Free Trade has become a dirty word with respect to manufacturing
jobs. Why? You ask. Simple, manufacturing due to free trade gets
concentrated into countries where it is cheapest to manufacture goods. As
such, factory jobs disappear in other countries increasing unemployment.
So despite the consumer getting a cheaper product, their nationalism and
the idea of job losses taints the very idea of free trade. But there is a
component of free trade that reduces the pain job wise. In this case it
is free trade on services. Allow me to explain.
Free trade on Services: While manufacturing jobs are destroyed by free trade because every business wants their goods produced in the cheapest way possible so as to save costs while increasing sales. Services do not destroy such jobs, for they can be provided literally to anyone anywhere. First and foremost, I must explain what a service is. An example would be insurance companies. They provide financial support for people who cannot afford medicine out of pocket, or to repair damages to people's house. Essentially, they provide money for those situations that would otherwise bankrupt you. Banks are another example, in which they provide a place to store your money safely. These are services. It is the providing of a non-tangible product to meet a public need. Another example is a cell phone company, power companies and even legal services by law firms. All these are services where you give money to these businesses and they provide to you some form of service. But this is very broad for this even includes maids and potentially even prostitutes. Thus, we are going to narrow it down to anything that does not require actual physical contact with another individual, and no need to ship anything. As such, we are talking about computer programming, online tax help, and online legal help. These activities do not harm our manufacturing jobs for they are not built by hand in the traditional sense. Also, they may need impute or aid to complete, create, or provide from multiple places around the world. So, unlike traditional manufacturing jobs which are stuck in a single location or country, services traded online are global and thus flexible. They need not have brick and mortar facilities as they can be provided from the seller from the comfort of their own home. It is these services that free trade should embrace. Can you imagine how much cheaper health insurance would be if we had the entire world's health insurance companies vying for your money. Contract with any company for computer support. Video Games can be made by anyone and sold to anyone with a simple download. Architectural designs can be delivered via the internet, and then printed at the worksite. No jobs lost here as everyone can provide the services at their cheapest no matter where they are. However, the fact that we do not have free trade on such businesses results in stagnation of prices and innovation. We need the competition of these internet traded businesses to enhance and improve quality of services while making them compete to provide them at the lowest cost. Which is exactly why competition needs to be maximized to where everyone can compete with everyone else.
Conclusion: Basically we want online services to
compete in the same way news has become everyone competing against one another.
You have a bunch of bloggers, radio hosts, people who do podcasts, and
regular news people competing with each other. Everyone becomes everyone
else's competition. Hence why free trade enhances and provides a bigger
platform to get to that ideal. A place where you can get help from a
doctor in China via online video, or to bank with a company in a tax haven all
without leaving your home. Free trade makes this a reality, because all
can compete without fear of losing a job to an overseas company because you
cannot produce the same good for less like with manufacturing. For you are
not producing a good, but a service where the price can be adjusted and sold
cheaper with a simple click of the mouse so as to keep your customers coming
back. Though you still have to make sure your services quality is good.
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