[Marxism] Fw: [PEN-L] the free trade/protectionism debate - let's not dumb down

Jurriaan Bendien bendien at tomaatnet.nl
Wed Feb 25 20:48:27 MST 2004

In order for the argument that "American jobs are taken away by foreigners"
to be at all credible, it must first be proved:

(1) the same jobs producing the same output, which were previously performed
by Americans, are now being done by foreign workers offshore, in the same

(2) that Americans actually wanted to do those jobs, or were prepared to do

(3) that it would be practically feasible to do those jobs in the USA, under
the given conditions.

Undoubtedly this is the case for a portion of jobs lost to the USA. But for
many other jobs this is simply not true, because:

(1) If an employer closes down a plant in the USA, and opens up a new plant
overseas with a different production technique or a different output, then
it is silly nonsense to say "American jobs are taken away by foreigners",
and it ignores "who" is actually taking those jobs away, namely American
employers and American investors. After all, it is American investors and
employers who decide to hire workers in the USA or overseas; it is not as
though "greedy workers" offshore are "grabbing or stealing" employment
opportunities from American workers. They are in no position to do so, they
can only respond to employment opportunities which are actually being
offered where they are.

(2) many new so-called "outsourced" foreign jobs, performed by workers
offshore for American employers, do not represent the substitution of an
American job by a foreign job at all, but rather the creation of a new and
different job by an American employer offshore, reflecting an investment
decision that overall production costs are cheaper offshore. In other words,
in considering whether to hire new employees in the USA or offshore, the
employer decides for economic reasons to hire offshore. The managerial,
financial and marketing functions might be sited in the USA, whereas the
actual product is made overseas.

(3) Production outsourced by American employers to foreign countries very
often involves getting less foreign workers to produce a larger output than
was made previously within the USA, and so, it is not as though enormous
amounts of new jobs are being created in foreign countries as a result of
outsourcing anyway. If an American employer previously used 2,000 American
workers to produce an output worth $400 million and then uses 1,500 foreign
workers to produce an output worth $500 million, it's pretty silly to talk
about "foreign workers stealing American jobs".

The notion of "foreign workers stealing American jobs" is faulty because:

(1) while blaming the working class as per usual, it fails to explain
exactly how foreign workers could possibly "steal" American employment in
the first place,

(2) it conveniently ignores that the decision to reduce employment levels in
the USA, is made by American employers and investors, and not by American
workers, who are just looking for a job where they are, because they have no
other way to survive, and cannot easily move somewhere else.

(3) the same American people who argue "foreign workers stealing American
jobs", are quite happy to consume competitively priced products imported
from overseas, and in many cases could neither do otherwise, nor stay within
their budget, without purchasing foreign-made products.

Thus, in reality, the argument that "American jobs are taken away by
foreigners" is just imperialist jingoism, the logical endpoint of which is
that American workers, uniformed and in civvies, are send to Iraq at the
risk of dying, to grab oil resources to fuel American cars, even although
they could quite easily negotiate to get oil from other sources if required.

Taking 2002 data, the total dollar value of goods imported into the USA for
actual use within the USA (i.e. not re-exported) was about $1.1 trillion.
But only about 40% of that total dollar value of imported goods used in the
USA consisted of ordinary consumer goods used by households, and of all
consumer goods and services imported, at least 10-15% consisted purely of
luxury consumption goods, i.e. things like jewellery, trinkets, antiques,
numismatic coins, works of art, gold, luxury cars, luxury clothing, luxury
furnishings, pleasurecraft, luxury cars, personal aircraft and so on. Then
you must conclude that out of the total dollar value of all goods imported
into the USA, only a third refers to ordinary consumer durable and
perishable goods, representing 10% of the value of all consumer goods bought
by Americans each year. Out of the total dollar value of all goods and
services imported into the USA, only a quarter consists of ordinary consumer
durables and perishables.

If you are not lazy, and you are prepared to do some research into real
American working-class consumer expenditure, then you would conclude, that
foreign goods and services they buy, comprise only a very small portion of
their wages, and the only "big ticket" foreign durables in their budget, are
foreign-made cars and foreign-made personal computers. (If you actually look
at total American personal consumer expenditure, only 12% is actually
expenditure on durable goods anyway). American workers produce new cars and
trucks worth $377.5 billion, $80 billion of these American-made vehicles are
exported, and new cars and trucks worth $133 billion are imported. So the
stock of new cars and trucks appearing on the US domestic market is nowadays
worth about $390 billion or so. On the other side of the story, only about a
fifth of the total annual payroll in the USA of about $1.2 trillion) is paid
out to American working-class people producing new tangible goods. Just
under a third of those goods are not consumed in the USA, but exported, yet
those exported goods represent two-thirds of the total value of all exports
as conventionally defined.

This is just to say that the "free trade versus protectionism" debate is
really irrelevant from the point of view of the American working class, and
if any thing, they benefit from free trade.


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