Sunday, November 06, 2005

Free Trade

Talks set up in Argentina to establish a "free trade zone" across the Americas. Some are celebrating this fact. Others are disappointed (to say the least). I have mixed feelings. I see people on both sides offering rationalizations and half-truths in support of a position that threatens to do more harm than good.

The Liberal Problem

I am going to take on the liberal side first. On the liberal side, there are protests against "outsourcing" and against companies that move jobs out of this country to a country where people are willing to work for substantially lower wages.

This is a complex issue, and there is no way to give an overall assessment in the confines of one of these posts. The best that I can hope for is to address some of the issues involved in this debate, and how a moral resolution of those issues will move the discussion forward, though other issues will remain.

Anti-Free Trade

There are a group of people protesting these negotiations that are "anti free-trade." This is not a wise position to take. Trade is the most powerful tool that exists for increasing everybody's well-being.

Imagine that you are living alone on a planet with nobody to trade with. You have to build your own shelter, find your own food, prepare that food, build your own tools. If you should ever suffer some sort of calamity, you stand a good chance of dying.

Introduce a few more people into the community, and everybody is better off. People now have the freedom to concentrate on what they are good at, and what they enjoy (for the most part), and trade what they produce with others, who are doing what they are good at, and what they enjoy. So, if you like to hunt, you do the hunting. You bring back two bucks instead of one. You give one to your neighbor, who likes to build things. In exchange, he builds your house.

Using this system, we generate special skills, and people become better at what they do. Because you are spending all of your time hunting, you can perfect the art of hunting, and bring back more food yourself than two of you -- neither of which were specialized hunters -- could bring back. Your neighbor, at the same time, is perfecting the art of construction, creating tools, and building better houses faster because he has had the opportunity to focus his efforts on this job.

An anti-free trade "mountain man" is somebody who wants to keep all of the work in his own household. He does not wish to have other households do the carpentry -- all carpentry is going to be done solely by the people in his household. Because his neighbor cannot do any carpentry for him, his neighbor has nothing with which to purchase food. Each household must do their own hunting and their own carpentry, and they are both poorer because of it.

This is an issue of general principle. We also have to look at specifics.


Liberals also have a problem with outsourcing. They are opposed to a company that hires a four programmers in India at $12,000 per year each, instead of a single programmer in America for $50,000.

Yet, at the same time they claim to have strong moral objections to those who aim to use the government to promote a system where the rich get richer and the poor get poorer. If a Republican were to go onto the floor of the House and say that he opposed a bill because it would allow an employee making $200,000 per year to be replaced by four employees making $48,000 per year, they would scream for this person's head.

This is hypocrisy. Where there is hypocrisy, there is proof that the person making a claim is only pretending to have morality on his side. In fact, he is not basing his decisions on any type of moral concern. He is basing it on some other standard, such as, "Whatever is best for me regardless of who else is hurt."

If the person being hurt is the person with $200,000, then they are evil, and they have no right to the money. If the people being hurt are the four who would have otherwise had jobs as computer programmers, then those who would give them jobs are being evil, because of the damage they will do to the person making $50,000.

Again, hypocrites, by definition, are people who are only pretending that their actions are grounded on some moral principle.

The Conservative Problem

Here is the problem on the Conservative side of the debate. There are individual companies that make more money than the people of entire South American nations. We Include provisions in these “free trade” treaties that the United States, for example, interfere in the internal affairs of another country. We cannot base our decisions on the basis of any perceived wrongs that we see may be going on elsewhere.

One of these huge companies comes in, corrupts the government, and virtually enslaves the people of that country. It is all perfectly legal, since the company lobbied for the laws that, for all practical purpose, forces the population of this country into the factories. And the United States can do nothing but watch.

The farming provisions contained within these proposals have this effect. One of the things that the United States government is fighting for is the right to continue to subsidize American farmers. These subsidies allow the American farmers to dump their subsidized goods on Central and South American markets. The Central and South American farmers are driven out of work. They have no option but to go to the city to find work. The people that they find are the same big companies that manipulated passage of a plan that has the effect of forcing people off of the farms and into their factories.

Another area in which these provisions are problematic is in the area of environmental protection. Typically, it is considered immoral for one person to promote his own well-being by poisoning his neighbor. If I were to slip some cyanide into my bosses drink, so that I could get his job after his untimely demise, this would generally be regarded as morally problematic. They would probably call it murder.

The prohibitions on interference allow a large company to purchase legislation in a South- or Central-American country where they can poison the people who live downwind or downstream of their factories, with no requirement to pay any compensation to those whose life, health, and property are damaged by these poisons. The prohibition in interfering in the internal affairs of these countries or basing our governments’ actions on their internal politics means that we do nothing if their government should adopt laws allowing the poisoning of its citizens for profit.


In good conscience, I cannot see anything particularly morally commendable on either side of this debate. There are advantages to be had from free trade. Free trade is a good thing. However, real free trade requires respect for the rights of each individual.

Effectively, we have two groups. One group is pursuing policies that condemn the people of Central and South America to poverty and want, as would be illustrated by forcing a person to live in the mountains without trade. The other group is pursuing policies that would allow those corporations to profit from the servitude of its citizens or to poison those citizens.

We need free trade throughout the Americas – genuine free trade, that respects the rights of each individual. At the same time, no country should ever sign a contract that says, “Regardless of the severity of the victimization that you engage in, I bind myself to do nothing but stand back and watch.”

1 comment:

Alonzo Fyfe said...

I read every comment that I get. I read them more than once.

I don't always respond. This blog writing is hard work. But I read everything.

I will look into the "recent comment" option. I have been thinking about that a bit recently.

I agree with everything you say. The "anti free-trade" label, however, is rhetoric. Using state power to gain the power to great workers like serfs or to poison them without offering compensation are not consistent with "free-trade", regardless of what the corporate rhetoric tries to paint it.