James Leroy Wilson's blog

Tuesday, April 08, 2008

Is Trade Overrated?

Ever wonder why the USA has such inequalities in wealth compared to other nations?

I think it has to do with the size of the country. If none of their books were ever translated or marketed in other countries, the most successful American author would still be many times richer than the most successful Danish, Swedish, or Israeli author. He has a much bigger country, a much bigger market to sell to. Even more successful would be American producers of goods and services - especially if the government subsized their industries, paved the roads for them, and provided naval protection for the oil required for their trucks.

I believe in free trade - in the same way I believe in open immigration, and the abolition of most State functions from marriage licenses to corporate charters to public education. That is, in the same way I wish for a free, planetary civilization - without a government screwing it up.

But under present governmental arrangements, and what the majority of people will believe and will accept, do I believe in free trade? No more than I believe in unrestricted immigration, the abolition of the military, or the abolition of the United States government in favor of a North American Union bureaucracy or World Government.

In this age, you just can't "liberate" the people. Not even "some of the people (such as, Americans) some of the time." So long as there is a welfare state, unchecked immigration has the potential to overrun the country and its Treasury, even if today's statistics suggest that isn't happening yet. Likewise, so long as the domestic economy is distorted by subsidies, regulations, and unequal taxation, there is the potential for low-priced, tariff-free imported goods to drive your neighbors out of business. This would create a downward spiral in your community: fewer people with discretionary spending will mean fewer restaurants, theaters, barbershops, and quality public facilities such as parks.

You may not be happy this is the world we were born into, but you may not be happy about the family and economic condition you were born into either. It doesn't mean you have the capacity to change it through political action. We have the borders, we have the armies, we have the state-sanctioned laws. If the United States government and every state and local government is suddenly dismantled, that won't create a libertarian or anarchist society, it will only create a power vacuum in which foreign governments and/or domestic usurpers will willingly fill. This will remain true until there is a change of consciousness throughout the human race.

I can therefore see a place for "fair trade" in government policy. I addressed this issue in 2006.

In any case, the point of the question, "Is Trade Overrated?" has not to do with particular instances where trade is beneficial. Obviously, it makes more sense for the Yukon to import oranges from Florida rather than slap tariffs on Florida oranges in order to "encourage" domestic growing. Rather, I'm asking, is the mass-market - i.e., a giant free-trade zone - all that beneficial? Is a global mass market beneficial?

I would suggest that in an anarchist, planetary civilization, there would be genuine free trade, but far fewer goods would actually be traded over long distances than is the case today. For instance, the people in each region of the earth will find that locally produced, fresh food is better than chemically-preserved "food" transported from hundreds or thousands of miles away. And they will find that, no matter where they are, the locally-manufactured good would be less expensive than foreign-made goods. That's because no nation-state would be subsidizing the transportation costs of merchants; nation-states would not exist. No national navy would be protecting private freighters. Every enterprise and journey would be paid for by investors, not the government. Only the most precious of goods would be profitable in trade over long distances. For the most part, people would rely on local sources of food and energy, because no State would make it easier and cheaper for manufacturers and merchants to trade with far-away places.

In such a Stateless scenario, there would be far less fuel consumption and pollution than is the case today. And food would be fresher, more natural, healthier.

The strongest argument of the United States Constitution over the Articles of Confederation is that it created a free-trade zone within the nation. But did this really benefit the people? Or did it just replace a system where Big Business was forced to bribe thirteen state legislatures, with a system in which it only had to (far less expensively and thus more worthwhile) bribe one national Congress? Where one national "mass-market" became possible, leading to the creation of millionaires and billionaires?

I don't resent honestly-gained riches, nor do I resent those who get rich under our present system. But I wonder if our present system, relying on expansive, centralized government, is more beneficial than locally-focused government - even if local government was more protectionist?

I doubt that in an anarchist global society there would be so much trade - unless under freedom people found a way to make transportation costs extremely cheap. And because "globalization" today suggests not less government but rather World Government, I understand why citizens of nation-states would rather defend their countries and economies, even if this means suffering the perjorative of "protectionist."

Unless and until energy costs and transportation really is dirt cheap, it is understandable why people fear they are getting screwed by "free trade agreements" and globalization. If the state stops subsidizing "free" trade, we'll have a more even playing field.

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