And your choice of currency?
Good question. How about the Globo? yeah, I know, it's not a very original name, but I'm sure we could come up with a reasonable name for it.
The basic problem we have is that Free Trade has NOT worked. It's promises have NEVER been realized. The prior period to its onset of 1946 -1971, when a comprehensive system of tariffs, and currency stability through the Bretton Woods Agreement was in place, did not produce a bitter, ennervating trade wars.
It produced the greatest period of prosperity, and equitably shared economic growth in the history of the world. What has happened since we accepted these promises of Free Trade and monetarism. We have become increasingly de-industrialized.. industries like steel, and manufacturing in general have collapsed to a shadow of their former selves. We have now returned to a colonial status of exporter rather than processor of our natural resources.
The labour market is now saturated with low paying service jobs. Permanent, well compensated life long jobs with secure benefits and pensions have all but disappeared for young people. In their place is contract work, no benefits or pensions, and a roller coaster ride of economic ups and downs.
In the 1950s a middle class Canadian family could survive with one bread winner's income comfortably. Now even with two incomes families are barely making ends meet, awash in debt.
Due to the dictates of monetarism (free trade in money).. we have lost the ability to sovereignly set credit and monetary policy aimed at economic growth. We are forced into reflexive action to protect the value of our currency.. irregardless on its effects on industry.. dictated to us by an anonymous global investment organism and rigged markets. This wild beast viciously threatens 'retaliation' to any nation that dares to declare its economic independence.
Nations all over the globe are in crisis. Former 'examples' of the benefits of Free Trade like Ireland, Greece, Spain of the EU are being forced into austerity regimes. Even its major founders in France, Britain and Germany find themselves awash with debt, and cutting deeply into the social programs. In a time when technology should be increasing our wealth, we see entire nations forced into bankruptcy and poverty.
Free Trade has been worse than a failure, it has been a criminal fraud responsible for impoverishing us, and polarizing wealth in our nation. It is also unsustainable. The next big crash is just around the corner. The whole system is like a bouncing ball on a downward stair case, losing energy every time is hits ground, never regaining its previous height.
I think you're simplifying things too much. Indeed free trade kills jobs. Why? Because it's more efficient. To take an example, imagine that Machjo Ltd. has a factory in Quebec, and one in Washington State. Now imagine we have a protectionist policy. As a result, my factory in Quebec will also sell goods to BC residents, just as my factory in Seattle will sell products to New York State. Now of course the cost of goods will be inflated because of the added overhead caused by having to buy more trucks, hire more truckers, and buy more gas to get products to their destination.
Now imagine we lift trade restrictions and have free trade. Suddenly, it makes more sense for my factory in Quebec to sell to New York State and my factory in Seattle to sell to British Columbia. As a result, truckers are laid off, we buy fewer trucks and less gas, we use roads less, and so governments need not build as many freeways, meaning more road construction workers are laid off, etc.
On the other hand, the cost of goods goes down, meaning that the extra cash could go towards buying other products and thus create jobs elsewhere. Looking at it that way, tariffs and quotas merely contribute to make-work jobs rather than economically productive jobs.
While I fully agree that governments have failed to ensure a smooth transition to free trade and ensure full employment, I will not say that those 'good old days' were so good either. For the most part, though indeed there were more jobs, there were also more make-work jobs and so the price of products was more expensive too owing to the economic inefficiency of the protectionist system. Free trade eliminated some of those economically burdensome make-work jobs, and that's a good thing.
Now while it may be true that society then did a better job of ensuring a more equitable distribution of resources, that was done in spite of, and not because of, protectionism. If anything, with protectionism pushing prices up, it likely hurt the poor more than free trade did.
We can learn from the experience of Fascist Italy during the battle for wheat. Prior to WWII, Italian farmers produced little wheat but many other profitable crops, which they then exported at a profit, allowing them to then import wheat and still keep some extra cash on hand. Mussolini wanted none of that. He wanted economic independence and so launched the battle for wheat. He won that battle, what production increased, and Italy became more economically self-sufficient. However since what was less profitable than what farmers produced before, they actually became poorer. It simply made sense for Italy to produce what it did best and import the rest. Why not learn from history?
