Pro and Cons of "Free Trade Doesn't Work"

TITLE: Free Trade Doesn’t Work: What Should Replace it and Why

AUTHOR: Ian Fletcher
GENRE: Nonfiction
TOPIC: Globalization/Economics/Political Science
PUBLISHER: U.S. Business & Industry Council
ISBN-13: 978-0578048208
WEBSITE: www.freetradedoesntwork.com
FORMAT: Paperback, 348 pages, $24.95 on Amazon.com


Reviewed by Simon Lester for International Economic Law and Policy Blog

“Free Trade Doesn’t Work”
That’s the title of a new book by Ian Fletcher. (I came across it as a sponsored link in a Google search.) There are a number of different reasons people criticize free trade, so I was curious to see what exactly he had in mind. I asked him for a copy of the book so that I could review it on the blog, and he was kind enough to send one.

(Spoiler alert: If you don’t feel like reading to the end to see what he is proposing, it’s for the U.S. to impose an import tax, of about 30%, on all foreign goods and services).

As a preliminary point, let me just note that the book is mainly about tariffs and quotas. There’s not much about IP, labor rights, investor-state and similar recent additions to trade agreements. (Although, as indicated in the spoiler, services, another recent addition, is covered).

Now to the substance. The first four chapters contain a number of critiques of arguments and policies the author doesn’t like (including bad arguments for and against free trade). I’m going to start with Chapter 5, which deals with comparative advantage. Given the nature of the book (i.e., one that is critical of free trade), I was pleasantly surprised that he did a pretty good job of setting out this concept and explaining why it serves as an important basis for the free trade view. He acknowledges its value, and criticizes those who dismiss it out of hand. (In fact, this part was so good it could be used in a pro-free trade book!) However, he then identifies a number of “flaws” with comparative advantage. I’m just going to deal with one of these. (Otherwise this post would become far too long -- it’s already quite long as it is.)

To illustrate what he considers to be one flaw in the theory of comparative advantage, he asks, “What if a nation’s exports are unsustainable?” For example, a country may be exporting non-renewable natural resources, if this is where its comparative advantage lies. This will, he contends, maximize short-run efficiency at the expense of long-term prosperity. To deal with this problem, he notes, you would have to tax or restrict such exports, which is “not free trade.”

I hear this issue raised now and then in various contexts. However, I’m not convinced there is much to it. It is certainly true that, in most cases, you would not want to use up all your natural resources. But I don’t think the theory of comparative advantage requires you to do so. Even for free traders, comparative advantage is not the only basis for policy making. A country might have a comparative advantage in slaves, but it wouldn’t engage in slavery because we believe slavery is wrong. Similarly, if you have a comparative advantage in a particular natural resource, you don’t have to extract/produce it. If you want to deal with the threat of using up your resources, and you want to do it in a way that is consistent with “free trade,” just restrict their production, not their export. Doing it this way is likely to be permissible under trade rules. (There are some arguments you could make that production quotas violate trade rules, but my sense is most people don’t find these arguments very convincing). So, I’m not sure I see how the issue of non-renewable natural resources is a flaw in the theory of comparative advantage. It’s just a policy issue to be dealt with outside the context of trade.

Going further with comparative advantage, we now get a foreshadowing of the core idea of the book. He says that a nation’s wages are determined by its productivity in sectors where it has a comparative advantage. What he means by this, in essence, is that you would rather have a comparative advantage in high-wage industries. So, for example, it is better to have your comparative advantage in making airplanes than in cutting hair.

At this point, he takes us through a bit of free trade history. He explains that the British only became free traders after they used protection to establish themselves as the leading producers in industries such as wool-making. Similarly, the U.S. and Japan also used protection to develop their industries.

I don’t disagree with his contention that these three countries, and also other developed countries, were quite protectionist during their development period. I do, however, question whether this protection was the cause of their development. Speaking very generally, it seems to me that all countries have been fairly protectionist, at various times and in various industries. However, not all have developed. As a result, I’m not sure it’s sufficient to identify a correlation between protection and development in some countries and claim that this demonstrates cause and effect. To his credit, he does have an explanation of why protection worked better in East Asia than in Latin America, an issue which I’ve seen some critics of free trade overlook. (P. 202) However, one of his points here was that perhaps Latin America did not emphasize education enough, which, if true, suggests to me that education may be more important for development than protection.

In addition, I’m not sure that a comparison across eras has much value. It is true that the U.S. protected its domestic industries from their British competitors. But today, it might make more sense to offer your country up to a foreign company as a place to invest, instead of protecting domestic competitors. Why spend years with inefficient domestic industries when you could have a foreigner come over and build a state of the art factory tomorrow? That wasn’t an option for the U.S. in the 19th century, but it is for developing countries now.

Next up, in Chapter 8, he bashes the WTO, NAFTA and other trade agreements. This part seems to reflect criticisms of people like Lori Wallach and Dani Rodrik. Most readers are probably familiar with these arguments, so I’m going to skip them.

In Chapter 11, we get back to his key point, which is that it is better to have a comparative advantage in some industries than in others. He says you want industries with “increasing returns” (for a given increase in inputs, returns go up by more than the increase). And how do we achieve that? He proposes a “natural strategic tariff.” As an example of this, he suggests “a flat tax on all imported goods and services” as the best approach. He mentions a figure of 30%.

What he likes about this approach is that industries differ in “sensitivity and response to import competition.” Thus, a 30% tariff would not be enough to cause apparel production to come back to the U.S., as our competitiveness in such industries is far behind that of other countries. However, it would be enough to cause high-tech products like semiconductors to come back (as we are much closer there), which is great because these are the kind of increasing return, high-wage industries we want.

All right, that’s the crux of his argument. Now for some of my responses.

First off, let’s just ignore the WTO, NAFTA, etc. violations inherent in his proposal. He’s not interested in that part. Let’s just talk policy.

I’m going to start with a positive. There is one thing I like about his proposal: Because it is a flat rate for all goods/services, it removes the discretion a government has to give higher tariffs to some industries (often based on the effectiveness of their lobbying). I’ve always seen this as a huge flaw in the current system (and I very much like Chile’s one tariff rate approach).

But aside from that, not surprisingly, I have some concerns. I’m not going to go through them all, though, but rather just pick out some favorites I want to talk about. (Readers should feel free to add other thoughts in the comments).

One big concern I have is on competition within specific protected industries. Won’t taxing foreign competition at such a high rate turn many industries into domestic oligopolies? On p. 244, he suggests that domestic companies actually compete more intensely against each other than against foreigners. I’m pretty skeptical of this point. Unfortunately, it may be difficult to prove one way or the other empirically. But logically, it makes no sense to me. How is fewer competitors better? Imagine if there were no cars made by foreign-owned producers sold in the U.S. Wouldn’t U.S. consumers be considerably worse off if the U.S. auto makers had been competing only against each other all these years? Is there any doubt we’d be seeing more expensive, lower-quality cars?

A second big concern is the foreign response, which I think he vastly underestimates. He goes through some possible responses foreign governments might have -- such as subsidies, currency devaluation, and retaliatory tariffs -- if the U.S. were to adopt such a tariff but dismisses them pretty quickly. For example, with tariffs, he notes that foreign countries would probably raise their tariffs “somewhat,” but the process would not “get out of control.” Indeed, he suggests it might even cause them to lower some of their own barriers, if, after the strategic tariff is imposed, lower U.S. tariffs are subsequently offered as an incentive for them to lower their barriers. (P. 246)

In reaction to this, let me point out first that it’s hard to predict how our trading partners would respond to such a policy. It is extremely unlikely it would ever be adopted, so not many people have given a response serious consideration. But I’ll give it a shot anyway.

I know it is commonly said (and the author implies at various times) that most other countries are more protectionist than the U.S. (and thus in part this “natural strategic tariff” would just counterbalance foreign protectionism). But regardless of who is most protectionist, there is a good deal of support for relatively free trade in much of the developed world. As a result, I don’t think the response would be anything like he hopes. If I had to guess here, I think much of the rest of the world would band together in a free trade agreement of their own, and let us go our own way. More specifically, it seems to me that a possible response by the rest of the world (and especially the EU, Japan and other developed countries) would contain two elements:

-- impose an identical 30% tariff on all U.S. goods and services.

-- form a free trade agreement amongst themselves.

Now, in the 1950s or 1960s, his argument about the foreign response might have been more plausible. But today, the U.S. market, while very important, may not command the same power it once did. There are a lot of other markets in which to sell, and many foreign companies might be happy to have U.S. companies at such a disadvantage in their own markets.

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The New Book Review is blogged by Carolyn Howard-Johnson, author of the multi award-winning HowToDoItFrugally series of books for writers. It is a free service offered to those who want to encourage the reading of books they love. That includes authors who want to share their favorite reviews, reviewers who'd like to see their reviews get more exposure, and readers who want to shout out praise of books they've loved. Please see submission guidelines on the left of this page. Reviews and essays are indexed by author names, reviewer names, and review sites. Writers will find the index handy for gleaning the names of small publishers. Find other writer-related blogs at Sharing with Writers and The Frugal, Smart and Tuned-In Editor.
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TITLE: Writings Of A Wretch
AUTHOR: Marko Vignjević
PUBLISHER: Black Leaf Publishing
COPYRIGHT: 2009 by the Black Leaf Publishing Group, June 8, 2009
FORMAT: Paperback
PRICE: $11.95 (US), £7.99 (UK)
PAGES: 134
ISBN-10: 0955990335
ISBN-13:9780955990335


Reviewed by Deb Hockenberry for Debs Book Reviews


Like many before me, I’ve always asked myself: What is life? I will tell you the answer to which I came: Life is the happiness of others. Once I was a different point of view. That was a time when I, truly, without any exaggeration, showed a lot of promise. I even graduated from University; I have a diploma – if you don’t believe me visit the Kalenich market and ask around, I have a booth there where I sell telephone cords, extension cords, light bulbs manufactured in the Tesla factory in Panchevo, electrical outlets and all other kinds of nonsense to which I gave no thought during my studies, after which I immediately applied to the unemployment office, like a sheep for shearing. ~ from Writings Of A Wretch by Marko Vignjević, page 6, paragraph 2.

Imagine…you’ve been to University but your job is selling at the Kalenich market. It’s a meager living but an honest one. Does the wretch see that? Not really. He’s very dissatisfied with his life. He sees his life as one failure after another.

Translated into English from the original Serbian, Writings Of A Wretch is an uniquely original book completely written in first person and takes us into the innermost thoughts of the wretch’s daily life. This is a very well written book and one that makes you think about your own situation.

As you read this book, you see the wretch make his daily trudge to the market to sell his wares. Little does he know, he really has an important job. Everyone in Belgrade shops at the market. Where else can they get their electrical supplies? Slowly, he begins to lift himself out of his depression and accept his life for what it is. He even raises his self esteem enough to ask a girl to go to the movies with him! But his self esteem fails him and he ruins the date. Throughout the book the wretch asks himself very philosophical questions including the most important: What is my purpose in life?


As you continue reading, you find it hard to put this book down and go through several emotions. At times you want to yell at the wretch to consider himself lucky that he has food in his stomach and a roof over his head. Then you feel frustration that the wretch feels his whole life is a failure and he’ll never do anything right. You’re relieved when, finally, he realizes that his life isn’t so bad at all. Finally, you will feel like cheering when, at last, he accepts his life and learns to be happy in it.

~Deborah Hockenberry is an independent reviewer who invites reviews for selected genres at Debs Book Reviews. Reach her at kidztales@verizon.net and http://thebumpyroadtopublishing.blogspot.com

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The New Book Review is blogged by Carolyn Howard-Johnson, author of the multi award-winning HowToDoItFrugally series of books for writers. It is a free service offered to those who want to encourage the reading of books they love. That includes authors who want to share their favorite reviews, reviewers who'd like to see their reviews get more exposure, and readers who want to shout out praise of books they've loved. Please see submission guidelines on the left of this page. Reviews and essays are indexed by author names, reviewer names, and review sites. Writers will find the index handy for gleaning the names of small publishers. Find other writer-related blogs at Sharing with Writers and The Frugal, Smart and Tuned-In Editor.
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Overcoming Destructive Dark Secrets

The Eby Way: Challenge, Release, Heal your Painful Past
by Gary Eby
ISBN-10 1-58501-122-3
ISBN-13 978-1-58-501122-3
Paperback 209 pages
Genre: Self-Help
Published: December 2009
SterlingHouse Publisher


Gary Eby provides a synopsis of why his self-help method works.

I am the author of The Eby Way. I have a Masters in Social Work, 40 years of professional experience, and am retired from the VA as a social worker.

The Eby Way, is a self-help guide to overcoming past dark secrets so we can achieve our goals today. You can also learn four simple steps to a more positive life.

Year after year books are published promising happiness, joy, prosperity, love, and health. They just don’t tell us how to do it.

Oh, yes, they tell us to think positive or forget about the past. They offer us chants and “powers” and even “secrets”.

Here’s the real secret…as long as your heart or mind or body remembers that negative incident from how ever long ago, your ability to change will not be at hand.

Unlike these other books, I will show you how to stop the negative so you can truly gather the positive.

You can use my emotional healing process to overcome any negative issue or barrier in your life. It is fully field tested to facilitate change on all levels.

Please watch The Eby Way video here and check out some free samples of my work: http://www.ipodiums.com/qlcoach

Here is what Wheelman Presssaid about my book: "After working in the social work field for 37 years, author Gary Eby developed a simple formula to help anyone overcome a negative past and to embrace a positive lifestyle. In his book, Eby proves the effectiveness of his technique by providing examples of his own experiences as well as the stories of some of the people he has counseled."

An interesting story behind the publishing of The Eby Way is also available here: http://www.squidoo.com/ebywaybook
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The New Book Review is blogged by Carolyn Howard-Johnson, author of the multi award-winning HowToDoItFrugally series of books for writers. It is a free service offered to those who want to encourage the reading of books they love. That includes authors who want to share their favorite reviews, reviewers who'd like to see their reviews get more exposure, and readers who want to shout out praise of books they've loved. Please see submission guidelines on the left of this page. Reviews and essays are indexed by author names, reviewer names, and review sites. Writers will find the index handy for gleaning the names of small publishers. Find other writer-related blogs at Sharing with Writers and The Frugal, Smart and Tuned-In Editor.
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Fiction for Those Who Love Flying

Title: Hauling Checks
Author: Alex Stone
Genre: Fiction\ Humorous, Transportation\ Aviation
ISBN: 978-1449563332
Reviewer: Chris Gerrib
Reviewer's Blog: http://podpeep.blogspot.com
Reviewer's Rating: 8/10



Review by Chris Gerrib for PodPeep

It’s a little-known fact, but for many years, every check written at a bank had to be physically air-freighted back to the original bank it was drawn on. Modern technology is slowly phasing this out, but in the meantime, a group of airfreight companies make a living flying this “work” around. These pilots refer to themselves as freight dogs. It’s a tough business, consisting of flying small turboprops out of secondary airports at night for little money.

It’s the world of Alex Stone, author of the new novel Hauling Checks. This short work (166 pages) is ostensibly the story of Checkflight, a (hopefully) fictional airfreight company swirling down the corporate drain. In reality, the book is an excuse for Alex to tell fictionalized exploits and anecdotes of his flying career. Very entertaining anecdotes, I might add.

Alex is an engaging writer, aiming at a general audience, so there’s no “I did a second IFR on the PDQ” technobabble. What aviation lingo you need to understand is explained. Even then, most of the entertaining stories aren’t about flying; they are about characters, from a copilot who’s afraid to fly to a company chief who dabbles in illegal activities and a senile dispatcher.

Now, the author is a young man, apparently single, and he hangs out with a young crowd, so there are a few adult words and situations. Having said that, Hauling Checks is an entertaining and quick look at a less-than-glamorous side of being a pilot. I’m very fond of Patrick Smith, who writes “Ask The Pilot” for Salon.com. Alex Stone shows the writing potential to be another Patrick Smith.
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The New Book Review is blogged by Carolyn Howard-Johnson, author of the multi award-winning HowToDoItFrugally series of books for writers. It is a free service offered to those who want to encourage the reading of books they love. That includes authors who want to share their favorite reviews, reviewers who'd like to see their reviews get more exposure, and readers who want to shout out praise of books they've loved. Please see submission guidelines on the left of this page. Reviews and essays are indexed by author names, reviewer names, and review sites. Writers will find the index handy for gleaning the names of small publishers. Find other writer-related blogs at Sharing with Writers and The Frugal, Smart and Tuned-In Editor.
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Title: Living the Dream
Author: Tim Baker
Genre: Fiction/Action/Crime
ISBN: 978-160844-087-0

Reviewed by April M. Hanson for Amazon.com


Well-written and gripping novel

All Kurt wants is a break and he can't understand why he can't get one. Deciding to take matters into his own hands he comes up with a plan to kidnap Vicky. He is sure her husband will pay the ransom and then his life will be on the right track, he will be a loser no more. Unfortunately for Kurt, things go from bad to worse as he drives to Florida in what becomes the road trip from hell. Once there, he discovers Vicky is out of town and her husband, Jimmy, doesn't care enough about her to pay a ransom even if Kurt could managed to kidnap her. Just when it seems like Kurt's plan is over, he meets Jimmy's mistress, Leslie, who has some plans of her own and Kurt starts to believe he may finally get to "live the dream".

When I first started to read Living The Dream by Tim Baker, I wasn't sure if I was going to like it. Three of the main characters have no redeeming qualities and it was hard to care about what happened to them. Then I realized that I didn't have to like them in order to appreciate the story and the imagination that went into the writing. The things that kept happening to Kurt were crazy and creative and I was impressed with how events unfolded in a way that kept me interested despite my lack of empathy for the characters. I eventually found myself turning the pages furiously to see what was going to happen next and, by the end, felt that the book was well written, creative, showed lots of imagination and I would definitely recommend it.
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The New Book Review is blogged by Carolyn Howard-Johnson, author of the multi award-winning HowToDoItFrugally series of books for writers. It is a free service offered to those who want to encourage the reading of books they love. That includes authors who want to share their favorite reviews, reviewers who'd like to see their reviews get more exposure, and readers who want to shout out praise of books they've loved. Please see submission guidelines on the left of this page. Reviews and essays are indexed by author names, reviewer names, and review sites. Writers will find the index handy for gleaning the names of small publishers. Find other writer-related blogs at Sharing with Writers and The Frugal, Smart and Tuned-In Editor.
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New Mainstream Novel Also a Bit of a Mystery

Title: Marta's Place
Author: C. M. Albrecht
Publisher: Lyrical Press
Genre: Contemporary Fiction

Reviewed by Anne K. Edwards for Mystery Fiction


If you've ever been out of work and send on interviews for menial jobs, you will both sympathize with Hal and understand his letting life happen when it points to a way out of his present situation. He is sent to a small restaurant called Marta's Place and his luck seems to turn.

Marta is a older woman making a small success of her restaurant located in a changing neighborhood with a limited customer base. Luckily, she is a good cook and willing to give unskilled help a chance. As time passes, Hal becomes more than a helper.

But even as things are looking up for him, Hal takes chances that could ruin everything. Then he is accused of murdering a woman he knew. This is a blow that threatens his new security at a time when Marta is making big plans. His only hope is that he can keep her from finding out.

Talented author Carl M. Albrecht has crafted an interesting study of life and how one can go from rags to riches with just a little luck and lots of hard work. Mr. Albrecht has a thorough understanding of human desires and what motivates a young man who has been drifting through life on the bottom of society. You'll want to know if he can attain a better position in life and keep it.

I'm pleased to recommend Marta's Place as well worth the time. A well told tale with lots of emotions and interesting characters. You may recognize them as people you know or have met. I did.

Enjoy. I did.

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The New Book Review is blogged by Carolyn Howard-Johnson, author of the multi award-winning HowToDoItFrugally series of books for writers. It is a free service offered to those who want to encourage the reading of books they love. That includes authors who want to share their favorite reviews, reviewers who'd like to see their reviews get more exposure, and readers who want to shout out praise of books they've loved. Please see submission guidelines on the left of this page. Reviews and essays are indexed by author names, reviewer names, and review sites. Writers will find the index handy for gleaning the names of small publishers. Find other writer-related blogs at Sharing with Writers and The Frugal, Smart and Tuned-In Editor.
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Iggy the Iguana Is Back!

Iggy the Iguana Chapter Book Series
Title – Summer League
Author – Melissa M Williams
Publisher – Long Tale Publishing
Genre – Children’s Chapter Book
ISBN: 978-0-9818054-2-9
Paperback $9.99
ISBN: 978-0-9818054-3-6
Hardback $15.99
190 pages


Reviewed by Author Geri Ahearn

Summer League is the second book in the Iggy the Iguana Chapter Book Series for boys and girls ages 7 to 11. The characters you love in Iggy the Iguana are all back, gearing up to play ball, even Iggy’s silly little sister! After an exciting school year, Iggy and his friends kick off their summer vacation with some fun in the sun and ... baseball! The summer proves to be full of lessons, eye-openers, and ultimate excitement. Who would have thought you really do grow up over the summer time!



The hero in this delightful children's story is Iggy, who is a loveable nine year old, and the new kid on the block. It's hard enough that Iggy has to deal with his smart, sassy younger sister, but there are other issues that he must also challenge. As Iggy prepares to enter a public school for the first time in his life, not knowing anyone, he realizes that he needs to make lots of friends. Along with trying to prove himself
worthy, he is forced to deal with bullies, and his first childhood crush. Snap Shell, Kit Kat, and Molly all have unique personalities, and are extremely funny. Dragon D tries to act very cool, but does this type of personality fade away, after everyone really gets to know you? Does Iggy have a tough time trying to fit in, and who makes him feel comfortable?

How does Iggy feel about Lizbeth? Does Iggy survive the trials and tribulations of his age group on his journey through elementary school? I highly recommend this wonderful children's book that will touch the hearts of readers of all ages. Children will be able to relate to the story, and learn from those lessons through a fun, easy, and humorous read. Melissa M. Williams presents everyday issues, along with simple solutions in an interesting story, with adorable characters. This book will encourage children to be considerate and caring, with a positive attitude. The author includes the true value of family and friendship, which is an essential stepping-stone from childhood to adult.

There are serious moments, funny moments, and touching moments. This fun and easy read is recommended for any child who is preparing to enter elementary school, and for children in this age group who are changing schools, after moving to a new location. How does Iggy adapt from an All Lizard School to a public All Animal School? The characters come to life as Iggy and his friends experience their first school year together, issues get resolved, and emotions become heartfelt in this educational, children's adventure. "IGGY THE IGUANA" is as thrilling as Walt Disney's LADY AND THE TRAMP, and as funny as CHICKEN LITTLE.

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The New Book Review is blogged by Carolyn Howard-Johnson, author of the multi award-winning HowToDoItFrugally series of books for writers. It is a free service offered to those who want to encourage the reading of books they love. That includes authors who want to share their favorite reviews, reviewers who'd like to see their reviews get more exposure, and readers who want to shout out praise of books they've loved. Please see submission guidelines on the left of this page. Reviews and essays are indexed by author names, reviewer names, and review sites. Writers will find the index handy for gleaning the names of small publishers. Find other writer-related blogs at Sharing with Writers and The Frugal, Smart and Tuned-In Editor.
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