To Oppose Free Trade Is To Embrace Violence

[Libertaurum]

First off,

Neither NAFTA nor any other trade agreement in effect today is an example of free trade. Free trade does not require thousands of pages of regulations, often drafted by lobbyists and heavyweights from major industries and corporations. Instead, they are perfect examples of socialism; they are trade as dictated and controlled by the State to favor certain groups at the expense of others.

I expect some will argue that "trade that is only free one way amounts to economic suicide", that one country should only reduce or eliminate tariffs on products coming from countries that reciprocate by reducing or eliminating their tariffs. This is a bit like accusing the people in charge of other countries' central banks of devaluating their currencies in order to gain some advantage. It ignores the fact that, in reality, restricting the movement of people, products or capital is injurious, first and foremost, to the people in the country whose gov't is doing it. Just like devaluating a currency is most harmful to the people in the country where that currency is legal tender. It's like complaining that your enemy shot himself in the foot while you have not.

In "Human Action", Mises put forth solid arguments to support his idea that the only alternative to free trade is violence and war. When govts use force to restrict the movement of people, products or capital, imbalances cannot be peacefully resolved. The demand for certain things cannot be peacefully met, certain products and services cannot be peacefully supplied. Imbalances grow and, eventually, the dam overflows and fails.

Anyway, here's a portion of an interesting article on the subject. As the author points out, protectionism, tariffs and immigration restrictions make no sense, neither economically nor logically.

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The Economic Argument

So far, this all ignores the economic arguments against restricting free trade. Those of us not engaged in the direct importation of goods will also suffer when goods are restricted. Trade restrictions on pharmaceuticals, auto parts, food, and whatever else only makes those goods more expensive. And not all those goods are consumption goods, of course. Entrepreneurs use those goods to create new goods and then must charge higher prices to his customers also. A janitor who must pay higher prices for a truck or a shop vac due to trade restrictions must pass on a portion of that cost to the customer. And, with higher prices, the janitors will have fewer customers and fewer profits. Shopkeepers in turn must then have dirtier shops because they can afford fewer janitorial services.

Yes, a tiny portion of the population that’s engaged in the domestic manufacture of shop vacs and trucks will benefit. But, it’s the janitors and their customers (the hair salon and sandwich-shop owners) who are paying the price of subsidizing the factory workers.

These issues aren’t part of an intellectual exercise. The downside of restricted trade is very real for real people.

But, we don’t need me to explain the economic problem with restricting trade. Adam Smith, Ludwig von Mises, and the entire line of liberal, laissez faire economists agree on this point.

The Nationalist Argument

The nationalist program of using protectionism to shield American workers from competition is based on the idea that trade with outsiders hurts the local economy. But many who accept this idea in the international sphere then promptly forget the idea when applied domestically.

For example, we’re told by the nationalists that it hurts California workers if Californians buy goods from neighboring Mexico, but it’s apparently A-OK for Californians to buy goods from Illinois or New York, both of which are distant economies that likely contribute far less to the economic well-being of Californians than the economy of northern Mexico.

Murray Rothbard mocked this mindset in the context of immigration when he wondered why it’s not a problem when someone moves from Massachusetts to take a job in Michigan. In that case, the response is never to complain about how people from Massachusetts are stealing the jobs of people in Michigan. No, the argument is only applied if someone crosses an international boundary to do the same.

As with trade, then, it’s bizarre to argue that goods imported from Virginia to California are perfectly tolerable — and even beneficial — while imports from neighboring Tijuana are somehow damaging.

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The full article is well worth reading.

https://mises.org/library/oppose-free-trade-embrace-violence

 

[Bigfoot]

I thought this video does a good job of illustrating the essence of free trade.

 

[Alric]

I thought this video does a good job of illustrating the essence of free trade.

It is a nice video. Though single person could actually make a pencil by them self.

 

[Libertaurum]

It is a nice video. Though single person could actually make a pencil by them self.

Really? You're going to mine some graphite in the morning and then go fell a cedar before lunch? Cook up some rubber for the eraser along with dinner? Forge yourself some metal for the ferrule in the garage? No, no single person could produce a pencil from scratch without anyone else's help, whether direct or indirect. Nor could you produce a lighter, a phone, a car or a TV.

But the larger point is that people, freely associating and acting voluntarily, produce all kinds of things, from pencils to computers, cars and airplanes. Keep that in mind next time you hear someone suggest that, without gov't, there would be no street lights, no roads at all, no running water or any one of a number of products and services which are relatively simple when compared to many other, much more complex products and services that people manage to produce and offer each other, without anyone resorting to the initiation of violence and without coercion.

 

[Alric]

Really? You're going to mine some graphite in the morning and then go fell a cedar before lunch? Cook up some rubber for the eraser along with dinner? Forge yourself some metal for the ferrule in the garage? No, no single person could produce a pencil from scratch without anyone else's help, whether direct or indirect. Nor could you produce a lighter, a phone, a car or a TV.

First off the video says no one could do it even if they had all the materials in front of them already. Secondly, yeah a person could still do that by them self anyway.

 

[Rusty Shackelford]

I don't make mistakes so no need for eraser or metal ferrule!! :)

I can get some twigs, start a fire with with natural out door skills and char the end of the "pencil" size twig and bam. have a abraham lincoln style pencil that will do the same job as the intricately designed pencil in the intricately designed video.

 

[Bigfoot]

First off the video says no one could do it even if they had all the materials in front of them already. Secondly, yeah a person could still do that by them self anyway.

Let's say you do have all the raw materials in front of you, how are you going to shape and put together those materials without tools? Are you going to make all of those tools by yourself? Surely not. You aquire the tools by trading with other people.

 

[Bigfoot]

But the larger point is that people, freely associating and acting voluntarily, produce all kinds of things, from pencils to computers, cars and airplanes. Keep that in mind next time you hear someone suggest that, without gov't, there would be no street lights, no roads at all, no running water or any one of a number of products and services which are relatively simple when compared to many other, much more complex products and services that people manage to produce and offer each other, without anyone resorting to the initiation of violence and without coercion.

Very well said!

 

[Alric]

Let's say you do have all the raw materials in front of you, how are you going to shape and put together those materials without tools? Are you going to make all of those tools by yourself? Surely not. You aquire the tools by trading with other people.

Rusty already explained one way to do it that didn't use any tools. There are several other ways to do it as well. Either not using tools or using very simple tools one could make them self. It might not look like a massed produced pencil but it will write stuff just fine.

 

[Libertaurum]

Rusty already explained one way to do it that didn't use any tools. There are several other ways to do it as well. Either not using tools or using very simple tools one could make them self. It might not look like a massed produced pencil but it will write stuff just fine.

Still stuck, I see. The video did not say people could not make a mark without a pencil. It said no single person could produce a modern pencil and immediately described the pencil in question, in minute detail. You can use a stick to write, that wasn't the challenge. And you're still missing the larger point by a country mile.

Now, perhaps you'd like to get back to the subject at hand and share your position on free trade vs violence, Alric?

 

[Alric]

Still stuck, I see. The video did not say people could not make a mark without a pencil. It said no single person could produce a modern pencil and immediately described the pencil in question, in minute detail. You can use a stick to write, that wasn't the challenge. And you're still missing the larger point by a country mile.

Now, perhaps you'd like to get back to the subject at hand and share your position on free trade vs violence, Alric?

The video just says a pencil, and it says no one person on earth could make a pencil. Which simply isn't true. There is a lot of ways to make a pencil. Pencils that are actual pencils not just things that make marks. They don't need to be exactly like the one described in the video to be a pencil. In fact most pencils today don't even look like that.

Any way, the reason I pointed that out and brought it up, was because I think it is important to have a practical and realistic view of the world. Not just an idealistic view, which is what the video portrays. It is nice for an overview of how things work but it isn't realistic in the details.

In this case, you can't have free trade with people who don't want free trade. If you trade to another nation and they put crushing tariffs in place it will hurt their own country, but your country isn't going to really be able to trade with them either. People can't just ignore them and keep trading freely, because eventually they are so high that there is no profit in sending stuff to that country at all.

Any way, I generally agree with you. I just wanted to point out that you can't have 100% free trade unless everyone is in agreement, which is why there is a lot of trade agreements between governments and stuff where there was never free trade to start with but they want to try to open a bit more trade. It isn't always a matter of restricting trade but some times they are trying to unrestrict trade but one party is against it, which is why it take negotiating and agreements and stuff.

 

[Libertaurum]

I understand what you are saying. However, trade does not happen between countries, it happens between individuals. Nobody, not a majority and not the State, has a legitimate right to restrict trade between individuals.

If one nation's government places crushing tariffs on products imported from your country, the quality of life of the people in the country placing tariffs will suffer. But placing tariffs on imports from that country in response to their tariffs will hurt the people in your country.