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Get it right on free trade

Cafe Hayek points me to a nice op-ed on Free Trade on the NYTimes, Here's some relevant excerpts,

I doubt there’s a human being on earth who hasn’t benefited from the opportunity to trade freely with his neighbors. Imagine what your life would be like if you had to grow your own food, make your own clothes and rely on your grandmother’s home remedies for health care. Access to a trained physician might reduce the demand for grandma’s home remedies, but — especially at her age — she’s still got plenty of reason to be thankful for having a doctor.

Some people suggest, however, that it makes sense to isolate the moral effects of a single new trading opportunity or free trade agreement. Surely we have fellow citizens who are hurt by those agreements, at least in the limited sense that they’d be better off in a world where trade flourishes, except in this one instance. What do we owe those fellow citizens?

One way to think about that is to ask what your moral instincts tell you in analogous situations. Suppose, after years of buying shampoo at your local pharmacy, you discover you can order the same shampoo for less money on the Web. Do you have an obligation to compensate your pharmacist? If you move to a cheaper apartment, should you compensate your landlord? When you eat at McDonald’s, should you compensate the owners of the diner next door? Public policy should not be designed to advance moral instincts that we all reject every day of our lives. [..]

For many decades, schoolyard bullying has been a profitable occupation. All across America, bullies have built up skills so they can take advantage of that opportunity. If we toughen the rules to make bullying unprofitable, must we compensate the bullies?

Bullying and protectionism have a lot in common. They both use force (either directly or through the power of the law) to enrich someone else at your involuntary expense. If you’re forced to pay $20 an hour to an American for goods you could have bought from a Mexican for $5 an hour, you’re being extorted. When a free trade agreement allows you to buy from the Mexican after all, rejoice in your liberation. [link] (emphasis mine)
The full article is worth a read and true for any economy in the world.

Opposition to free trade is not a current topic in the political discourse in Sri Lanka, partly because the politicians have much better things to talk about. In fact Sri Lankan politics has recently degenerated into just partisan finger-pointing instead of actual discussion on politics.

Even when some of these issues became relevant around the 2004 election, the anti-trade arguments rested obscure anti-westism bordering on economic nationalism, which needless to say, is a whole lot of nonsense.

January 16, 2008 | 6:01 AM Comments  0 comments

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