People Can Just Get Along
What do various proposals to regulate trade all have in common? They are all attempts to prevent people from cooperating with each other. The critics of recent developments in international trade relations, though they have couched their arguments in sophisticated economic rhetoric, are ultimately relying on the tribe mentality: It's us versus them, and anything that they are for must be bad for us. [Full Article]
Comments (13)
rtr
This is the ultimate winning irrefutable libertarian economic argument. For it shows every instance of intervention, of preventing voluntary wealth increasing trade, necessarily makes the individuals of society worse off, poorer. Violent agressive coercive action must always be employed to prevent free trade.
The point must be hammered home in every possible instance. Following its logical conclusions leads to the elimination (at least the minimization) of the State, and the maximization of peaceful cooperation beyond all imaginary borders. When it becomes intellectually *embarassing* for the statist policy elites to argue their flawed arguments against free trade, the tide will turn and a flood of wealth increasing peaceful cooperation will multiply the wealth of the earth many fold.
Published: December 6, 2004 9:21 AM
Michael A. Clem
I especially like this article because it's based on such a simple idea, not complicated economics: what's wrong with letting people engage in voluntary trade? Nothing's wrong with it, that's what!
Published: December 6, 2004 1:39 PM
John Dunbar
I particularly liked the discussion regarding Paul Craig Roberts and his criticisms against free trade. The author pointed out that Roberts' criticisms of free trade was in effect debating economics by jumping over and using dire political consequences -- rather than analyzing the great economic benefit to each country's consumers from free trade.
The author of this article, Robert Murphy did a great job of showing by way of a simple example that Roberts thinking was flawed.
John Dunbar
Published: December 6, 2004 2:02 PM
Dennis
"of letting people freely choose which products to buy, where to live, and where to invest their capital"
The one flaw I see in the argument: I can't freely choose to move to most other countries, if I want to get a job there. Getting a work permit isn't that easy. Take government interference out of the equation entirely, that's one thing...but implement free trade without free immigration, and we have free trade in every commodity except the one I have to sell - my own labor. This puts me at a substantial disadvantage, caused by government.
Published: December 6, 2004 3:35 PM
Sam
As a economist, I fondly acknowledge the author's long term views. However, we must not forget that long term views are much less complicated than the short term methods of getting there with as few bumps in the road as possible. A smooth transition is by no means a sure thing. In fact, there will be countries that think they specialize in many things but do not. In these cases, the social factors must be considered, which is not addressed in this economic theory. Slowing the process of transition through tax incentives and other suplementary instruments may be able to create a more smooth transition into a world economy. It may be beneficial to ease into it rather than jumping in. We may not like what we see when we get there...
Published: December 6, 2004 4:47 PM
Sam
As a economist, I fondly acknowledge the author's long term views. However, we must not forget that long term views are much less complicated than the short term methods of getting there with as few bumps in the road as possible. A smooth transition is by no means a sure thing. In fact, there will be countries that think they specialize in many things but do not. In these cases, the social factors must be considered, which are not addressed in this economic theory. Slowing the process of transition through tax incentives and other suplementary instruments may be able to create a more smooth transition into a world economy. It may be beneficial to ease into it rather than jumping in. We may not like what we see when we get there...
Published: December 6, 2004 4:48 PM
Ken Gregg
There is a good point here, that cooperation is the bedrock underlying market principles, and is one that cannot be overemphasized.
From whence comes cooperation? Where do we learn to cooperate in the first place? From the grand tradition of family life. A dysfunctional family more often leads to a difficulty in understanding how to cooperate with others.
My day job for over a dozen years has been mediation in domestic relations--custody, visitation, property separation, child support, etc. It's been my experience that where the spouses (and the kids, for that matter) are unable to cooperate, it is that they just don't know how.
Usually, by the time that I see the couples, it's too late to heal the relationships. I often help them to learn how to cooperate on the basics in the splitting-up process and, hopefully, keep the decision-making process in their hands, rather than that of a judge or politician. This kind of empowerment is the best aspect of mediation. And, it doesn't particularly matter what their decision is, just that they have made it for themselves and can move on with life--in their own control.
All too often people just don't understand how cooperation works, and that's how the family comes apart.
Alternatively, families that stay together, cooperate with each other on many levels of their respective relationships. They learn shared goals, means of addressing problems, and listening to each other.
When these powerful tools move from the cradle of the family to those around the community, and to the marketplace of life, the opportunities for mutual benefits come to all within their society.
Just a thought.
Just Ken
kgregglv@cox.net
http://classicalliberalism.blogspot.com/
Published: December 6, 2004 11:35 PM
Ken Gregg
There is a good point here, that cooperation is the bedrock underlying market principles, and is one that cannot be overemphasized.
From whence comes cooperation? Where do we learn to cooperate in the first place? From the grand tradition of family life. A dysfunctional family more often leads to a difficulty in understanding how to cooperate with others.
My day job for over a dozen years has been mediation in domestic relations--custody, visitation, property separation, child support, etc. It's been my experience that where the spouses (and the kids, for that matter) are unable to cooperate, it is that they just don't know how.
Usually, by the time that I see the couples, it's too late to heal the relationships. I often help them to learn how to cooperate on the basics in the splitting-up process and, hopefully, keep the decision-making process in their hands, rather than that of a judge or politician. This kind of empowerment is the best aspect of mediation. And, it doesn't particularly matter what their decision is, just that they have made it for themselves and can move on with life--in their own control.
All too often people just don't understand how cooperation works, and that's how the family comes apart.
Alternatively, families that stay together, cooperate with each other on many levels of their respective relationships. They learn shared goals, means of addressing problems, and listening to each other.
When these powerful tools move from the cradle of the family to those around the community, and to the marketplace of life, the opportunities for mutual benefits come to all within their society.
Just a thought.
Just Ken
kgregglv@cox.net
http://classicalliberalism.blogspot.com/
Published: December 6, 2004 11:35 PM
John Pardon
Unfortunately, Robert Murphy does not recognise the essential truth that there is no long-term social and economic benefit accruing to members of the American middle class from "free trade". He fails to grasp that the loss of industrial, manufacturing and "knowledge age" jobs is not recompensed by a growth of jobs at Wal-Mart or an increased concentration of wealth among the top-most tier of the super-rich.
While some believe that the world should be ordered on principles of market efficiency alone, there are far more who believe that a broad national or public interest is paramount. Robert Murphy seems believe utterly in the market efficiency paradigm. Thankfully, Paul Craig Roberts believes that the American nation-state exists for reasons beyond market efficiency. Roberts and many others believe that the gain of middle-class jobs in Asia at the expense of middle-class jobs in the U.S. is cause for alarm.
The massive offshore outsourcing and wide use of imported low-wage but high-skilled foreign guest workers (H-1b and L-1 non-immigrant visa workers) has not improved the lives of most members of the American middle class. That's why opinion polls show a majority of Americans oppose outsourcing. Indeed, as Paul Craig Roberts repeatedly notes, the only real job creation underway in the U.S. is in the areas of non-tradeable services -- something which makes no dent in the massive U.S. trade deficit. The ultimate failure of current "free trade" policy for Americans is evinced by the flight of knowledge age jobs offshore and the widening employment of non-immigrant visa workers in the U.S.
Quite bluntly, free trade has become little more than a euphemism for global labor arbitrage. Attempting to claim that there is no problem and attacking articulate critics such as Dr. Roberts is not compelling. Widening middle class job losses in 2005 and the continuing failure to create new middle class jobs for Americans will more sharply underscore the gravity of this situation.
Published: December 7, 2004 2:58 PM
SStone
Judging from the posting date, Mr. Murphy is getting ahead of himself.
Published: December 7, 2004 4:59 PM
rtr
Unfortunately, John Pardon does not recognize the essential truth that there is no long-term social and economic benefit accruing to members of the American middle class from “consensual sex�. The opposite of consensual sex is called rape but when it comes to freely trading one’s property and labor it’s called a “national or public interest�?
Not only is it a blatant falsehood to maintain that the American middle class does not benefit from free trade but it is a deliberate obfuscation to claim that free trade is a principle of “mere� market efficiency. There is either a state of free market exchange or there is a state of warfare to the degree that free trade is necessarily violently and coercively prohibited by theft force. The viewpoint of the economics of barbarism advocated by the likes of Paul Craig Roberts also necessarily maintain that individuals in Asia are less human than individuals in the U.S., that not only is it right and proper to pursue policy that intentionally makes Asian individuals materially poorer in pursuit of the facade that it benefits a specific aggregation of individuals artificially labeled “middle class� in the U.S. but it actually does in the long run make all much materially worse off than they would otherwise be with no restrictions on trade.
In order to prevent the free trade from occurring that would occur it is absolutely necessary for the likes of Pardon to murder or imprison or threaten with murder or imprisonment (if they refuse to “pay tariffs� and attempt to prevent the violent seizure of their property by the government) those individuals who attempt to freely associate and trade their own property with other individuals.
Would an opinion poll showing that the majority of Americans favor making U.S. models sex slaves matter? It is the ultimate failure of socialist intervention policy and it’s prohibitive anti-free trade taxation and tariffization that is also as important a factor of the flight of knowledge age jobs and the widening employment of non-immigrant visa workers in the U.S. Employment is readily available for all who are capable and willing to work as human wants are not close to being fully satisfied and it is only the forceful theft intervention of specific individuals calling themselves “the government� that prevents it.
Dr. Roberts may be an articulate critic but his economic theory is flat out wrong, akin to the critics that maintained the earth was flat or the sun revolved around the earth. He must incorrectly necessarily deny the fundamental economic truth that all trade increases the subjective wealth of all parties to the trade. Arguing that a specific aggregation of individuals should have a piece of the wealth of others (“the top -most tier of the super rich� or whomever) is not an argument against free trade but an argument for socialist redistribution of wealth. Let’s not pretend or deliberately lie, confusing the public’s opinions in polls due to misguided economic theory, that arguments against free trade are anything more than a subterfuge for socialist redistribution. The real argument Roberts and the like are making is that the “middle class� is entitled to a percentage of the wealth created or owned by the “top tier class�. The “top tier class� must be forced by government to pay a higher wage than the market wage. It’s the same old stale disproved socialist argument desperately cloaked in the terminology of “poll winning“ “outsourcing� "flight of knowledge age jobs", etc.
Two individuals freely trade with each other to have consensual sex, increasing the subjective wealth of both parties to the exchange. It is the exact same nature for *all* freely traded exchanges. The fact that both parties to an exchange increase their subjective wealth by exchanging is the *only* reason that trade occurs. Attempting a scary labeling tactic such as “global labor arbitrage� changes nothing of the economics of the situation. A GLOBAL LABOR ARBITRAGE has always existed just as a global marriage arbitrage has always existed (actual poverty increasing government measures restricting free trade aside), yet I hear no cries for the forceful prevention of marriages between specific individuals who happen to be artificially labeled of different nationalities or races, and that is akin to what the likes of Roberts are advocating. It is of the supreme arrogance that one can falsely maintain that another’s subjective wealth is greater by marrying only within one’s own nationality or race as it is necessarily quite the opposite for those who are prevented from doing exactly that just as it is so for those who wish to trade whatever to whomever.
If international trade outsourcing negatively impacting human welfare was true then the likes of Roberts and Pardon should advocate its implementation at the local level first where it can do much less real harm. Let them argue against neighborhood grocery store outsourcing and State (as in Illinois-Indiana) outsourcing to get a quick relatively much painless lesson in economics as the individuals effected would clearly be immediately recognizably worse off. It’s in the exact same way that “international� trade restrictions and prohibitions wreck a much larger disaster of the same sort as its effect is much greater than requiring individuals to buy overpriced groceries from mom and pop stores with government Senator pension wages and benefits.
Published: December 7, 2004 7:15 PM
John Pardon
The declining value of the dollar, the growing trade deficit, and the mounting deindustrialisation and loss of knowledge age jobs in the U.S. are facts which some find impossible to counter.
These situations are in fact the direct result of policies of global labor arbitrage which proponents insist upon calling "free trade". The utter failure of some to acknowledge that there is a problem illustrates how distant they are from reality.
Ultimately, the massive job losses in the U.S. coupled with the decline of the dollar and mounting trade deficits is unsustainable. Then. crisis will intrude upon the fantasy world in which some have chosen to live. (No doubt, many of these people are housed in universities where they devotedly read tratises by "experts" such as Jagdish Bhagwati and Daniel Drezner.)
Published: December 9, 2004 8:42 AM
Michael A. Clem
Certainly, there's a difference between free trade and what some people call "free trade". I wouldn't trust anything Bush or the WTO said about free trade, for example.
But the current problems we face are caused by varying degrees of prohibition of free trade, not of free trade itself. Saying that there's nothing wrong with free trade is not the same as saying there aren't real-world problems.
The main point, though, is that all parties of a voluntary trade benefit, even if they're middle class, otherwise, they wouldn't willingly engage in a voluntary trade.
You might be able to show that some, or even much, of the international trade isn't free in some way, but again, this wouldn't refute the benefits of free trade, but rather would illustrate the penalties of restricting free trade.
Published: December 12, 2004 5:49 PM