Liberty Pen: Milton Friedman: 'Free Trade Vs Protectionism'

Source:Liberty Pen- Chicago economics Professor Milton Friedman, giving a lecture on free trade.

"Professor Friedman clarifies the motives of protectionism and explains why free trade policies benefit the masses. (1978) Apologies for poor video quality at times. Liberty Pen."

From Liberty Pen

As huge as the United States is a country of roughly 320M people that basically the size of a continent, that stretches from one ocean to another, we still represent around 5% of the entire world. With two countries that have at least four times as many people as we do. And for our economy to do as well as possible, we need to be able to produce as many products as we can as possible, so we can sell them to as many people as possible. Not just in America, but the rest of North America, Latin America, Europe, Arabia, Asia, etc, to as many people as possible that can afford to buy our products and in exchange other countries that allow us to sell our products in their countries. 

The whole point of free trade is for one country to be able to sell their products in other countries. And in exchange other countries would be able to sell their products in your country with both sides paying low tariffs.

And we get to see what the rest of the world is producing and what they do better than us and not as well as us and develop competition out of it. That's why it's called free trade, an exchange of products and ideas between these countries. That gives us and them and idea what they are up against, what they do well and what they need to do a better job of.

I don't know what's good about protectionism, but world trade (as I prefer to call it) is an exchange of free ideas, and products and when it's done right might be the only true free market in the world, because the people in each of these countries gets to decide who makes the best products.

One thing that comes from world trade is that jobs get cut and moved oversees and as a result well qualified Americans are left unemployed. Because their jobs no longer exist, or have been moved to another country, which is why we need to finance retraining for these workers so at the very least they can find new jobs in other fields that they would be qualified to do, to make world trade as effective as possible. 

Foreign trade like any deal is give and take and comes with pluses and minuses. The trick is to run up the pluses and make the deals as good as possible for yourself and limit the minuses. Limit the damage of the minuses and when it comes to trade, you know jobs will be lost, because now your companies will be free to do business in other countries. Which is why you need trade assistance for employees that lose their jobs as a result of trade. That includes something in the effect of a severance package, retraining and help if needed finding another job.