EDITORrnThomas FlemingrnSENIOR EDITOR, BOOKSrnChilton Williamson, ]r.rnMANAGING EDITORrnScott p. RichertrnART DIRECTORrnH. Ward SterettrnDESIGNERrnMelanie AndersonrnCONTRIBUTING EDITORSrnKatherine Dalton, Samuel Francis,rnGeorge Carrett, Paul Gottfried,rnJ.O. Tate, Michael Washburn,rnClyde WilsonrnCORRESPONDING EDITORSrnBill Kauffman, Donald Livingston,rnWilliam Mills, William Murchison,rnAndrei Navrozov, Jacob NeusnerrnFOREIGN AFFAIRS EDITORrnSrdja TrifkovicrnLEGAL AFFAIRS EDITORrnStephen B. PresserrnRELIGION EDITORrnHarold O.]. BrownrnEDITORIAL SECRETARYrnLeann DobbsrnPUBLISHERrnThe Rockford InstituternPUBLICATION DIRECTORrnGuy C. ReffettrnCIRCULATION MANAGERrnCindy LinkrnA publication of The Rockford Institute.rnEditorial and AcUertising Offices:rn928 North Main Street, Rockford, IE 6110?.rnEditorial Phone: (815)964-5054.rn/d’ertising Phone: (815) 964-5815.rnSubscription Department: P.O. Box 800,rnMount Morris, IL 61054. Call 1-800-877-5459.rnU.S..^. Newsstand Distribution b)’ Eastern NewsrnDistributors, Inc., One Media \4iv, 12406 Rt. 250rn.Vlilan, Ohio 44848-9705rnCopyright © 2000 b; The Rockford InsHtiite.rnMl rights resen’ed.rnChronicles (ISSN 0887-57? 1) is publishedrnnionthlv for $39.00 (foreign subscriptions add $12rnfor surface de!i’en’, $48 for .ir Mai!) per vear byrnThe Rockford Institute, 928 North Main Street,’rnRockford. IL 61103-7061. Preferred periodicalrnpostage paid at Rockford, IL and addihonal mailingrnoffices. POSTMASTER: Send addressrnchanges to Chronicles, P.O. Box 800,rnMount Morris, IL 61054.rnThe ievs expressed in Chronicles are thernauthors’ alone and do not necessaril)- reflectrnthe views of The Rockford Inshtute or of itsrndirectors. Unsolicited manuscripts cannot bernreturned unless accompanied bv a self-addressedrnstamped emelope.rnChroniclesrnVol.24, No, 2 I’cbrium’2000rnPriiik’d in iht United Slates of AmericarnPOLEMICS & EXCHANGESrnOn NAFTA and DetroitrnIn “Downsizing Detroit: Motown’s Lament”rn{Views, November), Greg Kazarnprovides an insight into the bleak futurernfor unskilled workers in one Americanrncity. Unskilled workers in many otherrnAmerican cities face that same future.rnThe problems of the inner city, however,rncan only be worsened by restricting tradernor by creating government-sponsoredrn”Renaissance Zones.”rnRather than being caused by freerntrade, Detroit’s problems were actuallyrnthe result of tariffs and quotas. The BigrnThree automakers churned out increasinglyrninferior products during the 1970’srnand early 80’s while enjoying a protectedrnmarket. Consumers became fed up andrnsearched for quality, finding it inrnJapanese and European imports. With arnrelaxation in import duties came competitionrnthat Detroit was not used to facing.rnThe Big Three had to shape up or losernthe market. Today, American companiesrnare again building qualit)’ cars. Canrnanyone doubt that the revitalization ofrnthe industry is a result of competitionrnfrom abroad? There is no better incentivernthan the potential loss of a substantialrnmarket share.rnStill, those who have been displaced inrnthis process present a ver}’ real problem.rnBut the key to improving their situation isrnto allow markets to work rather than creatingrnwelfare disincentives to relocate orrnretrain. “Renaissance Zones” or “enterprisernzones” at best redistribute incomernfrom one set of individuals, the taxpayers,rnto another set of individuals, the politicallyrnconnected, while government takes arnhefty broker’s fee. The only people whornare “empowered” are government employeesrnwho hand out favors at public expensernwhile patting themselves on thernback for “solving” inner-city problems.rnUnskilled workers face a bleak futurernin the inner cit)’ because of a lack of sufficientrncapital investment due to oppressivernlocal government taxes and regulations.rnLook around any metropolitanrnarea, and you will see government agenciesrnsprout up virtually overnight. Therernis a local regulator}’ board for practicallyrnevery activit)- under the sun. The governmentrncrowds out private investment, andrnthat which isn’t crowded out is often regulatedrnout of existence. Through theirrnmicro-management of the local economy,rnthese local NAFTA-like agenciesrnstifle the economic life of every Americanrncit}’. Since the unskilled are usuallyrnthe last hired and the first fired, they feelrnthe brunt of it.rn”Motown’s Lament” is heard by unskilledrnworkers across America. Theirrneconomic future will brighten only whenrnthe welfare-regulatory schemes of governmentrnare dismantied and private capitalrnformation and trade are allowed tornflourish.rn—Dan WinterrowdrnPilot Hill, CArnMr. Kaza Replies:rnMr. Winterrowd stood for Congress inrnCalifornia in 1998 on the LibertarianrnPart}’ ticket. Libertarians are skeptical ofrntax-free “enterprise” or “Renaissance”rnzones. But interestingly, their platformrnadvocates “complete and unilateral withdrawalrnfrom all international trade agreementsrnincluding the General Agreementrnon Trade and Tariffs (GATT) and thernNorth American Free Trade Agreementrn(NAFTA).” They also oppose right-toworkrnlaws.rnThe Libertarians propose radical economicrnderegulation, including abolitionrnof all licensing and zoning laws and repealrnof the minimum wage to create capitalrninvestment and job growth in depressedrnurban areas. Good luck, Mr.rnWinterrowd, getting such a programrnthrough a legislative body. Mr. Winterrowdrnreceived three percent of the vote inrnhis congressional bid. Real-world politicsrnis the art of the possible.rnThe Libertarian argument, applied tornDetroit’s automobile industry, is generallyrnmore sophisticated than the one presentedrnhere by Mr. Winterrowd. ThernLibertarians contend that the Japanesernessentially received a cross-subsidy, courtesyrnof the U.S. taxpayer, in the post-rnWorld War II era. The U.S. governmentrndefended Japan, placing it under its nuclearrnumbrella, while spending up to sixrnpercent of our Gross National Productrnon national defense. By contrast, thernJapanese spent a mere one percent on defense,rnwhich allowed them to invest capitalrnat a higher rate into domestic industriesrnsuch as auto and steel. Bv the latern4/CHRONiCLESrnrnrn