Hi Harry et al,
At 12:33 PM 2/1/2002 Friday, Harry wrote:
>
> Arthur,
>
> We get our clothes from the tailor - or from Penny's or Marks and Sparks
>
> We get our meat from the butcher and our produce from the greengrocer.
>
> We get our milk from the milkman.
>
> Isn't this more sensible than keeping two cows - one to slaughter - growing
> 17 different vegetable, running up tee-shirts on the sewing machine, and
> spending a couple of weeks producing an ill-fitting suit?
>
> So, why does this all change at the docks?
>
> Free Trade is not a political policy. It is natural for humans to exchange.
>
> Protection is a policy that tries to prevent this natural cooperation from
> happening.
>
> How simple this all is. Why make it complicated? Perhaps because that's the
> way the Neo-Classicals make a living.
>
> Harry
The concept of free trade appears to assume that the means of getting
goods and services from supplier to consumer is a great concern.
This might be true in local areas, but is certainly not true in a global
sense. There are lots of reasons that transportation over great distances
cannot be depended on:
1. war and civil distress
2. shortages of supply of energy and fuel
3. breakdown of transportation means
4. weather and other natural disasters
5. competition between different transportables
6. fear of contamination of product
7. pollution due to transportation means
The most significant limitation is that whatever consumers might
consider to be necessities will drive a desire to be self-sufficient.
For example, even if Afghanistan might be the most efficient
producer of fresh milk, there is no way that parents in my town
would allow their children to be dependent on that source, even
in the best of international relations. Too many "what ifs".
This is, of course, what drives protectionist policies in the
first place. Local suppliers want a guaranteed market and
consumers want a guaranteed supply.
A free market might work well for discretionary products, like
T-shirts or toys. As the conceptional distance between consumer
and supplier grows, the market starts to resist.
Wholesalers who stockpile large amounts of product (like a years
supply of grain in silos) solve some of this problem, but not
all. And it may depend where the storage is. The further from
the consumer, even in a big country like the US or Russia, the
bigger the concern.
Dennis Paull
Half Moon Bay, California
