The Choice of Fable of Free Trade and Protectionism Essay Sample
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The Choice of Fable of Free Trade and Protectionism Essay Sample
The Book, “The Choice: A Fable of Free Trade and Protectionism” by Russell Roberts, according to a book review of the same literature is more than just a book. The review likewise stated that a book becomes more than just a book when the idea presented within it is so powerful that it “threatens to transform the world” (“The Choice: A Fable of Free Trade and Protectionism (Book Review)”). With all the relevant discussions presented by Russell Roberts, there is this great possibility that it would influence majority of the people as regards the concept of Free Trade and Protectionism.
First, it may be important to define what free trade and protectionism are. Free trade, as we all know pertains to economic trade where the flow of goods and services are rather unrestricted. On the other hand, protectionism is characterized by the more evident restrictions on trade between nations. The Merriam Webster Dictionary defines the term protectionism as “an advocate of government economic protection for domestic producers through restrictions on foreign competitors”.
With the above concepts of free trade and protectionism, Russell Roberts, throught eh comparative theory of David Ricardo explains balances the advantages and disadvantages of the two economic concepts and decides which of these two can best sustain the economy of the United States in the future.
According to Goma (149), this book by Russell Roberts “presents a fictitious dialogue with the late David Ricardo, who explains his theory of comparative advantage”. In his theory, David Ricardo presents two choices for the future of the United States’ economy under the principle of comparative advantage comparing the concept of protectionist policies and free trade (“Lori’s War” 28). He compares how free trade can save the American economy as much as protectionism may not be able to give. In this book, Roberts presents the case of how protectionism has helped to develop among people the concept of resistance to change and how it eventually caused the decline of the economy. For many, free trade is linked to globalization, while protectionism the opposite. Protectionism, while it ensures the welfare of the employee by securing jobs for them through resistance to foreign products; it nevertheless, causes more long term negative impacts on the economy. In pushing this view, Roberts presents David Ricardo and how he evaluates resistance to change as the culprit that puts the Americans on to a “dangerous path” (“The Choice: A Fable of Free Trade and Protectionism (Book Review)”).
One of the main points that Roberts presented is that according to him, “trade does not affect the number of jobs, instead it affects the types of jobs people work” (“The Choice: A Fable of Free Trade and Protectionism (Book Review)”). Under this view, it is believed that although protectionism secures the number of jobs for the people, it nevertheless restrains the types of jobs where they can work. Resistance to change, as have been mentioned, is the main premise of the story (“The Choice: A Fable of Free Trade and Protectionism (Book Review)”). Further, it is also said that “free trade does not create jobs-it creates income by reallocating or transferring jobs form the lower-productivity tot eh higher-productivity sectors of the economy” (Krauss 5). This is what Russell Roberts is trying to say. Free trade, as compared to protectionism, does not create jobs, but it transform jobs in to more productive jobs where the employees can gain more, hence creating more income, of which will redound to positive benefits for the overall economy. When free trade allows international cooperation and foreign investments, it becomes possible that there are not only more jobs, but there are more rewarding jobs for the people. The increased competition results to more progressive industries and economies.
Roberts (16) also said that “a nation’s laws and institutions must also give people the proper incentive to work hard”. This only means that economic policies should not only give people the jobs that they need but also should present them with jobs where they can excel and develop so that they can be more productive and where they can earn more. This is the essence of free trade because although it may cause to the loss of some jobs, creativity, as a result of it, also tend to develop and create more meaningful jobs, giving more meaningful incentives.
In effect, Roberts believes that free trade is the answer to progress and economic development as globalization is now the growing trend. Protectionism, though favorable at times, it is free trade that made nations rich and richer.
In this book, Russell Roberts also discussed the issue of outsourcing, tariffs, trade deficits and the impact of globalization to the poor people (“The Choice: A Fable of Free Trade and Protectionism (Book Review)”).
Finally, quoting from “The Choice: A Fable of Free Trade and Protectionism (Book Review)”, the book by Russell Roberts is an important literature that provides meaningful and powerful examples that exemplify the benefits of trade. Further, it is also stated that “a clearer understanding is important today as free societies are faced with the choice between allowing people to make mutually beneficial transactions or protecting the incomes of a few at the expense of many” (“The Choice: A Fable of Free Trade and Protectionism (Book Review)”). In a complex business and economic environment, it is important to consider the views presented by Russell Roberts especially as regards the importance of free trade, and how, protectionism, though also beneficial at some point, could also restrain progress. Change is the meaning of growth. There can be no growth is there is no change. Thus, free trade, as much as it allows change, also allows opportunities for nations and people to grow richer as a whole and not only for a selected few or a defined sector.
As what Roberts believed, I would also choose Free Trade because as with the present time, trade agreements, especially those that the United States had entered into with other nations, it has been proven that the agreements have provided meaningful economic growth for both parties thereby providing better opportunities and better economic conditions for their people. With free trade, there are unlimited opportunities for everyone unlike in protectionism wherein only the benefit of a chosen few is secured and not even at a level that can be said to be at the peak of possibilities. As it is provided by Bhagwati, “trade protection hurts the economy of the country that imposes it”. It is however important to remember that protectionism has its own benefits and applications only that in the present time, with globalization, free trade seems to be more advantageous for the economy.
Bhagwati, Jagdish. “Protectionism.” 1988. 27 May 2008 <http://www.econlib.org/library/Enc/Protectionism.html>.
Goma, Ophelia D. “Creative Writing in Economics.” College Teaching 49.4 (2001): 149+. Questia. 26 May 2008 <http://www.questia.com/PM.qst?a=o&d=5000945463>.
Krauss, Melvyn. How Nations Grow Rich: The Case for Free Trade. New York: Oxford University Press, 1997. Questia. 26 May 2008 <http://www.questia.com/PM.qst?a=o&d=59787202>.
“Lori’s War.” Foreign Policy Spring 2000: 28. Questia. 26 May 2008 <http://www.questia.com/PM.qst?a=o&d=5001208948>.
Roberts, Russell. The Choice: A Fable of Free Trade and Protectionism. U.S.A.: Prentice Hall, 2006.
‘The Choice: A Fable of Free Trade and Protectionism (Book Review).” 2008. 27 May 2008 <http://www.onfinancialsuccess.com/articles/the-choice-a-fable-of-free-trade-and-protectionism-book-review/>.