Free Trade, Mass Immigration – Shibboleths Blocking Debate

At birth, a fresh idea encourages thought, but not
all ideas age well. Some turn into shibboleths that
block debate.

Today shibboleths rule over thought. Consider the
idea of “the public interest.” This idea was once useful
to restrain the arbitrary power of kings. But today
every self-serving politician and interest group claims
to be advancing the public interest, thus justifying the
growth of government and spending programs.

Yet, as the clamor for “campaign finance reform”
proved, no one can find a public interest that is
served. We hear instead that money buys influence and
that government is sold to the highest bidder. The
solution–to take money and, thereby, the debate it
finances out of politics–is itself a shibboleth.

Even “free trade” has become a shibboleth.

Adam Smith
in 1776

that productivity was enhanced by
specialization and division of labor. The limit to
specialization was the extent of the market. Thus,
expanding trade beyond national borders would produce
mutual benefit from each country specializing in areas
where it was most productive and meeting its other wants
through international trade.

Today “free trade” has come to mean opening U.S.
markets to those who do not open their markets to the
U.S. To meet this competition U.S. firms locate
factories in low wage countries in order to be able to
compete in the American consumer market.

Free traders think this is fine as long as the
American consumer is benefiting from a lower price. But,
of course, if specialization and division of labor means
shifting production to low wage countries, the U.S.
population will find itself “specialized” in selling and
servicing imported goods.

A just released study, “Divergent
Paths,” from the

Russell Sage Foundation
shows a shift in U.S.

white male employment
from high wage manufacturing
jobs to low wage retailing jobs.

Comparing white males who entered the job market in
the mid-1960s with those who began working in 1980, the
study finds that “workers in the recent cohort are less
likely to rely on goods-producing jobs and more likely
to hold service sector jobs.”

Moreover, “job growth has been concentrated at the
lower end of the service sector, with poor wages and
career prospects, rather than in the professional,
high-tech, and financial sectors more commonly
associated with postindustrialism in the popular press.”

As the U.S. begins to specialize in low wage jobs, it
is not surprising that “wage attainment has
deteriorated.” Median real wages of white males in their
early to late thirties who began working in 1980
declined by 21 percent compared to those who entered the
job market in the mid-1960s.

Adam Smith did not think of free trade in terms of
British industrialists shipping their capital and
technology to

low wage countries
from which to produce for their
home market. He meant that the British should not
subsidize the production of wine and perfume in order to
compete with France but, instead, focus where Britain
had advantage and trade with France for wine and

Consider the way the U.S. “free trades” with China.
The Chinese can sell to U.S. consumers goods
made in China with Chinese labor
. The U.S. can sell
to Chinese consumers goods made in China with Chinese

U.S. firms “export” to their subsidiaries in China
unfinished or semi-finished goods where Chinese labor
adds value. The goods are then “imported” back to the
U.S. and sold to the American consumer.

The upshot is that both American and Chinese firms
produce for the U.S. and Chinese markets with Chinese

U.S. labor
is not in the picture.

Free traders are out to lunch when they say things
like: “Oh, let the Chinese have the low wage textile
jobs,” implying that the U.S. retains the high tech
jobs. The reality is that the U.S. has had a trade
deficit with China in

advanced technology goods
since 1995.

How could free trade result in a high-tech first
world country having an advanced technology goods
deficit with a third world country?

Perhaps a 1999

U.S. Department of Commerce report
has the answer:
“Technology transfer is both mandated in Chinese
regulations or industrial policies (with which U.S.
companies wishing to invest in China must comply) and
used as a deal-maker or sweetener by U.S. firms seeking
joint venture contracts in China.”

The Commerce report looked at three industry sectors:
automotive, aerospace and consumer electronics. Findings
in each sector were the same. Establishment of
technology development centers is the key to gaining
permission to locate plants in China.

Free trade
with China boils down to U.S. firms
purchasing Chinese labor to produce for the U.S. market.
Wage attainment of U.S. white males will continue to
deteriorate as the proportion of U.S. labor involved in
the production of high wage advanced technology goods
declines. Having shipped out the jobs that pay, U.S.
consumers won`t be able to pay for the products they are
accustomed to consuming.

The U.S. already has the export profile of a Third
World country. The massive influx of poor immigrants
from the Third World and the outflow of advanced
technology will complete the transformation of the U.S.
from a superpower into a colony.

Paul Craig Roberts is the author of

The Tyranny of Good Intentions : How Prosecutors and
Bureaucrats Are Trampling the Constitution in the Name
of Justice