I was raised on Milton Friedman as the mother’s milk of economics and I have been an ardent libertarian for many years.
I believed that free trade was an unquestioned good thing, that protectionists were misguided at best and corrupt at worst, and that the French mercantilists-skewered so profoundly by Adam Smith in The Wealth of Nations- were the closest thing to pure evil prior to the publication of Karl Marx.
How then is it possible that I have become an active opponent of free trade?
Let’s be clear about one thing: When I am addressing the subject of free trade, I am not talking about the heavily managed “free trade” that is negotiated in massive government free trade agreements like NAFTA. I am not addressing the imperfect realization of the ideal.
I am, however, talking about the ideal itself. About the legally unhindered free movement of goods, services, and labor across national borders around the world. I am talking about free trade in its pure and unadulterated form.
The way I see it, there are three possible consequences of free trade.
Either unmitigated free trade is beneficial to everyone; it is detrimental to everyone; or it is beneficial to some and detrimental to others.
The neo-classical perspective is that it is beneficial to everyone, even those who appear to be suffering from its effects in the short term. This is the perspective I was taught and it was what I believed, more or less unquestioned, from the time that I read Free to Choose as a child until a few years ago.
The essential problem with free trade is that it is based on an antiquated model that failed to anticipate the possibility of inexpensive air travel and cheap international communications, both of which significantly reduce the natural barriers to the free movement of peoples. This has resulted in negative consequences that were never even remotely envisioned by Adam Smith, David Ricardo, or any of the classical champions of free trade.
These consequences lead necessarily to the following logical argument which must be considered seriously by any advocate of free trade.
1. Free trade, in its true, complete, and intellectually coherent form, is not limited to the free movement of goods, but includes the free movement of capital and labor as well. The”invisible judicial line” which is regarded with contempt by free traders does not magically become visible simply because human bodies are involved. While some free traders recognize the problem and attempt to artificially separate the free movement of goods from the free movement of services, this is not defensible on any of the rational intellectual grounds used to defend the free movement of goods and capital.
2. The difference between domestic economies and the global international economy is not trivial, but is substantive, material, and based on significant genetic, cultural, traditional, and legal differences between various self-identified peoples.
3. Free trade is totally incompatible with national sovereignty, democracy, and self-determination, as well as the existence of independent nation-states with the right and ability to set their own laws according to the preferences of their residents, because it eliminates the ability of nation-states to defend their own borders and populations.
4. Therefore, free trade must be opposed by every sovereign, democratic, or self-determined people, be they American, Chinese, German, or Zambian, who wish to preserve themselves as a free and distinct nation possessed of its own culture, traditions, and laws.
In my next post, I will mathematically prove why the USA cannot possibly permit free trade and hope to remain a Constitutional or coherent nation.