Imagining a World Without Trade
Imagine the scenario. . .
The year is 2023. The current President of the United States has been in office for six years. He campaigned on a platform of protectionism and has followed through on his promise to close all U.S. borders to trade. Everything bought (legally) in the U.S. is made in the U.S. The unemployment rate is 16 percent. Per capita GDP – a proxy measure for people’s standard of living – has fallen 20 percent in four years. Americans are all much poorer; there are fewer jobs for those who want them; the things you buy are more expensive and lower quality – and some things you can’t get at all.
It’s in this environment that you wake up each morning, at 3:00 a.m. You walk down the short hall to your kids’ bedroom – they share a room because your home is only 800 square feet, with two bedrooms, one bathroom, a small living room and a kitchen. All new houses are this small because the demand for construction materials – wood, for example – is far greater than the U.S. alone can supply, making those materials very expensive.
You gather with your kids – your son is 8 and your daughter is 5 – at the kitchen table. Breakfast is oatmeal, milk and water. Orange juice is a luxury you can only afford on special occasions – the demand for oranges is far greater than the orchards in Southern California, Arizona and Florida can supply, so one piece of the fruit costs $10. You don’t drink coffee anymore because it’s not grown in the United States.
You glance at the clock on the oven – a clock that works only half the time because it’s so old (you can’t buy a new one because consumer electronics are so expensive). Before the U.S. closed its borders to trade, there were an average of 3 TVs and 2 computers in every American home. Now, only the richest few can afford such luxuries. You realize that you’re running late, so you rush the kids to finish breakfast. They dress in hand-me-down clothing and you notice that your son’s shoes are developing holes in the toes. You cringe, but you can’t afford to buy new shoes except once a year – the selection of kids’ tennis shoes is poor, the quality is worse, and prices are outrageous.
You don’t drive a car anymore – the safety and reliability of many new cars is abysmal and even a two-door jalopy costs $40,000. Not to mention that gas is $7.50 a gallon. Instead, you walk your kids to school, then continue on for another mile to the express bus stop, which takes you and your neighbors (those fortunate enough to have jobs) into the industrial center of the city. Your bus ticket costs $10 – a good chunk of your day’s take-home pay.
You have a master’s degree in computer science, and just seven years ago you were a mid-level manager at IBM making $125,000 a year. Today, you work at a textile factory sewing together children’s sneakers – you earn $10 an hour. During your lunch break, you work on the birthday present you’ve been making for your son. It’s a remote-controlled car that you’ve been piecing together with scrap parts. It only makes right-hand turns – but to your son, it will be the coolest birthday present he can remember.
On your way home from work at 5 p.m. – you work six 12-hour days a week now – you overhear another bus passenger talking about a letter he got from family in China. It read:
We hope you are well – we hope that life in the United States is better than it is here in China. Since the U.S. closed its borders to trade – and the rest of the developed nations, like the EU and Japan, followed suit – life has been very bad here. Our economy used to grow at 9 percent per year as new businesses sprung up to make things from toys to electronics for consumers in Europe and America. Now, factories sit idle. Unemployment is 40 percent.
We’re the lucky ones – we have jobs working on the farm, planting rice, picking tea leaves, feeding the pigs and digging ditches. The other day, we were awarded bath towels and wash basins for being such model workers. Forty-five years ago, Deng Xiaoping told the farmers to “work hard and get rich” – and many did. Today, we just work hard.
We receive a meager wage from our work on the farm – it’s hard to believe we used to be engineers for one of the world’s largest electronics manufacturers. Most of what we earn we use to purchase ration coupons – which are required to get even the most basic supplies, like clothes, rice, and cooking oil.
In the city, life is quiet again. We no longer hear the honking of car horns – that’s been replaced by the “ding ding” of bicycle bells – and only the best-off among us have that luxury. I’ve been saving each week to buy another coveted luxury – a radio. Mother would prefer I save to buy a sewing machine, so we can start a small clothing shop, but it’s almost impossible for entrepreneurs to succeed here anymore.
Your cousin Wen works at a factory in Beijing making clothes now – he had to drop out of business school when the multinational company he was working part-time for left the country. He says that he can make more shirts in one hour than any of the other workers at the factory – not that it really makes a difference. Most of the other workers, like Wen, are highly educated. He seems miserable.
We hope you’ll write us back, but we may not be able to write you again for a while, as paper and ink are very scarce here – and postage is a week’s pay. Anyhow, we’re sending you hugs and kisses.
Your family in China
You arrive home at 6 p.m. and your children are sitting at the kitchen table doing homework. You wonder, sometimes, what the point of learning math and science is anymore, if most jobs are industrial labor jobs like yours. You sigh and hope, like you do every day, that one day the United States will be an open market economy once again and your children will have a better, happier, freer life.