What is particularly interesting, though not surprising, is that Filipino, Indian and Malaysian unit labour costs exceeded the US level. Economic analysis makes it clear that Asian labour is not so 'cheap' after all. It should now be abundantly clear, even to ignorant anti- market ideologues like Barker, that it is ludicrous to blame free trade for rising social expenditure. It should be equally clear that free trade does not lower real wages or raise the level of unemployment. Nevertheless, it would be grossly misleading to suggest that free trade does not involve transitional costs.
People do lose their jobs, firms do close down and some capital is lost.
But it must be stressed that this happens all the time in every dynamic economy. New technologies, more efficient production techniques, etc., involve the same costs. Barker picks up the Rodrik theme that free trade weakens social safety nets because the increasing mobility of capital is reducing the tax base. This is just plain wrong. If the tax base in rich countries is shrinking then so is their economies, meaning their living standards must also be falling.