TWIF+Chapter+5

America and Free Trade

In chapter 5 Friedman discusses the importance of Free Trade and its' effect on the American economy. He questions how we as a society are going to be able to compete with countries like India and China who are producing ridiculous amounts of applicants for the same jobs Americans are applying for. He makes a reference to David Ricardo's theory, who was an English economist, about the concept of each nation specializing in the production of goods and trades with other nations for the goods they specialize in. (264) In this case both countries would benefit from this type of trading, which proves that it is not necessary for America to outsource or use offshoring in order to protect themselves from a decrease in the economy. Freidman writes, "...that while protectionism would be counterproductive, a policy of free trade, whlie necessary, is not enough by itself. It must be accompanied by a focused domestic strategy aimed at upgrading the education of every American, so that he or she will be able to compete for the new jobs in a flat world. And it must be accompanied by a foreign strategy of opening restricted markets all over the world (including some of our own, like agriculture), thereby bringing more countries into the global free-trade systsm -- which will increase demand for goods and services, spur innovation, and reduce both unemployment and job migration across the globe." (265) In this statement I feel the main points of what Friedman is discussing in this chapter are brought up.

As the chapter continues he goes on to talk about difference between idea-based goods and physical goods. Some examples of idea-based goods are consulting, financial services, music, software, pharmacuticals, etc. Examples of physical goods are lumber, steel, etc. In the case of idea-based goods, Friedman recognizes the fact that these types of products can be created and sold world wide. However, the selling of physical goods are limited to the people who need it and the fact that many different companies sell the same thing. In the end, it's the creative, use of our imaginations that will continue to produce not only a powerful economy in America, but also create jobs for the American people. Friedman states, "There may be a limit to the number of good factory jobs in the world, but there is no limit ot the number of idea-generated jobs in the world." (269) A perfect example is given using the company Starbucks. People use to enjoy going to get a cup of coffee at a coffee shop, but now people NEED to get a cup. As a result, an entire industry has been created based on these simple changes in the way society has developed. Of course he explains that not every change will be so simple or easy and yes, there are some negative effects due to the expanding of trading world wide; however, Friedman strongly points out that the over time things do catch up and produce a positive result as long as we acknowledge that there is no limit to what we create.

Finally, I feel that the quote,"The Indians and Chinese are not racing us to the bottom. They are racing us to the top -- and that is a good thing!" (274) truly sums up Friedmans perspective on Free Trade and global marketing. In the end, people want a better life for themselves, their families, and their countries. By making the appropriate adjustments, although difficult at times, and keeping up with the ability to expand will only benefit all who are involved.

Nicholas C. Analysis I am defiantly not an advocate for outsourcing, or off-shoring of any jobs here in America. Now as for free trade it has proven to work and benefit our county. However the reality is not what I think or what several million American’s think, but rather what’s more economically beneficial. All companies look for is their maximal profit gain (money) from their organizations and if they can make more by outsourcing away from Americans, why not. Throughout the chapter Freidman provided many clear and valid ways that free trade outsourcing and off shoring would prevail. Moreover it is hard for me to decide weather or not I agree with the entire idea. Perhaps with the current situation our country is facing, might be better off allowing more minds at work. Not so much for the increase in the “man power” or “Lump of Labor”, but rather for the knowledge workers to be creative and create jobs sooner. As it was mentioned in the text, there is no limit to the number of idea generated jobs in America (Friedman 267) “If you believe human wants and need are infinite, then there are infinite industries to be created, infinite businesses to be started, and infinite jobs to be done, and the only limiting factor is human imagination” (Andreessen 267) If we collaborate with more and more countries, perhaps we are increasing the possibilities of these new jobs being create d and in turn would save us from our present situation. On the flip side, what concerns me is that since America has proven to produce more idea driven workers than any other county in the world, are we really going to benefit. What I know for sure is that our country needs to be creative and spark up the job production and drastically reduce the dept we are facing. Last year many positions where cut in my district due to the lack of funds. Just recently our governor cut big programs like “NJ After 3”, a afterschool program that has been said to be effective for hundreds of city kids. He is currently preparing to touch our pensions and medical. These actions, along with many other unfortunate cuts are being made all to free up government spending Mark S