Thread: The Free Trade Debate

I've posted a 3400-word essay entitled The Free Trade Debate on my blog:
http://ibrakefortrees.wordpress.com
(Look under Essays)

The essay covers the main arguments I know about in favor of free trade, and refutes each one point by point. (Ricardian theory, neoclassical economics in general, the libertarian desire to maximize freedom, the potential for trade wars, and the claimed inevitability of the borderless economy.)

I'm interested in getting some feedback, and particularly arguments I may have missed. Feedback can be left there or here.

For those who don't want to read anything that long.... The simple version is that free trade is a model based on faulty assumptions, and which has not found success in the real world. Those assumptions include the neoclassical (Ricardian) premise that a closed system is a good model for the real world, that a libertarian society won't degrade into a concentration of power in the hands of the few, and that the goal of society should not be the betterment of society, but simply economic efficiciency. (Even Adam Smith would disagree with that last one.)

You seriously think people here want to read a 40000 page essay on economics? People come here for a break from essays.

Originally Posted by GhostofMaxwell

You seriously think people here want to read a 40000 page essay on economics? People come here for a break from essays.

It's not quite that long, lol. A 3400 word essay will take about 10 minutes to read. I offered it here because I think it's a pretty comprehensive list of the major arguments in favor of free trade, and what's wrong with those arguments.

3400 words is about as short as I could make it and still get into the intellectual heart of the matter. But you're right that most people aren't interested in ideas, they just want cool sound bytes that reinforce what they already believe.

- Eric

Originally Posted by IBrakeForTrees

But you're right that most people aren't interested in ideas, they just want cool sound bytes that reinforce what they already believe.

Absolutely. People just want cool sound bytes. That's quite a good one.

P.S. I've donwloaded your essay for later reading. You might want to give better directions to it within your blog.

Originally Posted by Ophiolite

Originally Posted by IBrakeForTrees

But you're right that most people aren't interested in ideas, they just want cool sound bytes that reinforce what they already believe.

Absolutely. People just want cool sound bytes. That's quite a good one.

P.S. I've donwloaded your essay for later reading. You might want to give better directions to it within your blog.

That was my sneaky way of having people at least see the last blog post before going to the essay. :-) But, OK, the link to the Essay page can be found in the right-hand column under Pages. The Free Trade Debate essay is the only one on that page, for now.

Capitalism should be abolished, it's as simple as that.

Originally Posted by The P-manator

Capitalism should be abolished, it's as simple as that.

It largely has been. The current global economic system has been described by Noam Chomsky as "corporate mercantilism".

Laissez-faire Capitalism is a theoretical model that isn't related to the real world. So when people try to implement it, what they get instead instead is a concentration of power in few hands, which is exactly what Adam Smith was trying to replace.

Ditto for socialism, another theoretical model that doesn't work.

I actually started my blog as a way of looking for a third alternative. The system that seems to me both fair and functional is the marriage of a free economy with social legislation, an idea pioneered by 19th century German economist Gustave Schmoller, and implemented in some European countries like Sweden.

- Eric
http://ibrakefortrees.wordpress.com

Originally Posted by The P-manator

Capitalism should be abolished, it's as simple as that.

Interesting , but which alternative do you suggest?

I think we need to get back to localization. Look at what globalization has done to us - it has brought us major corps who don't care about anything, be it people or the environment. The best way out of this is to have small commmunist communities. As I always like to point out, it would be really easy for a small town or even a city to become communist. But like democracy and capitalism, when applied on a large scale it doesn't work.

So local communist economies would work best. People work for the town and the town gives them food, house, car, and all necessities. As the town gets richer, it can give it's citizens more and better stuff. But of course, everyone gets the same thing - or something that is worth the same. Not everyone is gonna want the same car, so let them choose their own car design, but it must be worth the same as everyone else's. This is the future. I think.

Originally Posted by The P-manator

I think we need to get back to localization. Look at what globalization has done to us - it has brought us major corps who don't care about anything, be it people or the environment. The best way out of this is to have small commmunist communities. As I always like to point out, it would be really easy for a small town or even a city to become communist. But like democracy and capitalism, when applied on a large scale it doesn't work.

So local communist economies would work best. People work for the town and the town gives them food, house, car, and all necessities. As the town gets richer, it can give it's citizens more and better stuff. But of course, everyone gets the same thing - or something that is worth the same. Not everyone is gonna want the same car, so let them choose their own car design, but it must be worth the same as everyone else's. This is the future. I think.

You'd probably be interested in the book, The Case Against the Global Economy, a collection of essays be different writers, edited by Mander and Goldsmith, that point up the problems of globalization and the advantages of localization.

Btw, communism doesn't work even on a small scale. The communal kibbitzes in Israel have largely given up. Ditto for the hippie communes in the U.S. I think the kids leave as soon as they're old enough to do so.

One big problem with socialism is that it depends on people being altruistic. But psychological and neurological studies show that people prefer fairness to altruism (or self-interest). Which means that the goal of society should be to create fairness, not equality.

- Eric
http://ibrakefortrees.wordpress.com

Originally Posted by IBrakeForTrees

I actually started my blog as a way of looking for a third alternative. The system that seems to me both fair and functional is the marriage of a free economy with social legislation, an idea pioneered by 19th century German economist Gustave Schmoller, and implemented in some European countries like Sweden.

I thought that the marriage between free market economy and social legislation was pretty much implemented everywhere, just different amounts of one or the other. There are no neo-capitalist country's nor any totally isolated communist country's.

Originally Posted by Cat1981(England)

Originally Posted by IBrakeForTrees

I actually started my blog as a way of looking for a third alternative. The system that seems to me both fair and functional is the marriage of a free economy with social legislation, an idea pioneered by 19th century German economist Gustave Schmoller, and implemented in some European countries like Sweden.

I thought that the marriage between free market economy and social legislation was pretty much implemented everywhere, just different amounts of one or the other. There are no neo-capitalist country's nor any totally isolated communist country's.

The marriage has been happier in countries other than the US. Since the Reagan Revolution of 1980, the US gov has been dismantling it. The dominant political philosophy during that time has been what economist Jared Bernstein calls YOYO -- "you're on your own". Environmental controls, worker safety rules, disaster prevention and recovery, predatory lending policies, and so on... have been declining.

And new social legislation, like providing health care for people who don't earn enough to pay for it themselves -- is greeted by cries of "Socialism!".

Not much of a marriage.

- Eric
http://ibrakefortrees.wordpress.com

I agree. It does sound like it becoming more and more one sided, perhaps after the next election the US will move slightly more to the centre and hopefully start to move out of the socialist paranoia age. Even in the long run though, the US wouldn't go all out and abandon government funded policing or education etc, would it ?

Originally Posted by Cat1981(England)

I agree. It does sound like it becoming more and more one sided, perhaps after the next election the US will move slightly more to the centre and hopefully start to move out of the socialist paranoia age. Even in the long run though, the US wouldn't go all out and abandon government funded policing or education etc, would it ?

Well, we'll always have police. Even Putin's Russia has police. :-)

If Hillary wins the next election, that will move the system more to the center, as it did with Bill Clinton. But the center has no clue about right and wrong, only what's politically acceptable at the moment. And, in particular, what's acceptable to the largest campaign contributors. So during Bill's 8 years, social progress continued to decline, while pro-corporate policies like "free trade" advanced.

Where I see this going -- unless it *really* gets turned around -- is towards more and more corporate control. We'll think we're still free, but a corporate oligarchy will actually make all major decisions, as they've already done with health care, our invasion of Iraq, our (lack of a) global warming policy....

- Eric
http://ibrakefortrees.wordpress.com