Free trade is a controversial subject. Many people in this day of age believe that free trade can't survive in the current world as it is now "flat". The average citizen is worried that American companies will begin to outsource and offshore so much, that eventually there will be no more jobs for us Americans. However, this "theory" is silly and false.Friedman showed us fairly simple calculations on how no matter how many unskilled or skilled workers there are, there will always be jobs available. People do not need to worry about Indians or the Chinese taking our jobs. There will always be jobs in America. I agree with him 100%.
QUOTE #1
There were two really good quotes I liked from this chapter. The first one was, "If you believe human wants and needs are indefinite, then there are infinite industries to be crated, infinite businesses to be started, and infinite jobs to be done, and the only limiting factor is human imagination. The world is flattenning and rising at the same time." This quote is from the cofounder of Netscape, Marc Andreessen. The company started in 1994 under his guidance.
I like this quote because it shows that free trade promotes creativity and innovation, which is exactly what the world needs now. New inventions and ideas create new industries which in return: create new jobs! This is why FREE TRADE IS A GOOD THING.
QUOTE #2
"The Indians and Chinese are not racing us to the bottom. They are racing us to the top-and that is a good thing."
This was interesting as I had to put the book down to think about this: How is this a good thing? Then I realized, this will diversify the product markets that are available and niches for specialization will be created as well. Friendly competition will onlly push us be even more innovate so we will be able to compete.
2 comments:
I am actually going to agree with Friedman on this one, I know I know, weird. But free-trade is not going to take away all the jobs for Americans. Yes some jobs will be outsourced or offshored, but that will also create more jobs. David Ricardo's free-trade theory of comparative advantage made complete sense. Each nation that specializes in a product trades with another country that specilizes in something to get a comparative advantage in trade. Income levels will rise, jobs will increase as demand does. This concept is used in supply chain or manufacturing, why not globalization.
One thing people tend to forget is insourcing. We are not the only country outsourcing. Jobs are lost in great numbers but many are created as well. No one ever seems to talk about the jobs that are created here because of foreign companies outsourcing to the U.S. I know this is not the majority but I think more jobs will be created as the world becomes flat.
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