Because free trade increases GDP through comparative advantage and specialization but the effect is so diffuse over a large population that to each individual the benefit seems quaint. Consider countries do better with free trade by doing what they do best and exporting any surplus to trade. Hence no one has a big bone to pick except when the free trade affects them directly. When this happens, lobby groups are formed and there is little opposition because the benefits are so diffusely spread over a massive population. The govt often caves into the lobby hurting the more massive population. An example would be Bush caving into Ohio steel workers, who in the end costs the economy more jobs due to higher steel prices. Three quarters of people directly hurt by free trade often find new employment equal to or above their pre-free trade employment. In economics, comparative advantage refers to the ability of a party to produce a particular good or service at a lower marginal and opportunity cost over another.
Economist Ha-Joon Chang criticized the comparative advantage principle, contending that it may have helped developed countries maintain relatively advanced technology and industry compared to developing countries. In his book Kicking Away the Ladder, Chang argued that all major developed countries, including the United States and United Kingdom, used interventionist, protectionist economic policies in order to get rich and then tried to forbid other countries from doing the same. For example, according to the comparative advantage principle, developing countries with a comparative advantage in agriculture should continue to specialize in agriculture and import high-technology widgets from developed countries with a comparative advantage in high technology. In the long run, developing countries would lag behind developed countries, and polarization of wealth would set in. Chang asserts that premature free trade has been one of the fundamental obstacles to the alleviation of poverty in the developing world. Recently, Asian countries such as South Korea, Japan and China have utilized protectionist economic policies in their economic development.[15]
Arbitration everywhere: How contract fine print is stacking the deck of justice against the little guy
ReplyDelete-By inserting individual arbitration clauses into a soaring number of consumer and employment contracts, companies like American Express devised a way to circumvent the courts and bar people from joining together in class-action lawsuits, realistically the only tool citizens have to fight illegal or deceitful business practices.
-Some state judges have called the class-action bans a “get out of jail free” card, because it is nearly impossible for one individual to take on a corporation with vast resources.
-By banning class actions, companies have essentially disabled consumer challenges to practices like predatory lending, wage theft and discrimination, court records show.
-Corporations said that class actions were not needed because arbitration enabled individuals to resolve their grievances easily. But court and arbitration records show the opposite has happened: Once blocked from going to court as a group, most people dropped their claims entirely.
-Since no government agency tracks class actions, The Times examined federal cases filed between 2010 and 2014. Of 1,179 class actions that companies sought to push into arbitration, judges ruled in their favour in four out of every five cases
-Brian T. Fitzpatrick, a former clerk to Justice Antonin Scalia who teaches law at Vanderbilt University, said criticizing class actions for small awards was misleading. By their very nature, the lawsuits are intended to help large groups of people get back small individual amounts, Fitzpatrick said.
“Without a class action, if someone loses $500, they will not be able to do anything about it,” he said.
Walter Hackett, who worked as a banker until 2007, said the real threat was cases that force companies to abandon lucrative billing practice
-Jessica Silver-Greenberg And Robert Gebeloff, The New York Times |
Theodore H. Moran holds the Marcus Wallenberg Theodore H. Moran Chair in International Business and Finance at the School of Foreign Service, Georgetown University, where he teaches and conducts research at the intersection of international economics, business, foreign affairs, and public policy
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