On Tue, 5 Feb 2008, Brian Holtz wrote: [MO]: >whether trade with slave owners (or countries that are >so unfree that their citizens are virtually slaves), is >really "free trade". (MO
[BH]: >We'll just have to agree to disagree over how much the >labor price advantages of America's trade partners are >due to anything remotely resembling chattel slavery. >I suspect this particular provision of the DFC platform >has more to due with demands for rent-seeking protections >by traditional Democratic Party constituencies, than with >concern for the lack of freedom of workers abroad. | [MO]: As a co-founder of the DFC, I assure you that the DFC's Platform is based on two main principles: the basic principle of moving toward the most liberty possible; and doing so by means of a transition approach that is socially responsible and politically feasible. So, as I mentioned, the stand on Free Trade With Free Countries partly reflects a practical and politically feasible transition for gradually phasing in free trade, whereas it is not realistic to call for suddenly doing it all at once, and it would also not be good for the economy to suddenly do so. | The other principle involved in the Free Trade stand is related to the question of whether to have open trade with countries that are extremely unfree (such as those either under dictatorship or oligarchy, where their governments have handed over much of the industry, land, and natural resources to a few companies). Contrary to some claims, it does not necessarily benefit most people in either country when there is totally open trade with a country that is under such unfree conditions, especially since our own country is far from having complete economic freedom, either. So, it makes sense to gradually phase in free trade, as both countries move toward more freedom. | Probably the most clear discussion of why totally open trade does not necessarily benefit people in either country is still the book "Protection or Free Trade", which Henry George wrote years ago, and which has probably never been answered to this day. For example, some authors from the Cato Institute and others have cited that book as being a great argument for free trade, but they apparently didn't read the last third of it, which shows how people in either country don't necessarly benefit from totally open trade, if neither country is anywhere near having economic freedom. That is a question that deserves debate, but probably no one has been willing to try to answer the points raised in that book. (If anyone knows of an author who has attempted to do so, I'd be interested to hear about it, and would be glad to look into it.) In any case, even if it were true that totally open trade with a very unfree country would be good for people in both countries (which is dubious, as indicated), it would still make more practical sense to gradually phase in free trade, not only because of the need for realistic, political feasibility, but also because a sudden, drastic change would be economically harmful and irresponsible. Mike O'Mara Pennsylvania
