re: How Free Trade Took Down the American Middle Class

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Too many people have yet to grasp the full implications of that, even in the twenty-first century. If the goods and services available to the American people are greater as a result of international trade, then Americans are wealthier, not poorer, regardless of whether there is a “deficit” or “surplus” in the international balance of trade.

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– Thomas Sowell, 2015. Basic Economics, 5th Edition, p. 476-477




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He asked the group a simple question: If China and India become wealthier, is that a threat to America? The general consensus seemed to be yes, illustrating how zero-sum thinking is endemic to this discussion. Adam Smith eloquently wrote about this in 1776 in his seminal book, The Wealth of Nations:

Each nation has been made to look with an invidious eye upon the prosperity of all the nations with which it trades, and to consider their gain as its own loss. Commerce, which ought naturally to be, among nations, as among individuals, a bond of union and friendship, has become the most fertile source of discord and animosity.

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Being a creditor or debtor nation simply has no correlation with a country’s standard of living. Thomas Sowell exposes this fallacious concept in Basic Economics:

In general, international deficits and surpluses have had virtually no correlation with the performance of most nations’ economies. Germany and France have had international trade surpluses while their unemployment rates were in double digits. Japan’s postwar rise to economic prominence on the world stage included years when it ran deficits, as well as years when it ran surpluses. The United States was the biggest debtor nation in the world during its rise to industrial supremacy, became a creditor as a result of lending money to its European allies during the First World War, and has been both a debtor and a creditor at various times since. Through it all, the American standard of living has remained the highest in the world, unaffected by whether it was a creditor or a debtor nation.

No one revealed the specious reasoning behind balance-of-trade concerns better than the French economist, statesman, and author Frédéric Bastiat (1801–1850), whom the Austrian economist Joseph Schumpeter said was “the most brilliant economic journalist who ever lived.”

Bastiat used entertaining fables and carried the logic of the proponents of protectionism to their logical extreme, with biting wit. One of his most famous essays, “Petition of the Candlemakers,” was a parody letter from the manufacturers of “candles, tapers, lanterns … and generally of everything connected with lighting,” arguing against the unfair competition—since since its price was zero—of the sun.

Bastiat understood that exports were merely the price we pay for imports, and having to work harder to pay for those imports did not lead to wealth. Using impeccable logic, Bastiat wondered if exports are good and imports are bad, would the best outcome be for the ships carrying goods between countries to sink at sea, hence creating exports with no imports?

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The gains from trade are what we import, not export. The purpose of production, in the final analysis, is consumption. The more imports we can acquire for fewer exports, the wealthier we are, either as individuals or as a country.

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Again, not my argument. This is basic Friedman/Sowell stuff. I'm just an adherent to the 2 greatest American economists in history

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You did and everybody can see it. You made the claim that tariffs is marxism.

A yes or no answer is all that is needed from you. Are tariffs marxism or not?

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How do you define Marxism, specifically with respect to economics and governmental policy?

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How do you define Marxism, specifically with respect to economics and governmental policy?

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And once again, you refuse to answer. It's ok though. Everybody can trace back our conversation and see clearly where you stated tariffs=marxism.

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And once again, you refuse to answer. I

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I already did answer. You're the one who is avoiding it.

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Everybody can trace back our conversation and see clearly where you stated tariffs=marxism.

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You're dishonestly leaving out an important aspect, as I've already told you.

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Didn't leave a damn thing out. Here is your quote in it's entirety:

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The quote shows what you left out.

Now stop stalling and answer the question.

If the only aspect we looked at was the Chinese government suppressing/subsidizing wages then that would make your argument meaningful. However, when looking at the whole of the problem it is just a part of the bad business relationship that hurts the middle class Americans. Business leaders move capital and jobs out of the US for much reduced labor costs. Lower and middle class Americans make less money, some people say they are getting $10 shirts and should be happy, but things of real value like homes are not accessible due to increased prices and their lower earnings.

You still have not answered my question, are you a paid influencer posting on the rant?

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Business leaders move capital and jobs out of the US for much reduced labor costs.

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Correct, and we benefit.

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Lower and middle class Americans make less money,

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Some do, but largely due to failure to adapt to a modernizing economy.

You're making a sweeping generalization that isn't necessarily true in the aggregate, and a good portion of those "making less money" do so out of their failure to adapt.

As has been shown ITT, there are still tons of opportunities nationwide for these people in trades. They just refuse the jobs (or are disqualified due to prior bad decision-making).

And, even with this, the standard of living of these people still rises.

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but things of real value like homes are not accessible due to increased prices and their lower earnings.

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Homes aren't affordable for a combination of factors that have little to do with this discussion. The 2 main variables are (1) larger, fancier homes (in more exclusive areas) and (2) governmental policy (specifically the ones that led to the 2008 crash and, more importantly, the response to the crash, which intentionally inflated the market with a decade of printing)

Most everything else, including goods that would be absolute luxuries in the 70s, is cheaper. I will admit I've never looked at cars, but, again, that's largely due to government (cash for clunkers, printing, interest rates being artificially low, safety standards, fuel standards/EV regs, etc.) and not the market itself.

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are you a paid influencer posting on the rant?

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No. I've been posting my love of the free market since fall 2005.

A Warning to Traditional Conservative Free Traders

You’ve long championed free trade as the bedrock of prosperity—open markets, global efficiency, and the belief that competition lifts all boats. It’s a principle rooted in Reagan’s legacy and the conservative canon: government steps back, and the private sector thrives. But here’s the hard truth: clinging to that dogma today, especially by obstructing MAGA-driven trade reforms, risks not just the middle class you claim to defend—it could boomerang and hit you square in the chest. The erosion you’re enabling isn’t hypothetical; it’s happening now, and it’s lighting a fuse that could blow up into radical government actions from the right or left. Either way, you won’t like the fallout.

The Middle-Class Collapse You’re Ignoring

The middle class isn’t just shrinking—it’s being gutted. Decades of free trade have shipped jobs overseas—manufacturing employment dropped from 17 million in 1990 to 13 million in 2023 (BLS)—while China’s GDP ballooned from $1.2 trillion in 2000 to $18 trillion (World Bank). You said trade would make us richer, but the wealth’s pooling at the top: the 1% now own more than the entire middle class combined (Federal Reserve, 2023). Median income’s stuck—$74,600 in 2022, barely up from 1999—and housing’s a pipe dream, with homes at $434,000 (NAR, 2024) and rents eating 40% of wages in cities. Sixty percent of renters say they’ll never own (Redfin, 2023). This isn’t “creative destruction”—it’s a slow chokehold on the people who keep this country running.

Blocking Trade Reform Stokes the Fire

MAGA’s trade push—tariffs, reshoring, hitting China hard—aims to reverse that. You call it protectionism, a betrayal of free-market purity. Fair enough; it’s messy, it’s not textbook Hayek. But obstructing it—doubling down on NAFTA-style deals or WTO kowtowing—only deepens the wound. Every factory that stays in Shenzhen, every dollar funneled to corporatists via your “open borders” trade, squeezes the middle class harder. They’re not buying your trickle-down promises anymore—61% live paycheck to paycheck (LendingClub, 2023). They’re angry, and they’re voting.

Radicalization’s Already Here—And It’s Coming for You

That anger’s radicalizing politics, and it’s not subtle. On the right, Trump’s 2025 moves—slashing the Department of Education, DOGE gutting federal staff without Congress, threatening NATO—aren’t just stunts; they’re what a desperate middle class cheers when they feel betrayed. Your base, once reliable free traders, now talks nationalizing defense contractors over cost-plus scams like the $300 million 6th-gen fighter. On the left, wealth taxes (70% on $10 million-plus, per AOC) poll at 60% (YouGov, 2023), and rent caps are gaining steam. Both sides flirt with ignoring courts if rulings block them—January 6 was a preview. This isn’t fringe; it’s the middle class demanding a lifeline.

How It Hits You

Keep blocking trade reform, and that radical wave crashes on you. From the right, a MAGA government could seize your corporate allies’ profits—think forced reshoring mandates or equity stakes in Lockheed for “national interest.” Your deregulated utopia gets swapped for state-driven industrial policy. From the left, it’s worse: wealth taxes claw your donor class, antitrust guts your megacorp buddies, and bureaucrats you hate swarm back with a vengeance. Either way, your influence shrinks—voters ditch you for populists who promise jobs over ideology. The middle class you let erode won’t care about your principles when they’re choosing between crime-riddled rentals and the streets.

Wake Up or Pay Up

You can’t free-trade your way out of this. The middle class is the backbone—70% of GDP comes from their spending. Let it collapse further, and the system you’ve thrived in buckles. Radical action isn’t a maybe; it’s a when. Trump’s DOE shutdown order (March 20, 2025) is a taste—half the staff’s already gone, and Congress might not stop the rest. The left’s itching to nationalize or redistribute. You’re not just risking their future—you’re gambling yours. Pivot now, back trade that rebuilds the middle, or watch the government you dread—right or left—steamroll you with the mandate of a fed-up nation.

Thanks for answering my question about being a paid influencer.

It is odd that you criticize me for making a sweeping generalization and then say the middle class Americans that are making less money,…”do so out of their failure to adapt.” Do you even think about applying your own criticisms to your arguments?

I will say that I also support free markets and believe they supply the best result for people involved. However, the relationship between the US and China is not a free market with fair trade, it has been perverted and “regulated “ to transfer wealth and value from middle class Americans to China and unscrupulous business leaders and investors.