Free Trade and the Protection of Industries





Free Trade and the Protection of Industries

Ha-Joon Chang’s essay My Six-Year-Old Son Should Get a Job: What is Wrong with the Present Global Economic Order?, examines different aspects of free trade, and the importance of protecting young industries, especially in the less developed countries. In the essay, he traces America’s economic growth and development, noting that the country was once poor and less developed, but the decision to protect its industries contributed to its growth. He also highlights the fact that other countries including Britain, Japan, and Korea, used some form of protectionism, which enabled them to become the developed countries they are today. With a combination of different analogies and allegories, he has managed to present a convincing document with interesting arguments concerning the global trade and market, which highlights the need of exercising fair trade practices

Chang presents an interesting discussion concerning the current global economic order, especially regarding free trade. He begins his discussion by presenting an analogy. Chang compares the industries in the less developed countries to his six-year-old son. He argues that people should have the same sentiments regarding the industries in the poorer countries that they do for a six-year-old child in the job market. This comparison presents the need of protection of the industries. He shows that just as a child needs the time to grow and develop so too do the industries in the poorer countries. The six-year child has much potential when he receives much needed education, which will enable him to develop his mind and to make greater contributions to the society in future.

 In the same way, industries in poorer nations can produce more when given the chance to grow. This will enable the countries to gain more knowledge and skills, and in the process master different technologies. This will in turn lead to the countries improving their capabilities and capacities, and it will enable them to compete with other countries on a fair level. By choosing to use an analogy in the beginning of his argument, Chang has made it easier for the reader to understand his main argument. Throughout the essay, the reader is able to relate his argument to the comparison he gives of his six year old, and this has helped to clarify the issues presented. In addition, his analogy captures the readers’ interest. The readers are interested in what he has to say after reading the first paragraph, since it is a unique introduction of an economic analysis focusing on global issues.

Chang’s manner of presentation and argument enhances his credibility, especially in his area of research. He has managed to illustrate his points and explain his evidence by looking back at the histories of different countries, and their ability to get out of financial problems and improve their economic situation. He illustrates the efforts of Alexander Hamilton, the first treasury secretary, in proposing measures that would help the country to develop its industries. He observes, “The core of his ideas was that a backward country like the US should protect its industries in their infancy from foreign competition and nurture them to the point where they could stand on their own feet.” Such protection would include measures such as tariffs and subsidies, as well as import and export bans of selected products and materials. Chang also points out the economic perspectives of other notable people including Adam smith and Thomas Jefferson who had opposing perspectives. He observes the decision of congress at the time of Hamilton’s proposal, and the developments that lead the congress to accept his proposal fully. Once congress decided to implement Hamilton’s proposals, it began realizing economic liberation.

He has not only used American history, but he has examined histories of other countries as well. He describes how the first prime minister of Britain initiated policies that placed the manufacturing sector in Britain above other countries. Other than tariffs, some countries used other measures to protect the infant industries. Such measures included banning imports and imposing quotas on imports, giving export subsidies on specific items and sometimes on all items, and encouraging exports by giving rebates on tariffs. Other countries discouraged foreign investors. He describes how the New York government in the 1880s introduced a law that banned foreign banks from operating, and how Japan closed many industries and imposed 49% ownership ceilings in foreign industries. Finland considered any form with more than 20% foreign ownership as a dangerous enterprise. By examining the histories of the current developed countries, Chang appeals to logic, and he seems to tell his audience that the less developed countries should use the same measures that the developed countries used so that they can secure economic development. He has used logos in his arguments, and this has helped in enhancing the credibility of the essay.

He points out how congress made the decision to increase the average tariff by 5% to 12.5% this increased to 40% once the country realized the importance of adopting Hamilton’s proposal. The British also increased their industrial tariff rate by 40-50%. Chang observes how other countries exercised different measures of protectionism, and how they would increase the tariff rates of different sectors while maintaining average tariffs. He notes how for instance, Belgium had an overall industrial tariff rate of 10% yet its iron industry was 85% and the textile industry was between 30-60%. He uses logos when he describes the importance of having equal players to ensure fair competition. He reasons that that there can be no level playing field if the players are of a different level. Countries in the developing regions should be allowed extra protection measures as this would ensure that they have a level playing field. The author has used pathos in the essay, which appeals to the audience emotions and sense of identity.

Many people are protective of their patents and copyrights, and countries have established laws to ensure that they protect the work of their nationals. Chang shows how some countries such as Netherlands and Switzerland were reluctant to secure patents and copyrights. Germany openly violated other countries copyrights and they passed on the inventions of other people as their own. America refused to include foreigners in their copyright laws and it did not recognize the copyright of materials printed outside the country, until late twentieth century. The American people continued to benefit from other people’s work. The use of patents and copyrights is important in the discussion because many people are sensitive regarding their work, and people identify and relate to these issues. In addition, the author’s decision to use his six year old child is a form of pathos. The audience will react differently to the suggestion that the violation of patents and copyrights is not a big deal, and that it hinders free trade. The author appeals to the audience by showing the absurdity of placing his sex year old child in the workforce.

Chang appeals to the audience emotions, when he describes how the rich countries have denied the poor countries a chance to be rich and developed because they do not want them to use the same economic measures they used historically. He observes how the rich countries, through the International Monetary Fund and the World Bank have continued to impose measure that limit the abilities of the poor countries. He adds that rich countries and the World Trade Organization continue looking for ways of reducing tariffs, banning subsidies and imposing other trade restrictions on the poorer countries. Chang appeals to the emotion of the audience by noting the failure of international organizations, and their unfair practices towards the poor countries.

The depth and breadth of the research included is impressive. Chang has used historical records ranging from the decisions and laws made and enacted by congress to the laws and legislations passed by the British parliament. He has examined historical records of different countries including Belgium, Japan, the Netherlands, Korea, Switzerland, and Germany among others. It is clear that he has gained much perspective and has developed more knowledge as he researched his work. For instance, when discussing the ban on imports that some countries took as a measure of protection, he notes, “Many believe, as I used to myself, that this measure was invented in Japan in the 1950s, but it was in fact invented in Britain during the 17th century.” This shows a level of increase in awareness brought about by the research he has conducted when preparing his argument. He has examined the work of individual authors such as Ernest Williams and Friedrich List. His research goes as far back as the eighteenth century. His in depth level of research has enabled him to develop a credible critique of the rich governments, and their rationale for making decisions, noting that they only end up hurting the poor countries economically.

Chang has used simplified language and his anecdotes and illustrations are easy to understand. He has not directed his message at a specific group of professionals such as the economists, by using technical language. Although he has addressed them in his argument, he has mostly focused on presenting an argument that is all inclusive in the sense that many people, regardless of their level of education and knowledge, can understand his sentiments. The choices he has made when presenting his arguments are appropriate and many people can relate to them. he has used illustrations of a young child in a workplace environment, and team sport regulations. Many people can relate to such illustrations because they are part of people’s daily life. Moreover, many people, whether economists or not, understand some elements of economics. They understand what it means to have subsidies and tariffs, in addition to having poor standards of living because of unfair trading practices.

Chang’s argument makes interesting observations, concerning the historical economic decisions that different countries made. His argument is insightful and he offers a lot of historical knowledge, most of which is not covered in historical texts. This makes it easy for people to understand his argument, and although convincing, some people would find reason to argue and contradict some of his opinions. However, I tend to think that his audience would most likely agree with his perceptions, especially because of his credibility in arguing. Many people who understand the current trading practices oppose the decision of international bodies such as the International Monetary Fund, and the World Bank. They do not support the decisions of the rich countries in imposing different measures and regulations on the poorer countries, which only continue making them economically weaker and poorer. Such people would find a lot of information to support their views in the essay.

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