Free Trade and "...downward spiral of chronic unemployment..."

[WhiskeyGirl]

An interesting read from a different perspective -

The global economy is a comprehensive and complex system of which trade is only one sector. Yet economists and policy-makers promoting neo-liberal globalization tend to view trade as the entire global economy itself, downplaying the importance of non-trade-related domestic development. Neo-liberals promote market fundamentalism as the sole, indispensable path for national economic growth, despite ample evidence in the past three decades that trade globalization tends to distort balanced domestic development in ways that hurt not only the less developed, but also the developed economies.

This is why a new world economic order must restore domestic development, with sovereign credit as the driving force, and reduce world trade as an auxiliary force in which export should be denominated in the exporting country's currency.

The distributional consequences of predatory terms of global trade liberalization under dollar hegemony work against the developing economies in the world. Such predatory terms of trade also work against the poor and the financially weak in all economies, including the advance economies, putting the less-educated and the less-skilled in a downward spiral of chronic unemployment and persistent hopelessness.

Reductions in tariffs reduce tax revenues for public spending that can help poor people and weaken needed protection for endangered domestic industries. While distributional consequences of trade liberalization are complex and country-specific, the general trend has been to exacerbate income disparity everywhere, which in turn leads to economic underperformance and political instability in all countries.

In the United States, the Mecca of free-market entrepreneurship, spending by the statist sectors - government operations, public finance, defense, health care, social security and public education - have kept the economy afloat in recurring protracted recessions, while entrepreneurial ventures in corporate finance, insurance, high-tech manufacturing, airlines and communication languish in extended doldrums needing government bailouts.

Unregulated markets lead naturally to monopolistic consolidation and abuses in corporate governance and finance through the concentration of market power. It has become clear and undeniable that "free" markets are inherently self-destructive of their own freedom. Free markets depend on enlightened government regulations to remain free and to prevent them from turning into failed markets.

Government, from monarchy to democracy, within capitalist market economies or socialist economies, exists to protect the weak from the strong and to maintain socio-political stability with a just socio-economic order. A new world economic order will have to be based on this principle of universal justice between and within sovereign nations. For China to exert influence on the formation of this new world economic order, it must construct its domestic economic order on the same principle of equality and fairness

more here - http://www.atimes.com/atimes/China_Business/LA12Cb01.html

Can an American business, burdened by government regulation, taxation, and indifference, compete with businesses in nations that promote wealth creation? 

Can such a business compete with the underground economy and illegal aliens?

Free trade only seems to benefit large global business at the expense of Main Street everywhere. 

jmho