Opinion

INS trumps ECO in explaining free trade

Why is it that people use basic concepts of microeconomics to counter “vague notions?” How completely ironic is that?

When I was a freshman, I used to talk to business majors on my hall about the Free Trade Area of the Americas summit, and they were always very condescending – they’d say things like “I can’t have this discussion with you, you don’t understand – and you won’t until you take Economics 211 and 212.” As if basic supply and demand and trade were too esoteric to be able to explain. I went into microeconomics already having learned about “free” trade (and neoliberalism, and Statutory Accounting Principles, etc.). I already understood that people don’t usually do what’s in everyone’s best interests: graphs never trump self-interest, and power is a huge factor in economic relationships – and I had major trouble getting past my doubts/realism.

It’s possible that my doubts stem from things my teacher said, such as, “Land, or natural resources, are those resources we obtain by the grace of God” or “Marginal, fixed, and variable costs, or as I like to call them, The Trinity.” I swear I am not making this up.

I will always remember my textbook’s justification of “free trade” – a dialogue between a farmer and a rancher. It included gem quotes such as “farmer, my friend, have I got a deal for you!” and “I don’t know.that sounds too good to be true,” then “Oh, but it is! Here – I’ve summarized my proposal for you in a simple table.”

Hopefully I’m not breaking the honor code at all here, but let me let all of you microeconomics students in on a little secret. About 90 percent of the time when they ask you for a graph, what you do is you draw an ‘X’ on a graph. Label one line “supply” and label the other one “demand.” Put “price” on the x-axis, then “amount” or whatever on the y-axis – and if there is government involvement, just scrawl, “Oh God, not that!” across the whole graph. You’re set – that’s pretty much the point.

Anyway, I’ve finally found a division of economics that makes sense: International Political Economy. It takes into account, for instance, how relationships of power affect economic decisions – while one point on the graph may be better for both parties, if I’m more powerful than you and we’re making a deal (such as free trade agreements), you’re going to agree to my terms (no subsidies except for agriculture subsidies – which is the only market third world countries would have an advantage in anyway). Or on a smaller scale, it explains why UNICCO employees signed waivers they didn’t understand. It also explains why collective bargaining is so important – it helps equalize relationships of power in the workplace, so that employees have the leverage to get fair compensation and decent working conditions.

So all of you who have taken ECO 211 and/or 212 and think you therefore have all the answers, and that we “progressives” are so naive for thinking that people’s lives shouldn’t be determined by two-dimensional economic oversimplifications: take International Political Economy (INS 537) and get back to me.

Bethany Quinn is a senior majoring in Latin American Studies and Photography. She may be contacted at b.quinn2@umiami.edu.

September 12, 2006

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