Free Trade?

“Lunch time comes around and you are tired of your store bought cookies that mom packs everyday. Your buddy across the table has a chocolate chip muffin that was baked the night prior. Your friend looks disappointed at the muffin and longingly at your cookies. Likewise, you are staring and drooling over the delicious muffin, so you propose a trade, the cookies for his muffin. Your friend agrees and both of you are happy.” Using the above analogy the basic premise of free trade is found, however the person with the cookies could bake the muffin themselves and not have to trade away the cookies, but the effort and resources involved is much more difficult than the trade. Learning how to bake, spending money and the materials needed, and the time requirement all are more demanding than the trade; the problem then arises when the person with the muffin realizes this and decides to take advantage over the cookie person. They may require more than just cookies, or may require that the person with the cookies only trades their cookies for his muffin. Or the reverse could happen and one can make both easily, but decides to only make one and trades with the other because it allows the person to bake/buy more muffins/cookies and thus allows a greater range of trade. This analogy describes the process of trade and some of the reasons why countries trade with one another but it does not develop the problems trading have because the analogy works only on the individual scale, on the larger scale problems such as; draining a country of its resources, depletion of world cultures, and the abuse of labor forces, arise but are combated with the arguments; globalization provides economic growth, stability throughout the world, and the promotion of human rights. Globalization is a powerful, unstoppable, force that has a good and bad side, however it is going to happen and in the end globalization will benefit the world more than harm it. As a force globalization will bring potential peace and stability to the world.
Drained Resources vs. Economic Growth
An argument against globalization claims that the countries in power drain the weaker countries to stay in power. A prime example is Brazil. Brazil’s largest natural export is wood that is cut down from rainforest and other places. This resource is only partially renewable in time and so is depleted faster than recreated. Brazil uses this resource to trade for manufactured and process goods like equipment and necessary materials for the industrialization of the country. Therefore Brazil loses resources in the hopes to become a stronger industrialized nation, the argument against this process is that because other countries provide the funds and materials to industrialize Brazil in exchange for the natural resource, they drain Brazil of what is the base necessity for anything brazil could make and also produce what brazil could produce at a cheaper cost, therefore Brazil may never become strong enough to compete with the world powers and thus never grow. However this is speculation by those who are against industrialization through globalization. The speculation cannot be conclusive because enough time has not passed to see Brazil complete its process, but a growth can be seen in Brazil’s economy over the pass 20 years, after it started the process of industrialization, therefore the process of free trade has helped Brazil so far and therefore is a strong indication that globalization is more helpful than detrimental.
Depletion of World Culture vs. Global Stability
“The beauty of globalization is that it can free people from the tyranny of geography” (Legrain, 2). An argument against globalization is that it prompts cultural imperialism. The country that spreads the most in trade will build more of their culture with the countries they trade with and deplete that country of its own culture. Arguments that support this claim are MTV, McDonalds, Coke, and Hollywood. However the arguments miss one important fact, the use of these industries in the countries. In Thailand MTV promotes Thai music singers, McDonalds specializes its food for the culture it serves, in France McDonalds serves pizza along with burgers and fries while in China it serves noodles as well as the burger and fries. The only strong argument is Hollywood and that has large weaknesses because the top directors and stars are not American as well as a majority of studios are foreign owned, Hollywood just happens to have a start in Hollywood but is a promotion of culture in its own countries. All of this trade of culture between countries promotes stability. It is harder to trade products and gain economic growth when warring with a country you trade with. Also this trading promotes democracies and democracies rarely war with one another. Some claim it to be the Imperial Peace proposition but that differs greatly from the democratic peace proposition. America is allied with most of the western hemisphere and does not war with democracies, however US allied democracies war with US autocracies more than with US allied democracies. Therefore the imperialism peace proposition cannot apply. Democracies are able to promote peace for the strong argument that commerce is strongest in democracies and that commerce promotes moral capital, which has a civilizing and pacifying effect on statesmen and civilians. (Weede, Globalization Can Prevent War). Therefore free trade does not promote culture imperialism but promotes peace and is more likely to prevent war.
Abuse of Labor vs. Human Rights
One of the most convincing and probably incorrect arguments against globalization and free trade is the abuse of Labor pools in third world countries. The argument is appealing when compared with strong economic countries. The argument compares wages and conditions in countries like America with those in countries like Malaysia. The argument claims that Multi-national Corporations abuse the labor pools by paying them less than what they pay people in other countries and by overworking them. This is a completely ridiculous argument in those terms because paying a worker in Malaysia 8 dollars an hour will flood their economy with wealth creating inflation of prices for everyday basic needs and those who do not work in the corporation factories/plants cannot afford to live anymore. A person must look at the wages of the host country and compare those with the wages multi-national corporations pay. A close look at this will show that corporations on average pay more than other jobs in the host country, providing wealth but not an excessive amount of wealth that will flood the local economy. The opposing argument is the promotion of Human Rights. When a corporation comes in and pays wages to the employees that are normally higher than the other jobs it causes those in other jobs to demand higher wages and thus starts the promotion of human rights. Labor forces start to pool together and make demands on bother country and employers which allows them to gain some power and rights over conditions; this in turn creates activists who seek rights to benefits and eventually creates unions and other such facilities. This promotion of human rights and welfare is the result of just one person getting paid more than their neighbors. The idea of jealousy and capitalism thus promotes human rights and therefore promotes globalization. So in the end globalization and free trade provides opportunities that were not available before and thus makes globalization a force that helps labor pools, not abuse them.
The Perspective of Multi-National Corporations
As a student in Dr. Cremona’s International Political Economics class I was able to participate in a mock setting of the conference between multi-national corporations, the IMF, and the World Trade organization against interest groups, the devos economist and union leaders. During this activity I was the role of a multi-national corporation, namely Nike. As Nike I did research into products and their environmental safety, what the company does to promote wellness in other nations, and their policy. The conference resolved many issues I had with globalization and I learned a few things. The Nike Corporation is actually not the sludge it is presented as. The company does provide subsidized or free housing, it offers medical benefits and it pays more than the minimum wage of whichever country it belongs to. It has implemented a policy of retrieving old shoes and recycling them to create new shoes, saving base resources and staying green. The conference did have a downside in the idea of accepting a Tobin tax to create new roads and to help starving people. The agreement was of a Tobin tax about .05%. This tax seemingly small does equate to millions of dollars a year to help people across the globe.

In the end globalization promotes human welfare and rights, allows for economic growth of a country and promotes peace and cultural diffusion. Globalization provides opportunities that are not available before hand and so is a force that works to the benefit of the world. The arguments of Cultural Imperialism, Drained Resources, and labor Abuse are only the short-sightedness of those who do not grasp the entire concept of globalization. As the allusion in the beginning stated, every one gains what they want with free trade in the end.