How does free trade broaden the gap between the rich and poor?

You, somebody who seems to be ideologically opposed to Republicans, calling an estate tax a "death tax" shows the effectiveness of their rhetoric.

 

I only call it what the media terms it. That's how they garner their support. I am only trying to demonstrate how false their claim is. Their pitch is effective. How do we conteract it, any suggestions?

 

Good point. Too many overlook the role of a country's domestic economic policies and it's role in their development. Trade by itself isn't enough.

 

The answer to the question is pretty simple. Free trade is a system of eliminating tariffs on foriegn goods to promote international trade and to lower the cost of goods to the comsumer. the primary way this is done is by corporations from 1st world countries building factories in the 3rd world.

The common worker in the third world factories doesn't earn enough to increase his own standard of living. Manufacturing and business taxes levied in those countries go to support corrupt regimes.

The reason that broadens the gap between rich and poor is because it has the effect of funneling money into poor 3rd world countries which the common people will never benefit from because the funds go to corrupt goverments rahter than the citizens, combined with lower wages, they will never see an increase in their standard of living.

However, the capitalists and corporations that benefit from free trade arrangements see ever increasing profits because of savings in labor and manufacturing costs. This means the rich make even more money and the poor stay where they are.

One more note on the subject:

Don't get your terminology mixed up.

Contrary to what many believe, free trade has nothing to do with the common farmer being able to sell apples on the street corner. It has nothing at all to do with with being able to trade in one's own country. That is in the realm of free enterprise, which is commonly mistaken for free trade.

The free trade system is simply the elimination of tariffs in order to allow trade between nations, which almost exclusively benefits the rich and powerful.

 

I wish someone could show me a really free trade agreement anywhere in the world.

Freetraders(Neo Cons) love to sing the song, but I know of nowhere that it is a fait accompli.

Post some links.

 

I haven't seen one either. They can probably find something that looks like free trade, but when you dig into it you'll find some hidden approach to gaining an advantage, tariffs are only the most obvious method. For true free trade to work, all parties would have to be open and honest at every step of the process that produces the goods. That would be wonderful but I don't see it happening - free trade is a fairy tale.

 

Ron Paul On Free Trade

Well if you really want free trade then you may consider voting for Ron Paul.

 

Freetraders have nothing to do with Neo-Cons. Nothing whatsover.

Neo-Conservatism has everything to do with asserting America's cultural, and in some cases, military, dominance over the world. To be involved in everybodies elses business.

Free Marketeers simply want to trade & earn a paycheck with as little government interference, and taxation, as possible.

There are plenty of Free Marketeers in the Democratic Party and on the left in general.

 

Free trade brings employment to the production worker in the 3rd world. These folks may have worked at sustinence agriculture or bartering before the factory came to town. Now they get paid in cash for the first time, not a lot of cash, but its a step up.


If corrupt 3rd world goverments take a "rake-offf" from industrial production that says more about those goverments than the capitalists, plenty of these goverments are rotten, its not a hit on free trade.

Better to trade with the developing worls, allowing them to earn than to be providing subsidies, and loans they can't repay. Or to have the nationals emmigrate to your country seeking work.

 

The gap between the rich and the poor is broadened through free trade by the expansion of the middle class. And through governmental control of minimum wage, and high corporate tax rates.


And we shouldn't forget the unions. You want to stop corporations from enslaving chinese kids, just get your politician to eliminate your local 304.

 

What corporations pay anything close to their fair share of the tax burden?

Minimum wage...give me a break the working poor hadn't received an increase in the minimum wage for over ten years, how many corporate executives went that long without a raise. If they had done it voluntarily legislation would be necessary.

 

The difference between minimum wage workers and corporate execs is that the min. wage earners don't deserve raises.

Being forced to pay minimum wage to someone who deserves less is taxation.

 

You are a big joke, and part of the problem. There is no such thing as free trade. Show me one instance. It's a marketing term that is supposed to make us feel all warm and fuzzy, while the rich protect their assets and continue to exploit the labor pools that make them rich.

 

So are you saying there should be no middle class? That the world would be better with only the obscenely rich and the poor.

Unions did away with child labor and allowed most of us to only work five days a week. They brought to the forefront safety concerns for the workplace. The rich would love for the workers to disband their unions and work groups. Why because they could then do whatever they liked. You think they would look after your interests if they weren't forced to? You think they would sell you their products for less once you gave up your rights to negotiate and whatever little power you have of oversight over their practices?

If you do, you live in a fantasy land. China has had no unions or organized labor that's why their government and US investors and industrialists can use their children in that way. I guess you would wish that on US children and citizens.

 

Me thinks there's some confusion here regarding free trade versus fair trade. You can try to defend big business all you want, but the bottom line is when left to their own devices, corporations will inevitably exploit people whenever possible, because their over paid execs justify their salaries by maximizing profits, despite the fact that better conscience would dictate otherwise. Furthermore, I'm not sure how you can justify that the execs somehow earn their inflated salaries, simply because they were able to manipulate the laws in foreign countries to maximize the exploitation of the workers there. It's the workers who add value in the commodities they produce, so they should be the ones who get compensated for it, not some asshole in a pin stripe suit who sits on his ass all day attending business luncheons. Those arrogant bastards do nothing tangible for anyone.

As for the decline of the middle class, a majority of us stand to lose from this phenomenon, as fewer and fewer of the wealthy elite hoard more and more of the resources, while the rest of us become assimilated into the working poor. Unfair distribution of resources leads to resentment, desperation, and even terrorism. When will they learn?

 

I am happy that corporations pay payroll tax. They pay real estate taxes sales taxes. God knows what other taxes.

Lets keep those payrolls here in The US.

What does our goverment need more money for? They suck enough out of our already fragile economy. They can't keep track of what they do take already.

 

Holy shit. You need to relax over there. Watch that blood pressure, ya know? I don't know if I want to converse with someone that opens with an insult.

I agree that free trade does not exist. I am always hesitant to use the phrase. It is inaccurate to talk in such absolutes. Perhaps we should use more accurate comparative language ... talking of freer trade and freer markets.

 

No. I don't think anyone in their right mind would say that the middle class ought not to exist. It is absurd to think that it couldn't exist. Nevermind whether or not it should exist.

Interesting.

I have to disagree.

We have to keep in mind that we are writing to one another in a Globalization forum. It is important, and very pertinent, to keep in mind that economic globalization is a facet of global interaction. The fact that unions have not done away with child labour is made self evident by your willingness to accept that child labour is used in China.

Because of Globalization, we are forced to look at the issue on two levels. The first is within the immediate community. For the community as a whole, with a stable level of prices, higher wages without unemployment can be sustained for one group only if some other group is pressured to accept unemployment or lower wages. If there is not some lowering of wages or some unemployment, there will not be sufficient demand in the economy for the higher wages to be sustained. Certainly strong unions may win improvements in wages for their own members, but in the long run this can only be at the cost of lower employment levels or a reduction in wages and employment in other industries.

In a global economy this union activity, combined with a forced minimum wage, sees corporations forced from educated and productive labour pools into undereducated and unproductive labour pools through simple market forces.

I'm assuming that by 'the rich' you mean managers and higher earners in the corporation. If that is the case, then you are right that the rich would love for workers to dismember their unions. You are wrong that they would love it so that they could 'do whatever they liked'. They would love it so that they could pay market price for labour. Would you rather have your product produced by a five year old uneducated chinese child, or a twenty five year old educated american man?

The rich, in a freer market, would look after their own interests, and I would look after my own. Market functions, allowed to function unrestricted by unions, taxation, and government control, would act as the balance between what they are willing to pay and what I am willing to earn. While they may not care what the individual has to say about their practices, they will care what the market has to say about them.

The last part of your post is not worth responding to.

 

Unions did do away with child labor in the developed world, it's only recently that we taken giant steps backwards in order to line the pockets of the obscenely rich.

I'd rather pay a fair price for a product produced by whomever is more productive and produces a product I can use and be proud of owning.

Who controls the salaries of the higher end employees in corporations, why don't their salaries ever fall or their golden parachutes ever evaporate when they take their corporations into bankruptcy? Why should the workers give up their ability to negotiate?

So we are to accept no rights in order that CEOs of corporations like Enron can pay their upper management outrageous amounts...it doesn't wash! The obscenely high wages of executives should not be maintained. It's time to start cutting at the top, where the buck should have stopped in the beginning.

I no longer buy Chinese goods!

 

The fact that the disparity between the wealthy and the rest of the population is increasing is proof that the current system isn't working. Unfortunately, people in poverty, the segment of the population whos numbers are increasing, often don't have the option not to buy Chinese goods, because they can't afford to do otherwise.

We should impose a wage scale on US corporations like we did on Japan, one in which the highest paid workers (the CEOs) have a salary cap that is X times the salary of the lowest paid workers, and that would include the workers who are employed by the corporation in foreign countries. Then everyone benefits, and the CEOs are held more accountable for their actions