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by FabHK
442 days ago
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Thanks for illuminating the mindset. One thing I want to say in support: The argument in favour of free trade is that it increases the pie, so that everyone can be better off (a Pareto improvement). However, given that trade does produce winners and losers, this argument is predicated on redistribution, namely (over)compensating the losers. That second part of the argument in favour of free trade is often conveniently forgotten. So when that redistribution doesn’t happen, then opposing free trade is quite rational for some. |
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(1) The comparative advantage of a country is that they do not have strict environmental standards and becomes the low cost leader in a "dirty" industry.
(2) An individual in the rich country loses their job to an individual in the poor country who produces exactly the same level of output at lower cost and the individual in the rich country ends up having to subside on government benefits
For both of these examples, shareholders profit financially from the outsourcing (and so I would argue it is likely happen) even as the world in example 1 or the rich country in example 2 loses out.