Visiting Scholar Lawrence B. Lindsey

While America has gained economically from globalization, the biggest gainers have been the hundreds of millions of people in the developing countries, notably China and India, who have joined the global middle class. But the United States has not promoted free trade only for its economic benefits. Beginning with the Marshall Plan and the Kennedy Round of tariff reductions, American trade policy has been based on the belief that prosperity is the best guarantee of peace and the most promising avenue to advance freedom around the world. Our decision to enter into an broad free trade relationship with China after the fall of the Berlin Wall followed this pattern. The current calls for protectionism would reverse an American security strategy that began with Harry Truman and has been followed by Presidents of both political parties ever since.

To prosper, we must make America the best place in the world in which to do business, invest, and create jobs. This means moderate taxation. America already has one of the highest corporate tax rates in the world, and some of the election proposals would sharply increase the taxation of entrepreneurs and people in high-tech, finance and engineering, the skills most in demand in the global market place.

Lawrence B. Lindsey is a visiting scholar at AEI.

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If the antiglobalization policies advocated by Barack Obama and Hillary Clinton in the primaries were ultimately adopted, they would not only keep the developing world impoverished, but would also ultimately suppress the wages of the very Americans to whom the politicians were trying to appeal.

Arthur F. Burns Fellow Peter J. Wallison

The U.S. Constitution created the world's first free trade zone when it prohibited the states from imposing duties or otherwise restricting trade with one another. The free movement of goods and people among the states, the framers of the Constitution had concluded, would create a more perfect union. And so it has. More prosperous, too.

What if the Constitution had instead permitted industrial states like New York, Illinois and Ohio to prevent the outsourcing of jobs to the more agrarian southern states of Texas, Georgia, and Oregon? The northern states probably would have kept their industries, but their sales down South would have suffered because people there would be producing low-value agricultural products and thus be unable to afford more expensive manufactured goods. Wages in the industrial states would have been suppressed by poor sales and by the influx of southerners looking for better-paying jobs. So the northern states would probably have sought to prevent migration from their agrarian neighbors.

If this sounds vaguely familiar, it should. It's what the world would look like if the anti-globalization policies advocated by Barack Obama and Hillary Clinton in the primaries were ultimately adopted. These sound like economic issues but they have a moral core. Despite the growth in India and China--the result of opening their economies to trade--billions of people still live in poverty because they do not have the skills to produce high-value products. If the opponents of NAFTA and other trade pacts succeed in the next election, they will not only keep these people in poverty but ultimately suppress the wages of the very Americans they are appealing to. For every job that could be performed as well at a lower wage in Mexico, India or Nigeria, there is a person in that country who is not learning a marketable skill, a person in that country who wants desperately to get into the United States, a U.S. wage earner who is not meeting his potential and a U.S. consumer who is paying more than necessary for a product. How is it that the framers in 1789 knew more about economics and morality than some of today's politicians?

Peter J. Wallison is the Arthur F. Burns Fellow in Financial Policy Studies at AEI.