Free Trade

Free Trade

(posts on)

Posted 10/7/06 (By Travis)

10/1/06 Washington Times

Essentially a more precise reiteration, of 'The Founding of the United States and the Constitutionality of Charity'. These ideas are especially powerful when coupled with supportive data, such as that compiled by economist Greg Mankiw:

Philanthropy Vs. Free Trade

6/26/06 Greg Mankiw

Compare the numbers from two articles in today's NY Times:

Warren E. Buffett, the chairman of Berkshire Hathaway Inc. and one of the world's wealthiest men, plans to donate the bulk of his $44 billion fortune to the Bill & Melinda Gates Foundation and four other philanthropies starting in July.

According to the study [by the International Food Policy Research Institute], a deal similar to what is now on the table — modest cuts in real tariffs, limited cuts in domestic support payments, full elimination of export subsidies and 97 percent duty- and quota-free access for exports from the poorest countries — would create global gains of $54 billion per year.

In other words, success in the Doha round of international trade talks would give the world more every year than what Buffett can give once after a lifetime of being the world's most successful investor.

However, even if Gates and Buffet gave the same amount away every year the comparison would still be flawed because Gates and Buffets' charity is given as aid, which is temporary, if even useful, a shot in the arm with possible debilitating side effects. Free trade agreements allow for lasting and sustained economic growth with jobs and wealth permanently created along with a healthy societal dose of moral incentives, such as success and advancement. The benefits of free trade are not disputable, from China, to Ireland, to Estonia, to Chile, to the Smoot-Haley Tariffs of the Great Depression, to NAFTA, you'll be hard pressed to find an economist speaking on the record against free trade. In fact, the only losers in all of this are the Unions, but that's only because their government imposed monopolies are being chipped away... Boo hoo....

Now, from here we can go a few places. First, we can launch an attack on our friends on the left, who attempt to cherry pick data, dividing state and private 'aid' into two categories, ignoring the private 'aid', which Americans lead on a per capita basis, and laud the 'public' or, better said, 'pillaged', aid, a dubious category lead by socialistic nations such as some in Europe, whom forcibly take more per capita from their citizens to redistribute as 'aid' than Americans. While we still win this argument, even on their own terms, we need to go one step further and question the assumption that these 'aid' statistics are even relevant. In fact, IMO, their basic premise is irrelevant, besides illustrating basic ideological failings (the subject of the other head of our pincer movement), as it is free trade, freedom, which really alleviates poverty and spreads prosperity and even (ehm, ehm) practical inequality.

The second attack is more satisfying than scrimmaging with our friends on the left, as it is a direct assault on government itself. This prong retrospectively lays the blame at the foot of government for prolonging the poverty of the people. After all, what is free trade, but removing and reducing the size of government? 100% free trade would be the natural state of things if governments and politicians were not around to ply their corruptive and corrosive policies upon uneducated and ill-informed populaces. The enemy here is government and, more importantly, IMO, the enemy is government in nearly all other facets of public policy as well.

Finally, on a more personal level, one cannot help but arrive at the conclusion that it is possible, although perhaps not politically correct, to be an extremely moral person and accomplish great good without giving a cent to charity or spending a second volunteering. This is not to be critical or disdainful of these activities, but merely encourage cost-benefits analysis, which often appear to be sorely lacking, especially when the acting entities are NGOs, Hollywood actors, 'rockstars' like Bono, or government itself.