Module 7: USA: The Land of the Free Market?
Reading
Pietra Rivoli, The Travels of A T-Shirt in the Global Economy: An Economist Examines the Markets, Power, and Politics of World Trade (2014, Wiley), chapters 9-11.
Questions to Think About
- What is the ‘race to the bottom’? Does it happen?
- Might the owners of factories losing to low labor competition from abroad engage in political action to obtain government protections? Who does Rivoli describe?
- Who competes politically with owners of factories losing to low labor competition from abroad engage seeking government protections
- What side do most economists favor in principle: factory owners seeking protection or their opponents favoring freer and more equal terms of trade? Why?
- How might economic policy conflict with political policy?
- How might sound business sense require getting involved in politics?
- Do U.S. rules of textile imports make rational sense? If not, why not?
- What undermines U.S. textile jobs more: competition from cheap imports or increases in productivity?
- Who might benefit the most from U.S. textile import quotas, U.S. workers, or other countries?
- “Why do the 99.99% of Americans who are not textile and apparel workers put up with this maze of textile policy?” (question asked by Rivoli)
- Think about the implications of this quote from Rivoli: “The economic benefits of free trade are diffuse, while the costs are typically concentrated.”