The development of a unit of study continues with this
posting. The reader who has not been
reading this blog of late should know that it is, in real time, reporting on
the development of a unit on foreign trade and how that trade has affected the availability
of jobs in the US. To date, this account
has identified twelve insights regarding this topic and has reported on lesson
ideas for each of the insights. This
posting picks up on this development.
The thirteenth
insight is:
Often in American discourse concerning
international trade, it is portrayed as a zero-sum competition. This is the case due to the loss of
manufacturing jobs to other countries.
But there have been positive results due to this trade. For example, in the last two decades there
has been more people rising out of poverty, worldwide, than ever before. Unfortunately, this has been accomplished by nations
ascribing to “beggar thy neighbor” strategies.
To heighten their exports, nations, such as China and Japan, have
subsidized their companies, instituted restrictive regulations to discourage
imports, and have manipulated their currencies.
In short, they have distorted market forces, but the irony is, in the
extreme, these policies hurt these countries long-term interests such as in
consumer demand.[1]
Lesson idea: Teacher
writes on board the following strategies:
restrictive regulations, subsidizing businesses, and manipulating
currencies. For each strategy, students
investigate and answer these questions:
how is this strategy done? How
does it lead to short-term advantage?
How does it pose long-term disadvantages? How does it distort market forces?
The fourteenth insight is:
In counter distinction to the
distorting policies utilized by Asian countries and identified in the
thirteenth insight, European countries use more pro-market strategies. They rely mostly on nurturing their
businesses and training their workforces.
This approach is particularly seen in the Nordic countries (Denmark,
Finland, Sweden, Norway, and Iceland).[2]
Lesson idea: Students,
using the same questions as were used for the thirteenth insight, investigate
the significance of this insight. What
needs to be spelled out is: how does a
national government “nurture” domestic businesses, especially in the
manufacturing sector? There are other
insights in this unit that provides information on this account.
What seems to be central to a
nurturing approach is a strategy that avoids direct subsidy and instead focuses
on creating a fertile environment of entrepreneurial factors. See internet site: https://www.weforum.org/agenda/2014/12/6-ways-governments-can-encourage-entrepreneurship/
. Another country that can be added to a
list of nurturing countries is Germany.
The fifteenth insight is:
In the US, while the federal
government is mired in debating its proper role, state governments have become
very aggressive in competing for jobs, especially in the manufacturing
sector. South Carolina is a good example
of this. Some strategies are aimed at
luring such jobs from other states. This
approach is particularly true in the south where they rely on being “right-to-work”
states (a provision of the Taft-Hartley Act that diminishes the bargaining
position of labor unions). Of course,
such moves do not help the over welfare of the American economy. Other strategies include tax incentives
(mostly tax reduction plans); but best of all are investments in infrastructure
(highways, bridges, communication facilities, schooling and training
facilities, etc.). Also in this pursuit
of businesses and investment are larger cities.
In the extreme, subsidies can prove
to be hurtful by its diversion of public funds from needed public services and reliance
on “right to work” provisions can hurt manufacturing workers as they lower
wages and weaken legitimate union representation.[3]
Lesson idea: Students
are assigned the reading, “Government Subsidies for Business,”[4] by Marc
Davis and prepare to discuss the question:
State governments should provide businesses subsidies: yes or no?
The teacher should be prepared to play devil’s advocate; i.e., argue the
opposite of what students argue. So, if
the student argues it is good for state’s economy to subsidize a business (it
provides jobs), the teacher can point out it also siphons public funds away
from needed services, such as education.
A source of information concerning “right to work” laws is an internet
site that presents AFL-CIO’s position on this legislation. See https://aflcio.org/issues/right-work.
Sixteenth
insight is:
With President Trump threatening,
during his campaign, to institute protectionists polices against such countries
like China, there have been some worrisome reactions to such a move. The argument goes that it is a bit short-sighted
to blame China, for example, for the loss of jobs in the US. A more significant factor are the advances in
technologies. This includes advances in
artificial intelligence, automated and electronic manufacturing and
management. The result has been higher
levels of efficiency and productivity through the ability of companies to
eliminate manufacturing sector jobs. The
implication is that if the US engages in a trade war with China, this will hurt
Americans. A better solution is
increasing exports to China especially in high-tech products such as in
aviation technologies.[5]
Lesson idea: this
insight is favoring trade with China and can be used by those who favor
globalization. The teacher can ask
students to assume the role of a labor leader in the US. As established in another insight previously
cited, labor leaders have been generally against liberal foreign trade
policies. What arguments can a labor leader
make that would rebuke the general thrust of this insight?
Students, from the perspective of a
labor leader, formulate a list of supportive backing statements for more
restrictive policies against trade with China and other nations that are
emulating China’s strategy; e. g., South Korea and Vietnam. Following are two factoid statements that
relate to this insight and can be used in this activity.
·
There has been a reduction in average
labor needed to produce a car from .1 in 1999 to .07 in 2014. This reflects the manufacturing processes
have turned to the use of machines and robots to do what workers did in the
past, at least, in the auto industry.
Similar developments can be found in the machine and chemical industries
where job availability have grown slowly and, in some cases, has declined in
recent years.[6]
·
China has an increasing demand for high-tech
civil aviation, machine tools, integrated circuits, and other high-tech goods
and will reach $600bn by 2020. This is a
fraction (1/2) of the current (2015) trade deficit with China. But this calls on the US to ease high-tech trade
restrictions to China. The fear is the
stealing of intellectual property.[7]
It is anticipated that this phase of
this development – identifying the unit’s content – will be completed in the
next posting. Then the development will
shift its focus to the instructional strategy for the unit. The development marches on.
[1] Edward Alden, Failure to Adjust: How Americans Got Left Behind in the Global
Economy (Rowman and Littlefield, 2017).
[3] Ibid.
[4] Marc
Davis, “Government Subsidies for Business,” Investopedia,
accessed September 21, 2017, http://www.investopedia.com/articles/basics/11/introduction-to-government-subsidies.asp
.
[5] Wang Wen, “A US-China Trade War Would Cause Huge
Damage and Benefit Nobody,” Financial
Times, March 27, 2017, accessed September 22, 2017, https://www.ft.com/content/3b49cd2a-10ad-11e7-b030-768954394623
.
[6] Ibid.
[7] Ibid.
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