Free trade, like illegal immigration, is a topic that few candidates would be talking about if not for Donald Trump (and Bernie Sanders to a lesser degree).
Americans have gotten on board with the views that America is losing too much on its so-called “free trade” deals, and Hillary Clinton has started inching over to Trump’s and Sanders’ positions on the topic as well.
It is certainly a populist stance for a country where wages are down and full-time employment is harder to come by, but according to one highly respected educator, the rhetoric from these three candidates, in particular, gives reason to fear what might happen if they step into the role of President of the United States.
Richard Epstein, renowned professor at the University of Chicago and New York University, and a representative of the Stanford University policy think tank, The Hoover Institution, picked apart Trump’s, Clinton’s, and Sanders’ free trade positions on a recent episode of his podcast, The Libertarian, and it doesn’t look good if one of these three ends up being elected.
Epstein responded to two comments, in particular — one from Sanders and one from Trump. Here’s what the two candidates have to say about free trade.
Sanders says the U.S. is in “a race to the bottom where our wages are going down,” noting that while not all of it is attributed to free trade, “a lot of it” is.
“I do not want American workers to compete against people in Vietnam, who make 56 cents an hour for a minimum wage,” Sanders said.
“Someone like Bernie Sanders is always an alarmist,” Epstein said. “If he understood the way the system worked, he would not make these kinds of claims.”
And just how does the system work, professor?
“What… happens is that the people doing work for 56 cents an hour overseas are not doing the type of work that can necessarily take part here in the United States. Domestically you would get no one else to do the work that could be done overseas.”
Epstein remarked that wages in the U.S. manufacturing scene are artificially high due to unions and that these wages “are not sustainable in the face of competition.”
“By keeping those wages so high, it turns out to be disruptive” when another country is able to come in and undercut. But this is actually a good thing, he argues, because “it allows the economy to point out to countries where their modes of production are inefficient.”
“What happens is [countries] have to fix things up domestically in order to compete with the competition overseas. If you shoot the messenger by making free trade impossible, what you do is strengthen the monopoly interest that you have at home and you reduce the likelihood of corrective action starting to take place.”
The Libertarian host then asked Epstein to weigh in on this Donald Trump free trade comment.
“I don’t mind trade wars when we are losing $58 billion a year to Mexico. With China, where losing $500 billion a year.”
The line is one that has worked for Trump, taking him through much of the primary season without wavering as the GOP frontrunner. But, Epstein notes, it leaves out one huge detail about Trump’s position of imposing tariffs and aggressive anti-free trade actions.
“What you also have to understand is that if his argument is correct, then any country that has a trade deficit with the United States is going to be able to use exactly the same kind of anti-free trade rhetoric that Donald Trump uses,” Epstein said.
He referred to it as an “egotistical” way of approaching free trade and one that would be “ruinous” to the world economy, something that would impact both the U.S. and other countries in a grave way.
“If you start taking that kind of egotistical attitude to the international level, you are going to create a true disaster,” he said, adding that it would lead to trade wars, such as the kind that ushered in the Great Depression.
“Total levels of international trade went down by one-third or one-half [during the Depression],” he said, reminding listeners that the damaging tariff was put in place in 1930″ and that “the rise of Hitler took place in 1933.”
“Trade brings with it peace; trade wars lead to wars of the other kind in which you start firing real ammunition.”
With Clinton skewing more closely toward Sanders’ positions, it is apparent in Epstein’s eyes that any of the three would be bad for free trade and, in his words, potentially “ruinous” for the world.
But what do you think, readers?
Is Epstein right about the three leading candidates, and if so, what should America do come November?
[Image via Flickr Creative Commons/DonkeyHotey]