James Leroy Wilson's blog

Thursday, December 21, 2006

Fair Trade

This is my latest at the Partial Observer, and it will likely get me in trouble with libertarians. Excerpt:
Let's say Country A has a free market. Country B, however, is ruled by a criminal gang, that extorts money from the entire population to give to their friends. One of the regime's friends is a widget-maker. The regime showers this widget-maker with money, and also forces the widget-maker's suppliers to sell to him at below cost. As a result, the cost of making the widget is much lower than it otherwise would have been. The widget-maker then ships his products to Country A to be sold. Because these imported widgets were subsidized, and Country A's widgets were produced at free-market costs, the imports are cheaper. So Country A's citizens start buying the imported widgets. And this throws Country A's widget producers out of business. The profits go back to Country B, where the criminal gang in charge gets a cut.
[. . .]
Does Country A have a right to protect itself from this "invasion" of cheap goods from Country B?
[. . .]
The concept of the free market doesn't mean criminals are allowed to sell stolen goods. And Country B's widgets are essentially stolen goods - the people of Country B were robbed in order to help the widget-maker.

6 comments:

  1. Trade is good, but free trade is not fair trade. And don't forget that country B will not let country A sell goods in country B's markets.

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  2. I don't know that you can say that a "country" has rights, being an abstraction and all.

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  3. So, if an army invades the United States, the government of the United States doesn't have the "right" to repel the invasion because, hey, the United States is just an abstraction.

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  4. I don't think "right" is the correct term to use. The United States is an abstraction, but a defense of the territory it encompasses would likely be undertaken and organized around the idea of that abstraction. That doesn't make the nation state "real" other than as an idea or an organizing concept or a legitimizing argument, and it does not follow that the nation state possesses any "rights" in and of itself.

    Each of the subjects of the nation state has a right of self defense and defense of property, and they may choose to organize themselves for collective defense. You could make an argument that the state is such an organization and that it embodies the will and rights of its subjects such that it may properly be said to possess their collective rights, but I don't see you as an apologist for the state.

    It is not necessary to appeal to "rights", however, to make your point which, if you accept the premise of the state, almost anyone would concede is right on target except for your formulation of one state as being run by a criminal gang while the other is not.

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  5. If the organization is justified in its action, it has a right to do it. Perhaps I'm playing fast and loose with the word "rights." But all organizations and institutions are abstractions, yet we have to anthropromorphize them and discuss their actions as a collective one: America did this, the Church did that, Virginia was justified in seceding, etc.

    I didn't want to confuse the issue about the criminal gangs controlling states. For the purpose of the illustration, I wanted to point out that one country's government was worse than another.

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  6. You're actually on to something with this post... but there's no way to move it into our current situation.

    Let's move it into a more clear cut case.
    Socotania, a socialist government who subsidizes their "widget makers" and one anarcho-capitalist zone with many competing DROs.
    Any DRO would be justified in forbidding their customers from buying widgets from Socotanian widget makers, on the grounds that they are stolen goods, or at the very least charging them a fee to do so, or some such thing. In fact a DRO would be justified in suing anyone who bought those goods, on the grounds that it is a criminal act against the people of Socotania who aren't widget makers. However (and this is the point) the reparation would have to somehow be held in trust for the people of Socotania, perhaps minus legal fees, etc.

    Now in the real world, such a policy becomes mere spaghetti, as practically all goods could be considered "stolen" under those grounds, so it's rather difficult to say who is justified in prohibiting which trades. There's no clear case of moral force here, it's a matter of mere practicality of which stolen goods to levy fees on or prohibit. You can't just say "your shrimp is 70% stolen, and ours is 30% stolen, so we're justified in barring entry to your shrimp here".
    And of course if fees are levied, rather than simply barring the trade, the money collected needs to get back to the people of the other nation somehow (otherwise, you've participated in theft as well, one way or another).

    As a practical matter, allowing as much trade as possible is generally better for the people within any area.
    You may be able to figure out situations where it's not, but there's definitely no moral ground for restricting trade until you have an otherwise free market in a particular good.

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