Free Trade Doesn't Work: What Should Replace It and Why |  | Author: Ian Fletcher
Creator: Edward Luttwak
Publisher: USBIC
Category: eBooks
In Stock
Rating:  30 reviews
Sales Rank: 25,897
Format: Kindle Book
Media: Kindle Edition
ASIN: B003MAKBWC
Publication Date: January 22, 2010
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Product Description
This very readable book is aimed at both ordinary concerned citizens and people with a bit of sophistication about economics. It is a systematic examination of why free trade is slowly bleeding America's economy to death and what can be done about it. It explains in detail why the standard economic arguments free traders use all the time are false, and what kind of economic ideas - well within the grasp of the average American - justify protectionism instead. It examines the history and politics of free trade and explains how America came to adopt its present disastrous free trade policy. It looks at the breakdown of specific industries and how we can rebuild them and bring millions of high-paying jobs back to this country. It examines what's wrong with NAFTA, CAFTA, the WTO, and the proposed Trans-Pacific Partnership. It is sharply critical of the current establishment, but from a bipartisan point of view, so it should satisfy progressives, conservatives, and everyone in between. Unlike many past critiques of free trade, it is economically-literate; it also explains New Trade Theory, the hot new area of economics that critiques free trade.
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Showing reviews 1-5 of 30
A Passionate, Well Thought Out and Superbly Written, Plea for Reason and Sanity on Trade February 6, 2010
Ron Baiman (Chicago, Illinois)
14 out of 17 found this review helpful
This is an excellent book on a very important topic. The U.S. economy is hemorrhaging high quality export industry jobs at an astounding rate and a major causal factor is the mistaken and destructive "free trade" doctrine, the legitimating factor behind "free trade policy". Almost half of our manufacturing workforce has disappeared since 1987 and more than a third of large factories just since 2001. Not coincidentally 2001 is the year China joined the WTO. Our country is in a deep hole that desperately requires new thinking and new policies.
This book summarizes the theory, the policy, and the history of "free trade" and provides a well-argued alternative that is described with insight, clarity, and in a vibrant and captivating style. The book is divided into three parts: the Problem, the Real Economics of Trade, and the Solution. In the Problem section, Fletcher describes the US situation and goes over and tears apart the standard arguments for free trade and some of the wishful "remedies" to the U.S. trade problem such as more "education" and "post industrialism". In the second part, he provides a masterful analysis of core ideas of "comparative advantage" and why this does not justify free trade. The final section of the book provides a wealth of information on actual trade policy and real world trade that leads into a first rate summary of recent theoretical advances in "real trade" theory (as opposed to the largely ideological and mythological "free trade" doctrine). He than proposes and argues for a politically and economically practical alternative: a "natural strategic tariff" that would in many ways level the playing field between US and foreign exporters in the most important dynamic manufacturing and service export sectors.
Fletcher proposes that any regressive tax effects of a Strategic Tariff be neutralized through rebates to low-income consumers. I would go farther and propose that revenue from the tariff be used to raise wages and environmental and social standards in developing countries along the lines of a "solidarity trade" policy as proposed for example in Baiman "Unequal Exchange Without a Labor Theory of Prices: On the Need for a Global Marshall Plan and a Solidarity Trading Regime," Review of Radical Political Economics 2006, 38(1). I would have also liked Fletcher to include a reference to the fact that not only does Ricardian comparative advantage lead to woefully misguided trade policies, it is also mathematically erroneous on its own terms as a argument for "free trade". In fact for Ricardo's parable to work England would have to put a tariff on Portuguese wine - see Baiman "The Infeasibility of Free Trade in Classical Theory: Ricardo's Comparative Advantage Parable has no Solution," forthcoming in Review of Political Economy 2010 22(2). For a comprehensive review of: a) Large scale permanent living jobs program, with complementary, b) trade policies, and c) industrial policies, see "Toward a New Political Economy for the U.S." on the Chicago Political Economy Group (CPEG) website: [...]. However, though he doesn't go as far as I would have liked in some areas, I couldn't agree more with the basic point of the book that free trade doesn't work and that something must be done to re-balance world trade.
Fletcher's vision is informed by a Schumpeterian "evolutionary" economics approach that has been championed by Norwegian economist Erik Reinert as the "Other Canon" of a more than 500 year old, but periodically lost, wisdom in political economy on the means by which nations become wealthy. This is a very important school of thought that is fiercely opposed to the reigning "Neoclassical" economic paradigm. This is an very important book that should be required reading for all policy decision makers and students of political economy. Our future may hang in the balance. Read this book! It is a breath of fresh air, even for "old hands" like myself who have been critiquing and reading critiques and alternatives to free trade economic policies for many years.
At Long Last January 30, 2010
James Case (Baltimore, MD)
6 out of 7 found this review helpful
Paul Samuelson, second only to John Maynard Keynes in stature among twentieth century economists, once conceded that there are many more arguments against free international trade than for it. Yet he never publicized the contrarian arguments. Now, at long last, the job has been done for him. Ian Fletcher's new book FREE TRADE DOESN'T WORK: WHAT SHOULD REPLACE IT AND WHY? offers a compendium of such arguments.
Fletcher devotes but a single chapter to the (currently decisive) argument in favor of free trade. It is purely theoretical, consisting of little more than David Ricardo's long over-rated "principle of comparative advantage," reduced by modern scholarship to a mathematical theorem. The gory details may be found at www.FreeTradeMath.org. The mathematics don't make the theorem true. They only make it AS TRUE as the assumptions from which it is deduced. Fletcher lists seven "hidden assumptions" that appear both necessary and sufficient to invalidate Ricardo's conclusion that free trade is, at all times and in all places, advantageous to the practicing nations.
The beauty of Ricardo's principle is that it absolves policy makers of any need to determine the facts of the matter. If free trade policy were indeed universally advantageous, no nation would have any incentive to practice anything else. Fletcher devotes the bulk of his book to the many powerful incentives that now cause -- and have long caused -- most nations to adopt quite different policies. In the process, he debunks a multitude of claims traditionally made by the advocates of free trade:
* NAFTA was sold on the claim that it would create 200,000 US jobs before the ink was dry. In fact it promptly exported many more than that, while depressing wages in the ones left behind.
* The British Empire prospered after adopting free trade in 1860. In fact the already prosperous economy withered.
* Free trade is "tried and true." In fact, trade restrictions are as old and universal as trade itself. When tried, free trade has soon been abandonned as disadvantageous.
Fletcher's book should be read by absolutely everyone involved, or in danger of becoming involved, in the policy process.
A real eye-opener to the flaws of "free-for-all" trade! January 27, 2010
T. Mullikin (Charlotte, NC)
7 out of 9 found this review helpful
Fletcher points to the ideal of "free trade" and proclaims it is not wearing any clothes! Instead of following along with the crowd, Fletcher systematically presents the failures of an unrestrained trade system and offers up a balanced discussion of what a managed trade system could accomplish in its place. His discussion of the World Trade Organization's goals, and of China's open defiance of the spirit of WTO rules, is refreshingly honest and timely. A direct move toward managed and open global trade is what America needs from its economic emperors, and this book is an important step in that direction!
A must read for economists and policy makers and citizens! January 26, 2010
James A. Miehls (Amherst MA)
3 out of 4 found this review helpful
I highly recommend Ian Fletcher's new book "Free Trade Doesn't Work" both to non-trade economists, economists who have been preaching the same old "comparative advantage" rubbish in their lectures for years, and to anyone who wants to learn more about an important topic for the whole world. It is often stated that "free trade is the only thing that all economists agree on".
As one of the few economists who never subscribed to this view, I think the world needs more books like Fletcher's and this one is a great start!
This book is both accessable to those without a deep background in economics but also contains a lot of information that would be surprising and relevant to most economists today.
The first section is especially well done, it provides fresh look at classical and neoclassical trade theory. Fletcher does not just dust off theories economists have read over and over, but provides new and practical criticism to models that are commonly accepted almost dogmatically in the economics profession.
The later sections of the book, suggesting policy moving forward are also clear and innovative. This book is a great choice for those looking for an alternative to the same warmed over free trade theories that have given us global imperialism and ever spreading capitalist exploitation.
The bottom line is that in my opinion the more economists, politicians, and and citizens of the world who read this book the better chance we have of moving the global economy in a direction that can benefit us all.
Although I do not agree with all of Fletcher's policy suggestions or methodology the book takes important steps towards opening dialogue on a topic that is often considered closed.
James Miehls
best book currently available on how free trade works January 26, 2010
Alan G. Nasser Sr. (Tacoma, Wa United States)
2 out of 3 found this review helpful
Ian Fletcher's book on free trade is the best I've read, and there good ones out there, pro and con - e.g. by Sherrod Brown, Ravi Batra, Jagdish Baghwati, Harry Shutt, et al. To my mind Fletcher's is far superior. He provides a detailed and pellucid treatment of what free trade is and how it works, or, more precisely, why it does not work for ordinary folks. The presentation of what free trade is acquaints the reader to free trade in terms that could have been used by an articulate defender of free trade: FT is not presented as a straw man but is rather explained in its strongest form. Thereafter Fletcher proceeds to present a detailed critique of the main arguments of FT's defenders, replete with clear and helpful examples, and with no cant or rhetoric. Fletcher has made rigorous economic-analytical thinking accessible to an intelligent non-economist. -- I recommend this book to the general reader interested in one of the major economic issues of the time, to professional economists and to teachers.
Showing reviews 1-5 of 30
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