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Pros and Cons of Free Trade

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Pros and Cons of Free Trade essay
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Free trade and free trade with other nations allow businesses and markets to reach as many customers as possible, thus boosting sales, revenue, and potentially corporate profit. When sales are up it can lead to companies hiring which leads to lower unemployment which is good for the economy. Rising sales leads to large scale production. Large scale production is generally more efficient than small scale production, which lead to greater corporate profits, which can be reinvested in the economy when the corporations spend their money to advance their companies.

Free trade with other nations can also improve relationships with other nations. For example if another nation becomes prosperous because of its trade with the US, they will want to be friendly with the US.

Over an extended period of time, free trade can create big businesses that make it difficult to impossible for small businesses to fairly compete. Without the small business competition, the large corporations realize that can spike up their prices to boost corporate profits because consumers do not have an alternative option. This leads to a culture of corporate greed that hurts consumers and the economy, and the average working person gets ripped off. Also without small business competition there are fewer companies that work in the industry which leads to lower employment which hurts the economy. Which means if you are not working for the big corporation you are getting laid off as well as ripped off (this is where the famous saying “the rich get richer and the poor get poorer” came from), and if you are working for the big company, your wages will go flat or down instead of up because the big company executives know that once they eliminate the competition their workers have nowhere else to go if they are not satisfied with their wages compensation. When there is lots of competition workers can quit their job and work for the competition if they are not happy with their wages compensation. Because of this, I do not believe the benefits of free trade outweigh the drawbacks, and that Keynes theories of government involvement are needed at least to some degree.

The Boeing Company is an example of a business in my area that has downsized its work force due to outsourced operations, and there are no similar companies in the region. The competition may be on the other side of the globe. In my area it is common knowledge the Boeing hires and fires by the thousands at a whim any given year.

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