubtedly help those poorer countries where jobs are shipped to. Sure, for American standards those sweatshop jobs are horrible, but the truth is, without sweatshops those workers would be entirely without income, which is even worse, which is the reason why they choose to work there. That means by having free trade between a rich country such as the US and poor countries like Bangladesh, we massively increase the standard of living for Bangladeshians, but it does also cost the jobs of American workers. 

It's kind of a tricky thing figuring out whether to do this trade off, considering all the people in the US who went on to lead a poor and depressed life after most people in their town in the Rust Belt lost their jobs. But it is undeniable that being poor in America is not anywhere close as bad as being jobless in Bangladesh, as horrible as it can be with health insurance being out of reach and people dying from poisoned water in America, because in Bangladesh you quite literally starve if you can't care for yourself. In part because of trade agreements that enabled companies to outsource production using sweatshops, Bangladesh has reduced its extreme poverty rate from 82% in 1972 to 13.8% in 2016, and is projected to eliminate extreme poverty, which means living on below 1.9$/day, by 2024. Undeniably, doing this trade off reduces total suffering, and it also vastly decreases the amount of extreme suffering in the world, but it's still understandable that American workers don't want to have their jobs taken away, because in America you still suffer if you are out of work, even if not as badly as in South East Asia.

While the example of trade agreements that basically revolve around straight-up outsourcing always has this bad taste of moral conflict to it, I think free trade agreements between equally rich countries almost always benefit both - provided of course the agreement doesn't  include for instance a section where corporations can sue the state for cutting profits, or a reduction of consumer protection, as planned with TTIP, which is basically TPP between the EU and US. While the free trade eliminates some jobs, that is only because it has become unnecessary to do the same job twice when one side produces them more efficiently, which BTW is always the case, almost per definition one side is always slightly ahead. If you're a company in the EU that needs to buy screws from another company, and you usually bought them in Europe, maybe if the tariffs are eliminated it then becomes cheaper to buy them from a US company who produces them more efficiently. That eliminates some EU jobs, but at the same time the EU company could produce their hydraulic presses more cheaply which means they can employ more people to produce hydraulic presses. Then maybe a US company decides to buy those cheaper EU hydraulic presses for their production as they have become cheaper than the US ones they bought before, so that US company can also employ more workers. Since economies are quite large and complex, this will of course average out, so that in the end, if we're lucky the new jobs are actually more than the lost ones overall. And what's definetly going to happen is that products become cheaper, because of the increased productivity, which also benefits both countries.

If you don't believe me, imagine every city in the US had a tariff on every import of 50%. Can you honestly see any sort of large-scale productivity going on here? In an economy where you need to pay 50% more if you need to import steel because your city doesn't have it, and then you need to build the car you also need to pay 50% extra on tires from a producer that had to pay 50% extra on the rubber he imported to build the tires. Since every tariff per definition tries to reduce the amount that's traded, this would result in terrible inefficiency. I don't think this is an "argument ad absurdum", it just shows the downsides of tariffs. Usually of course they're not that extreme because the tariffs are not quite as large, and because today's free trade zones are already quite large, such as the EU. The EU BTW, in turn, was also originally a "radical idea of free trade", because - for any American readers that aren't involved in European politics - the member countries of the EU are still and always were autonomous countries with its own governments with its own militaries and state departments and everything. But they came together to boost all of their economies by having this free trade bloc, and of course also to reduce the threat of war, which is impossible if your economies are that entangled. In fact, the EU's largest member, Germany, also used to be a collection of literally hundreds of tiny city states, just as in the ridiculous example I just made. How good do you think those tariffs were for the economies of each of the German states at the time?

But even if they do cost jobs: Provided you don't live in a third world country where poor people and seniors have so little money that cutting pills in half to save money is seen as a "savvy" trick, being without work is of course bad, but compared to poverty in South East Asia, it's almost acceptable. Even in many European countries with their social democracy you still suffer if you're permanently out of work, but in a fair system, that wouldn't be the case. I personally think a negative income tax, where you get for example 50% of the money that you lack to 2000$/month would be adequate, because you can never fall below 1000$, but still have a good incentive to work. 

Jobs are only seen as vital by people because we need them today to live a financially acceptable life. But in the next few decades, human workers will inevitably lose more and more ground to automation, and soon enough, we will have a good chunk of our population out of work, by no fault of their own. And crucially because the things we need are already produced without human work, we don't even need to give people an incentive to get a job, what good would working be then? I wanted to talk about automation not to show some grand vision of a world where everybody can do whatever he can because he receives a check in the mail of 2000$/month, paid for through corporate and sales taxes, but because I want to show that jobs aren't necessarily necessary to our well-being. In essence, free trade agreements increase productivity, which means we have more resources to care for those who lost their jobs, which doesn't even have to be anyone overall if the agreement is between similarly rich countries