Donald Trump is bragging about eliminating NAFTA. Or has he actually made only minor modifications after throwing a tantrum, then declared victory while making the adults clean up after him? The details favor the latter view. The new deal leaves Canada out at present, and as reported by David Smith in The Guardian, “The agreement with Mexico requires 75% of a car’s value to be manufactured in North America, up from Nafta’s current level of 62.5%, Reuters reported. It would also require 40% to 45% of the car to be made by workers earning at least $16 per hour.” Bloomberg adds that farm goods remain duty-free, but at least we will not have to suffer under the name, NAFTA, any more.
If all of this sounds like Trump’s negotiations with North Korea, perhaps that is because we are watching too much mainstream media. Or so Trump would like us to believe. His bumbling about with the machinery of government are a danger to the nation and the world, though mercifully he is his own worst enemy, and his spanner is said to be short in any case. But an administrative doctrine that consists primarily and almost entirely of undoing whatever previous Democratic presidents got done is no way to run a country.
Trump does inspire the trite, and in this case, the accuracy of broken clocks comes to mind. NAFTA has produced mixed results, as the Wharton School of Business acknowledges. The participating nations have experienced growth following the trade deal’s passage — and if I awaken a hour before dawn and pray that the Sun will appear, lo! there it is — but the factors that drive economic numbers are legion, and as the Economic Policy Institute observes, NAFTA in particular and free trade deals generally also have the effect of allowing a race to the bottom in terms of wages and regulation.
All of this is so 1994, however. The Internet was just taking hold in the wider world outside of academia, and robotics and artificial intelligence were primitive, more speculation than fact. But we are now having to give serious consideration to the effect that machines will have in the economy as they more and more are able to do jobs that low-skilled human workers used to do. How far this may go is one of the common themes in one of my favorite genres to read and write, science fiction, but at a minimum, the trend in the long run looks likely to make discussions about free trade passé.
The best potential of free trade is its ability to break down walls, and that offers an explanation of why Trump and his supporters are suspicious of it. The movement of goods brings the movement of ideas along with it, as the Library of Alexandria illustrated over two millennia ago, and abuses of basic rights — whether in a cult or a country — are easier if the victims are trapped. Still, the immediate social costs are something that we have to address, no matter what trade agreements we have.
It is tempting to dismiss Trump’s supporters as mere racists, but the concerns that many of them have about an economy that is rigged against them are reasonable — no matter how much of a con game Trump’s promised solutions have turned out to be. The real way out of this involves two key steps, one that ameliorates current problems and another that reshapes society.
The separation between capital and labor, to use the labels of a hundred years ago, has been widening for decades. Worker productivity has grown steadily while wages have remained flat since the early 70s, and the pay of executives is now hundreds of times what an average worker makes. The answer to these facts is simple, but hard: If corporations refuse to give a fairer balance in compensation up and down the organizational chart, taxes are the policy solution. Tax increases will not come until voters come to understand in large enough numbers that class struggle is real and most of us are not in the class that the Republican Party works for.
What, then, would we spend the revenue on? Traditional programs that involve transferring cash or its equivalent have done good, but these solutions are too often aimed at sustaining people as they are, rather than helping them climb upward. And as the advance of technology discussed above continues, a bread-and-circuses approach will leave an ever increasing percentage of the population unproductive.
The better choice, regardless of the tax policy that we adopt, is to make education a much greater priority. And yes, I do mean throwing money at this. When we have money, we spend it where our priorities are, and somehow, we always find the funds to go to war or to put people in prison for possessing personal amounts of marijuana. Once again, we come back to the need for voters to think for themselves and act accordingly.
What education does is elevate the potential of the population to come up with new jobs that machines cannot do. Or that a handful of gatekeepers can control, as the platform on which this article appears illustrates. Not so long ago, publishing was limited to what the few accepted or what the many could afford, but now it is possible to get the word out to the world and to make some money while doing it. And not so long ago, “app” sounded like the lazy person’s name for the piece of paper that had to be filled out to be eligible for a job opening, whereas today, who knows what the limit is in the potential of a creative person who understands programming.
Does this sound like pie in the sky? Of course it does, especially to anyone whose interests lie in maintaining the status quo. But barring societal collapse — something that was conceivable when I was a child of the Cold War and is once again a realistic possibility — the direction of technology makes free trade inevitable. The question is who will benefit from it, and the answer to that is something we can decide.