A couple of weeks ago I wrote in this space about the anti-free trade rhetoric we have heard recently coming from both the left and the right, suggesting that both sides are wrong and that free trade really is a win-win proposition for everyone.

The right attacks free trade because it creates competition for what appears to be its natural constituency: business. The left attacks free trade because it undermines its natural constituency: unions. But protectionist measures always hurt in the long run.

The left correctly argues that foreign competition undermines the power of unions. If unions force business owners to pay higher wages and/or employ more workers through work-rule negotiations, then foreign competitors who employ fewer workers or pay them less can sell products at lower prices. But if protectionist measures keep wages 10 percent higher, and prices are 20 percent higher as a result, then workers still come out behind.

Protectionist measures in one industry cascade on other industries. Protecting mine workers may save jobs, but it leads to higher ore prices. This makes the steel industry less competitive and cuts steelmaking jobs. If steelmakers are protected, automobile makers and other industries that use steel are impacted. If those industries are protected, then any industry that needs steel products is less competitive. Eventually all industries need protection and you wind up with a closed, stagnant economy with high prices and outdated technology.

As direct evidence of the value of free markets compare how open, free-market economies have performed compared to closed markets that claim to be worker-friendly. Tiny Hong Kong and Taiwan had 10 times the per capita income of China before it opened its markets. South Korea has 20 times the per capita income as North Korea. Chinese workers may have had guaranteed jobs before it opened up, but the cost was a dramatically lower standard of living and severe limitations on freedom.

The right also has a point in its argument against free trade: foreign competition hurts U.S. companies. But capitalism produces the highest quality products at the lowest prices, which results in the highest standard of living. When new entrepreneurial companies find better ways to make products more effective, higher quality or less expensive, established companies are forced to improve. Companies that do not or cannot improve die.

An open economy means that every job is at risk. It forces us to make sure our skills are maintained and that we continue to learn and improve. That may be painful, but it is part of the cost of doing business in a dynamic free market. You cannot have the benefit of the highest quality products at the lowest prices unless you also have the competitive mechanism that ensures the highest quality products at the lowest prices

People complain about the huge trade deficit. What they overlook is that the trade balance must balance. That is, the trade deficit is offset by a financial surplus. Foreign exporters must take what they are paid for their products and either buy U.S. products, which would result in a zero trade deficit, or invest in U.S. Treasury bonds or other U.S. investments and keep our interest rates lower than they would otherwise be. They are currently choosing the latter.

The negatives of open markets are visible and painful. Some workers are going to have to retrain for other jobs. Some U.S. companies will go out of business. These are sad realities in a free marketplace.

But the negatives are more than offset by the positives even though the positives are not as directly visible. Free markets result in lower prices, higher quality products and higher standards of living. That's what makes it such a win-win proposition.

No matter what the anti-free trade rhetoric suggests.