Free trade lowers prices -- but not on things poor people need (and it pushes up housing prices)


#1

Originally published at: http://boingboing.net/2016/09/21/free-trade-lowers-prices-bu.html


#2

Perhaps if free trade agreements were not made in secret we’d see how the agreements are made to benefit the rich in the first place.

Trade secrets should be kept secret but the what is being negotiated and who the winners and losers are should not be. The public has a right to know. If the “poor people” knew they were getting screwed in the first place perhaps they just might have a political means to have their concerns heard and acted upon. Some would argue that deals would never get ratified that way but, hey, it should be the cost of doing business.


#3

Trade in food & houses is much more encumbered than pretty much every other good.

There are good reasons (and some bad) why trade in food is much less free than other goods: local sufficiency, protection of ecosystems, protection of quality, et cetera. But those encumbrances do increase prices, sometimes significantly.

And of course, we can’t have global trade in housing. But that is also a highly encumbered good: zoning laws, NIMBYism, treating housing as an investment, vote buying, et cetera. The reasons for these encumbrances are much less defensible, but they’re going to have to be defeated at a state, not global, level.

Just recognize that this study is going to be used by free traders to argue that “hey look, free trade lowered the prices of everything else. If we actually had free trade in food & houses, those prices would be lowered too.”


#4

Indeed.


#5

Wow, this is blindingly obvious once somebody points it out. It never occurred to me.


#6

Yeah, talk to me about the benefits of free trade’s lower prices for stuff like patio furniture when I can buy health insurance, housing, childcare, and a college education at Walmart. Until then, I’d rather have job security and decent pay.


#7

Moment of sadness for the graphic on the post being a super-cheaty-scaled chart.


#8

I think Vancouver, BC would beg to differ with that assertion.


#9

Interesting chart. So food prices went up faster than other stuff. Seems to me that may be at least partially attributable to the drought.


#10

Sure. But it’s also probably more attributable to the commodization of food more generally, and the use of some foods (corn, for example) for other, non-food uses. And the also partial attributable to the general upward trend of gas prices and how that impacts the cost of transporting food around the country/world. And also to a number of other things.

The point is, I think, that the cost of basic goods rising faster than luxury goods is just another way that the poor bear the brunt of changes to the economy and how they more often lose out in the process of globalization.


#11

Calling a deal a “Free trade deal” does not mean it is based on real free trade, so too calling the revocation of civil liberties a “Patriot Act” or an unjust war “Operation Freedom” should not reflect poorly on either patriotism or freedom.

The nominal meaning of the deal has little to do with the real effect of the deal, just as the stated intent of politicians usually has little to do with the actual effects of their actions.

Before blaming free trade for increasing food prices, make sure you have differentiated between nominal free trade and the real free trade.

150 years ago in England, Richard Cobden made this argument better than I ever could. You can’t increase the amount of corn by reducing the supply of corn.


#12

In what way is the supply of housing in Vancouver free? Can I go build whenever, whatever I want there?

Prices have spiked there and everywhere because there are very few restrictions on buying yet tons of restrictions on building.


#13

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