Ghost Towns

Some months ago I returned from a brief trip through several states in the American South.  As I drove through a few of the small towns I was struck with a sense of loss.  The old cotton mills, tobacco factories, and furniture manufacturing facilities have virtually disappeared, and most small-town residents have either migrated to a large city or stayed put and tried to hold on to the old homestead.  It is not easy.

Looking around the old downtown areas can be depressing.  The movie theater is long closed, and many of the storefronts are boarded or simply empty.  The entire town looks unkempt, and few shoppers are in evidence.

Areas that were not so dependent on one industry have fared better than the mill towns, and all these places are trying desperately to hold on to their sense of community.  Some have been more successful than others in attracting new businesses, pursuing historical restorations, etc.

I imagine that similar scenes are also common in America’s rust-belt, those areas of our country once dominated by various manufacturing interests that have gradually succumbed to foreign competition.

There is a broad consensus among economists that protectionism has a negative effect on economic growth and economic welfare, while free trade and the reduction of trade barriers has a positive effect on the overall economy.  In a 2006 survey of American economists, almost 90% believed that the United States should remove its remaining tariffs and other barriers to trade.  It is clear that the vast majority of economists still feel that way, and they feared that former President Trump’s flirtation with tariffs and protectionism might have had unhappy consequences. 

Economists will admit that the removal of trade barriers can cause significant and unequally distributed losses in some sectors and lead to the economic dislocation of workers, but they also believe that, in the long run, free trade is a net gain for our nation and for the world.

However, I suggest that you not attempt to sell free trade benefits to the hurting residents of old mill towns and factory towns.  They are convinced that there must be a better way to make the transition to a world economy.  Domestic industries are constrained by a plethora of regulations pertaining to wages, health regulations, and environmental constraints, whereas their foreign competitors may be completely unregulated. 

Fair trade, not free trade, is their rallying cry.  I believe they have a point.

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