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What’s All This Confusion About Free Trade

What do you think free trade is?

People talk about economic trade like it is about one big blob of people in the global marketplace trying to take advantage of that other big blob of people. Words like “society,” “country,” and “community” make it seem like groups take action as entities, when what is actually happening is either individuals are freely agreeing or disagreeing to trade; or some individuals are controlling others choices through threat of force. It is important to understand how society is a function of individual choices.

free tradeThis is further confused by misunderstanding the term ‘free market,’ which is only referring to individuals making their own choices, not some bizarre creature hypnotizing buyers and sellers. To hear some people’s reaction to free trade or free markets, you would think these ways of approaching human interaction are responsible for basic human nature. No, human nature is what it is. A “free market” simply lets people have the advantages or disadvantages of their own choices. An unfree market leaves individuals more at the mercy of other people’s priorities or irresponsibility.

What free trade is, in it’s truest sense, is individuals getting to decide what they want to buy from whom at which price. Or, in the negative, it is the absence of some people exerting power over others to tell them how to go about their business. Real free trade would entail people buying and selling according to their own priorities, without arbitrary borders and regulations set up and enforced by someone else whose interest is that of a meddling spectator.

Who is opposed to free trade and why?

What seems to concern some opponents of free trade is the possibility of fraud or negligence in the product or transaction. Supposedly, government regulation and oversight will take care of this, but we all know that governments are universally corrupt and play favorites. They not only control who can even participate in buying or selling (by monopolizing the money, requiring licenses, zoning where business can be done), but they heavily skim off of all transactions like any good mafia organization.

Besides that, governments are notoriously inefficient and inept at providing any service. The inspectors have little motive to guard “the public” from harm and the regulations typically inhibit creative problem solving in all the non-governmental businesses as well. Those inspectors who do listen to their conscience still don’t have access to the types of economic signals (prices, demand, marketplace consequences) that prompt a business to better adjust how they operate. If they do have some good ideas, they must contend with bureaucratic red tape and legislative lumbering to try to achieve the smallest change.

With free trade, individuals would be free to make choices that would work together in a myriad of creative ways to inspire businesses to provide products and services that meet the criteria that the buyers deem important. If enough people want clothes produced according to certain principles, the businesses will have to do their best to prove they do it that way. If enough people care that their food products have specific ingredients, businesses will have to find ways to prove they are doing that to get buyers.

Just as importantly, customers will not be lulled into thinking regulations are providing quality they are not. They will not be prohibited from buying foods they judge healthy or desirable. Neither will they have to have the extra cost of regulatory bureaucracy figured into prices. Prices will more directly reflect the values of those engaged in the transaction, allowing people to better decide how their money is working for them. (Especially if it is not government monopoly money. That was a pun.)

Who should you be free to trade with?

Free trade is not just about what goes on across political boundaries (that were decided without consent of 99% of the people), but rather about being free to have economic transaction with people whether they are near or far. If a neighbor down the street conveniently has some produce or a handmade sweater that is deemed worthy of purchase, great; but if something more suitable, more in a desired price range, or with a better quality reputation is across town, free trade would enable people to buy and sell there, too.

But, wait, you say. You can already do that in most cases. This highlights the point that trade regulations or boundaries are arbitrary or designed to give preference to some over others. Who should get to decide where such boundaries should be? Who should get to tell the rest of the population who they can do business with or tax in a way that manipulates the market?

Trade barriers are both geographical and regulatory. The most obvious to most people are those that deal with geo-political boundaries. These violently established and maintained borders keep people corralled both in and out like animals. In the case of governmental borders, it is not about private property, unless you are willing to admit that there is no such thing as public property. So-called ‘public property’ is actually not available to ‘the public’ to use without express permission and monitoring by those with government power. The power may change hands, just as in days of old, there was frequently a new king on the throne, but the land belonged to the king and woe to the subject who trespassed. So it is today. It seems we might really be living in some version of feudal overlord system. This, of course, requires closer examination of the immigration discussion with a new lens. Whose land is this and who gets to decide who gets to travel where? This is another facet of free trade.

Regulatory trade barriers are those like licensing and governmental approval wherein businesses have to pay for the privilege to run a business. Some already established business people often get to create barriers for future competitors by requiring licensing or schooling. They also tend to set protocols that inhibit creativity in providing the product or service, thereby reducing the likelihood of competition. It is their way or no way.

Most businesses can only invite on-site customers in a governmentally approved location, vis a vis zoning. This means it is more expensive to even begin a business in many cases. This doesn’t even take into account building codes that make property at least inefficiently expensive. (Because we all know that people will only build buildings that collapse or rot on them if there are not regulations.) All of these things are some people deciding what others can or cannot do with their money. It assumes that government agents are miraculously benevolent or superior to the rest of the population. Or maybe people just like to control other people. Either way, none of this is free trade.

Can free trade works in spite of life being unfair?

There is some concern about how ‘other’ governments are subsidizing the people within their borders. That is like complaining that the little girl running the lemonade stand down the street is getting more financial assistance from her parents. Two things to think about. One, if she doesn’t have better lemonade, it probably won’t matter in the long run. Two, there are ways to get creative and outsmart competition, whether it be fair or not. Sometimes ‘fair’ is in the eye of the beholder, anyway. No two situations are ever going to be equal. There is no way to make them exactly equal. We must compete with the skills and resources at our own disposal.

Another concern is that people in other locals aren’t getting paid enough. We are encouraged not to buy certain products because of this supposed abuse. When we don’t buy the products, those poor people don’t get paid anything. Since most of them are barely surviving, they suffer greatly from this lack of trade. Without any real knowledge of what is driving those wage, too many people drive those they purport to care about into a more desperate employment, only to complain about that, too.

Part of what is important to understand is that the economics of a specific area are affected by several factors, including government, resources, general prosperity, cultural attitudes about work, disease, and weather. What may seem like horribly low wages to someone in America may be high living to someone in another place. Since value in everything, even job wages, is only perceived value, we should be careful about deciding what a good wage is. Maybe our ideas are distorted by inflation in our own locale? Maybe there are hidden costs in wages, so we aren’t really making what we think we are? Should the people in California or New York be demanding higher wages for the people of Idaho, where cost of living is lower and country life provides different opportunities for less money? Even neighboring cities can vary in cost and value perceived by the population and imposed by city councils.

Should we all be free to trade?

Confusion about free trade seems to stem from a few different things. One, government-speak again takes a basic issue and complicates it with made-up language and appeals to people’s selfish tendency to control others. Two, there is a lack of understanding economic realities in every exchange or marketplace. Three, people have an inadequate sense of how unavoidable individual action is. Four, it is too easy for people to think of work as something some people impose on others, instead of just a fact of life. Five, individual cooperation gets confused with totalitarian social constructs.

Too many people want to be ‘free’ to decide what other people are not allowed to do or are required to do. These ideas may start out with good intentions, but it really shouldn’t take much examination to realize and admit that it is arrogant to try to run other people’s lives like that. If someone wants to influence other people, let them try to do it with reason and how they choose to spend their own money. The ability to trade freely makes this kind of influence more readily available to everyone.