The Myth of Free Trade: A Plan for America's Economic Revival [Hardcover]

Ravi Batra (Author)

Book Description

Publication Date: April 1993

The author of The Great Depression of 1990 argues that America's failure to keep an eye on its competitors and limit foreign imports has spelled disaster and he sets out a five-year plan for recovery.

Editorial Reviews

From Publishers Weekly

Batra ( The Great Depression of 1990 ) surveys America's economy in this impressive study filled with illuminating statistics. Declaring himself "privy to knowledge and information crucial to the economic survival of our nation as well as our planet," Batra, professor of economics at Southern Methodist University in Texas, here repudiates free trade: "Manufacturing, not trade, is the main source of prosperity." Batra's analysis of federal deficits, deindustrialization and our living standard is piercing. He supports "competitive protectionism," specifically higher tariffs, an industrial policy, banning mergers among giant firms and breaking up "large firms controlling more than 10 percent of market share in any industry." While compelling, Batra does not present a convincing argument that a protectionist America can survive in a world committed to free trade. Fortune Book Club alternate.
Copyright 1993 Reed Business Information, Inc.

From Library Journal

Economist Batra here launches a full-frontal attack on four decades of U.S. trade liberalization. The author's previous jeremiads ( The Great Depression of 1990 , LJ 6/15/87; Surviving the Great Depression of 1990 , LJ 3/15/89) struck a chord with the general reading public and forecast much of the 1990-91 recession. In this book, he describes manufacturing, not services, as historically the source of a society's prosperity and social cohesiveness. Our shift to a service-based economy, encouraged by low tariffs on imported manufactures, has driven down most workers' earnings and increased social inequality. The author fondly recalls America's periods of high tariffs, which coincided with rapid economic development, neglecting the international strife that accompanied it. He calls for "competitive protectionism" to foster domestic competition and rekindle U.S. innovation. The general public will find his manifesto thought-provoking, though not convincing. Recommended for general collections.
- Michael Stevenson, Harvard Business Sch. Lib.
Copyright 1993 Reed Business Information, Inc.

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Product Details

• Hardcover: 288 pages
• Publisher: Scribner (April 1993)
• Language: English
• ISBN-10: 0684195925
• ISBN-13: 978-0684195926
• Product Dimensions: 9.2 x 6.3 x 1.3 inches
• Shipping Weight: 1 pounds
• Average Customer Review: 5.0 out of 5 stars  See all reviews (2 customer reviews)
• Amazon Best Sellers Rank: #2,897,313 in Books (See Top 100 in Books)

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3 of 3 people found the following review helpful:

5.0 out of 5 stars Lessons in Economic History, September 8, 2006

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Acute Observer (N. Jersey Shore) - See all my reviews

This review is from: The Myth of Free Trade: A Plan for America's Economic Revival (Hardcover)

The Myth of Free Trade, by Ravi Batra

The 'Introduction' explains the effects of "free trade" policies on falling real wages, lost jobs, and environmental destruction (p.3). Prosperity comes from manufacturing, not services of agriculture. Both Democrats and Republicans have stood idly by, Trade liberalization has enriched the American elite and impoverished most Americans by falling real wages. This can be reversed by higher tariffs (protectionism) but only if businesses are forced to compete via anti-trust laws (p.5). Wages, productivity, and real incomes would increase, and deficits and energy prices would drop when tariff rates are increased. This would reverse the economic decline since 1973.

Ten reasons are given to explain falling productivity (pp.12-15). Batra says they are incorrect and misleading. Economic statistics are extremely misleading when inequality is growing (p.23). Real wages show the true picture (pp.24-25). Page 30 shows this impoverishment. Poverty, both absolute and relative, has increased since 1973 (p.31); its a "silent depression" (p.34). The corporate media lies about the real facts. Chapter 3 links the low tariffs of "free trade" to the poor economy that followed. Productivity rose and real wages fell (p.47) because of the break in the links (p.51). This is explained on pages 56-57. Huge government subsidies to agriculture caused falling farm earnings (p.63). Falling industrial prices since 1973 ended millions of manufacturing jobs (p.67). This is by design, not accident (p.71). De-industrialization is explained on pages 72-73. Free trade alone caused slower productivity and reduced real earnings (p.84). The enormous domestic competition in Japan resulted in superb goods at low prices. Taiwan's domestic rivalry created prosperity (p.111). Monopolies hinder economic development (p.122). Australia's real earnings stagnated after tariffs were cut (p.125).

Chapter 7 is a history of tariffs in America. The Embargo Act of 1807 created domestic manufacturing (p.131). This new class of manufacturers was opposed by shipping interests and Southern planters. High tariffs before the Civil War produced more industrial output, declining consumer prices, and great technical innovation (p.133). Later this created "the preeminent economic power in the world" (p.135). The multitude of small businesses competed (p.137). But the economic recessions and depressions resulted in fewer and larger firms. The lower tariffs of "free trade" was to allow corporations greater access to foreign markets.

Chapter 8 discusses the bias towards "free trade". The charts on pages 151-152 show a relationship of unemployment rates to the tariffs (a fall then a rise). "Free trade" works to make the wealthy richer but most people poorer. Frequent mergers and acquisitions enabled some companies to a captive domestic market. Domestic competition doesn't harm workers like foreign competition (p.167). Chapter 10 summarizes the preceding chapters. Batra predicted that NAFTA would create unemployment in Mexico (p.190) and lower wages in America (p.191). He urges "Competitive Protectionism" to turn the economy around. Large firms must be broken up (p.193). Raise tariffs to 40 per cent (p.196). Defense spending should be cut drastically to reduce the deficit (p.209). Batra says international trade creates worldwide pollution (Chapter 11). Chapter 12 sums up his ideas for prosperity. Domestic monopolies generate inequality and poverty; global trade damages the industrial base and the environment (p.233). The growth of manufacturing brings prosperity to agrarian societies. Then manufacturing declines and services increase - the second stage of industrialization (p.237). But the third stage is decadence due to a decline in manufacturing (p.238). The fourth and final stage is the elimination of the middle class. Only drastic social and economic reforms can end this stagnation (p.239).
The rest of the book summarizes the specifics (pp.241-245). Global Trade causes Global Warming (pp.246-248).

5.0 out of 5 stars Better Perspectives, September 19, 2010

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Seriousconsideration - See all my reviews

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This review is from: The Myth of Free Trade: A Plan for America's Economic Revival (Hardcover)

When I first read Batra's writing back in the late 70's I didn't want to believe what I was reading and therfore decided he was was using scare tactics to sell books. As the years have passed and all of his studies have proved what he said was going to happen have happened, I have gone back and re-read his writings and ordered several other books he has penned. I am amazed. He makes economics not only interesting but explains how we have arrived where we are to day. He also shows where we will be in the future. He gives solutions to our current economic challenges. I wish every U.S. citizen would read his writing to get a better understanding of the impact of free trade, NAFTA, and current taxation and how it effects our country now and in the future.