Reading Analysis #8 "A set of Paul Krugman Articles" (10/30/2011)

A)
              In all three pieces Paul Krugman defends free trade against various accusations. In Ricardo's Difficult Idea he defends the basic concept that through comparative advantage and spezialitzation, trade makes everyone richer. In Praise of Cheap Labor, shows why very low wages and less then enviable working conditions should not be considered evil or be stopped. He explains that these jobs are much better than anything available before and are the best way for these countries and people to escape poverty. In the last he argues that most people do not really care about working conditions at all, they care about imports that cause competing American companies to go out of business. The second article was the most interesting for me because it explained the very counter-inuitve concept that cheap foreign labor is actually good for those countries  Most people would argue that it is bad that these people work at such low wages, and that something should be done to stop it. However, as Krugman explains, this is actually the best deal going for both these people and their countries. No other route will help as many people as quickly as the employment of cheap labout to manufacture exports. This is a counter intuitive to people, but it is the truth because before ethey were employes in these jobs they had no jobs at all. As more people are emloyes competitions for labour will increase and the wages will rise.

B)

1. Ricardo's model shows how trade benefits everyone, and increase wealth. Which everyone agrees is good, However, does this mean the governments should do nothing to help those people with jobs lost to foreign competition?
2. Krugman's article, In Praise of Cheap Labour states that aid actually only creates chronic dependency. Does it follow that governments in order to help poor regions should invest in their economies, rather that give aid money?
3. Could we as American consumers put enough on clothing manufactueres (throught boycotts their clothing) to force increase in wages and working conditions? And if we could, would it be right to do in order to help those people?

C)
These article demonstrate why free trade is always the right answer. That despite all of the arguments made against it, nothing compares with the ability of free trade to lift people from poverty. On top of this the people who argue against free trade unknowingly advocate more harm to people in developing countires, then those business people who they label as greedy capitalist.