Free Trade. Free? Maybe Not. Good? Maybe Not.

Dave’s reacting to an article by Matt Yglesias (the link for which, unfortunately, doesn’t seem to be working) about free trade. Dave’s pointing out a few problems with free trade, and they’re good points. I’ve gone back and forth about free trade – if it can really be done better and cheaper elsewhere, maybe we should let that happen and move on to something we can do better ourselves. But how good is that for our society? Nations are nations because of borders. Not just physical borders, but boundaries that define many different aspects of a political or economic entity. Immigration laws are one type of boundary, an attempt to define a nation in terms of citizenship and residency. The legal system is another such boundary, borders defined in law that establish a set of behaviors that must occur within the physical borders of a nation. Trade laws and regulations are another such boundary. In a sense, these are part of the legal system, but in a larger sense, they represent economic borders, an abstract geography within which business is transacted according to certain rules. Free trade is then equivalent to an open immigration policy, where you are handing over a portion of your sovereignty to another political entity. I have to note here that free trade as I’m using the term may not be, and probably isn’t, as unfettered a concept as that actually envisioned by free trade advocates. But in moving towards free trade, as we did with NAFTA, we give up a degree of control over our economy. I’m not saying that is necessarily a bad thing, but it is something to be considered alongside the computation of profits and losses and jobs and tariffs. If South Transylvania is producing most of the wokkawidgets we use, replacing our own wokkawidget manufacturers, then we’ve abrogated any say on whether environmental standards related to wokkawidget manufacturing are followed. If we don’t want iron ore from Yakkabokkastan used in wokkawidget manufacturing, because the Yakkabokkastan is ruled by a non-benevolent despot who puts moldy rice in his subject’s oatmeal, we don’t really have any control over whether South Transylvania uses Yakkabokka iron ore, unless we have some sort of punitive response in place regarding imports, which, of course, wouldn’t be free trade. So free trade isn’t really free. It just doesn’t always have a calculable cost.

One thought on “Free Trade. Free? Maybe Not. Good? Maybe Not.

  1. Wow! Such a thoughtful, serious topic, I almost hate to interrupt with the piddly dribble I came by to mention. But I just wanted you to know that you are one of my 10 Lords A-Leaping on my 12 Days of Christmas Tree. I hope that you and yours have a splendid day AND holiday. And that you resolve this pesky Free Trade issue. For the record? I’m with you…

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