Free Trade, Globalism & Neo Liberalism 1
Free Trade, Globalism & Neo-Liberalism
Joshua Rose
University of Phoenix
Free Trade, Globalism & Neo Liberalism 2
While free trade is said to be for the security and prosperity of the United States, it has
led to the outsourcing of American jobs and increased trade deficits. In February of 2007,
Hershey announced that it planned to eliminate 1,500 jobs and one-third of its existing U.S.
production lines over the next three years. Since then, Hershey has begun the process of six plant
closings within the United States. In the mean time, they have scheduled to begin a two and half
year phased startup of their new production plant located in Monterrey, Mexico. The plant will
employ approximately 500 Mexican laborers that are willing to work more hours for less pay and
poorer conditions then regulations would allow in America. Neo-liberalism advocates encourage
that the outsourcing of American jobs helps the United States stay competitive in a global
market, however free trade has put a strain on the economy and disrupted the United States job
market and future outlook.
The modern system of free trade, free enterprise and market-based economies, actually
emerged around 200 years ago, as one of the main engines of development for the Industrial
Revolution. In 1776, British economist Adam Smith published his book, The Wealth of Nations.
Adam Smith, who some regard as the father of modern free market capitalism and this very
influential book, suggested that for maximum efficiency, all forms of government interventions
in economic issues should be removed and that there should be no restrictions or tariffs on
manufacturing and commerce within a nation for it to develop. Over two centuries later the
evolution of neo-liberalism has shaped such policies as the U.S.-Canada Free Trade Agreement
(CFTA), in effect since 1989 to the North American Free Trade Agreement which became active
January 1st, 1994 during the first Clinton administration.
The world is becoming more globalized; there is no doubt about that. While that sounds
promising, the current form of globalization, neo-liberalism, free trade and open markets are
Free Trade, Globalism & Neo Liberalism 3
becoming more of a nuisance to the United States economy. The interests of wealthy
corporations and powerful nations are writing the terms of free trade. In a democratic country,
they are shaping and affecting the ability of elected officials to use their better judgment in the
interests of their people. Many legislators of this country are opposed to a balanced trade.
Balanced trade means a larger more active role for government and heading the country into a
new direction with new policies. Between Washington officials and media outlets, which are also
controlled by six of the world’s wealthiest corporations, the American public has been deprived
of any opposition to the course of free trade and globalism.
In fact the western mainstream media hardly provided much debate at all. Many of the
companies who were set to prosper from such an agreement lobbied at a great expense to see that
their way of being continued to exist especially among the public eye where neo-liberalism is
promoted as the mechanism for global trade and investment as a tool for all nations to prosper
and develop fairly and equitably. Margaret Thatcher’s TINA acronym suggested that “There Is
No Alternative” to this. And yet there is, countries such as China, Japan and some European
Union countries operate as protectionist nations and they all seem to have trade surpluses. Yet
opponents of protectionism claim that protectionist believes in a non-trade socialist government
controlled country.
The truth is a protectionist nation is one that uses the power of government to protect the
nation from any unfair, institutional foreign interference in the peaceful voluntary cooperation in
the division of labor of its citizens and establish taxes on foreign importation as a system of
providing a major source of revenue for the general operating expenses of the national
government. Foreign goods would receive tariffs so as to when bought the offset of the
difference between the American product and the foreign product will go to the government. In
Free Trade, Globalism & Neo Liberalism 4
essence giving the consumer control as to where the government supply of money comes from.
Some benefits of protectionism according to The American Protectionist Society of being a
protectionist nation include the elimination of income taxes which allows the consumer to
purchase more goods. In turn the consumer is paying more state and local sales tax to where the
States could afford to provide their own
This is to the detriment of most people in the world, while increasingly fewer people in
proportion are prospering.
Hershey is not the only one outsourcing jobs, and it’s not just the jobs that are at risk of
being outsourced. Companies like Microsoft have invested more money into research and
development in China then they have in America.
A) Free trade is a strain on the economy.
1) The more jobs outsourced the fewer workers there are to pay income taxes.
2) Government funding unemployment compensation for the loss of jobs
B) Outsourcing is necessary to keep the United States economy competitive.
1) Multinational companies force American companies to compete with cheap
national labor.
2) Companies such as Microsoft dump more money into research and
development in China then it does in America.
II) Free trade has disrupted the United States job market and future outlook.
A) Outsourcing has made many pessimistic as to the future stability of their career.
1) Corporate America recruits more labor from outside countries then it does in
the U.S.
2) Decrease in demand for degrees from MIT and other higher education schools
with the less then stable job market.
B) Outsourcing has improved the creation of high-valued jobs.
Free Trade, Globalism & Neo Liberalism 5
1) Bureau of Labor and statistics announced 7 out of the top 10 areas in job
growth will be in low to menial pay.
2) Wages are less then the work before.
“Things may be cheaper over the hill, but there is a cost to the community in buying over
there, instead of here,” this is what was said by Margaret House about trade. Was it possible she
was talking about the effect free trade and outsourcing would have on the economy? Since
legislation such as the North American Free Trade Agreement and the Security and Prosperity
Partnership of North America have passed through the executive branch companies have been
more willing to outsource jobs in search of higher profits at the expense of an increasing
unemployment rate and public deficit. In the chase of being competitive among a global market,
those elected to serve in the best interest of the public have not done so and until new policies are
sought and changes made, the working population of the United States will be in the wake of
corporate interest.
Instructions – Construct a persuasive research paper 2000 to 2500 words in length.
Title page
Introduction and thesis
Body with supporting evidence and in text citations
Effective visuals appropriately introduced
A conclusion
A refrence list with at least five to seven sources at least three of which must come from
the UOP Library
A completed peer review form