With the economy facing the first real recession in almost two decades, both Senators Hillary Clinton and Barack Obama took the opportunity to pander to the local Ohio audience in a debate last week criticizing what they believe is the root cause of the problem, NAFTA:
Clinton and Obama, as their rhetoric suggests, operate under a flawed assumption that 'NAFTA causes of job losses.' It is an assumption that ignores the dynamism of American economy and overlooks fundamental principles of economics. The Democratic solution of economic isolation would undermine the entire North American economy and plants a dangerous idea in the American ethos.
Creative destruction, while running counter to the inherent conservative tendencies of the average person, is a real force that has driven not only the American economy, but the global economy, throughout history. A failure to accept this principle and attempts to counteract it only result in a stagnating economy and high unemployment. Western Europe is the quintessential example of this phenomenon where governments at all levels actively try to protect sectors of the economy in the name of preserving culture and tradition (sound familiar?).
Creative destruction results in higher efficiency, and efficiency breeds competitiveness. It brought us automated teller machines which have supplemented human bank tellers. It brought us automatic telephone switchboards which completely eliminated the jobs of switchboard operators. And today, it threatens to make the American industrial sector competitive once again.
Blaming NAFTA also ignores one of the biggest technological innovations of the 1990's: the Internet. The Internet has fundamentally changed the way of life of the average American. We can now shop, get our news and information (and dose of advertising), and be entertained without having to leave the comfort of our computer chairs. There are businesses which are entirely Internet based, and starting and promoting a business or idea has become easier than ever.
Economic isolation the easy answer to a tough political question.
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