Many, many thanks to all those readers who have attempted to improve my
understanding of economics. If I am ever again invited to compare
Portuguese productivity of wine with British productivity of wheat, I shall
run screaming from the room.
I am sorry to say, though, that I am now more skeptical of Free Trade than I
was when we started.
I do see the point of comparative advantage, and the force of the large
general argument. However, it seems to me that the virtue of the thing is
so smothered in secondary factors as to render it wellnigh meaningless.
If country A has labor unions and country B doesn’t, can their trade be
“free”? If country A has a huge, avaricious and unscrupulous trial-lawyer
industry sucking the blood from its industries and country B doesn’t, can
they have “free trade”? If country A has a vast welfare state, minimum-wage
provisions, and generous unemployment benefits, and country B has none of
the above, only extended-family mutual support, is “free trade” really free?
How about a country like China, that makes extensive use of unpaid slave
labor (i.e. in prisons and labor camps) to supplement its manufacturing
prowess? Can we have “free trade” with them? Can we have truly “free
trade” with a nation like Mexico, where a racial elite maintains its wealth
and privileges via institutionalized corruption and illegality? I am
unconvinced. Applying free trade to the actual world looks to me a lot like
applying Newtonian mechanics-in-a-vacuum to the movement of objects
These negative impressions were reinforced when I consulted a friend whose
intellect I mightily respect. He:
“The theory of free trade has never been contradicted by history. As we all
know, the tremendous growth of the American economy in the 19th Century was
to Alexander Hamilton’s insistence that free trade be the absolute
cornerstone of our economic policy. Similarly, Bismarck’s insistence on zero
to outnumbered Germany almost conquering Europe in WWI with its free
trade-nourished industrial might.
“In contrast, Britain’s sad, slow economic decline after 1846 was due to its
rejection of its traditional free trade policy in that year and institution
“Oh, wait a minute… Those were the policies of America, Germany, and
Britain in the Bizarro reverse world. Never mind…”