Posted on 05/29/2007 10:45:13 PM PDT by goldstategop
Some people hate me because I defend free markets. Once someone accosted me on a New York City street and said, "I hope you die soon."
Why the hostility to commerce? What could be more benign than the freedom to trade with whomever you wish?
I suspect ignorance about economics leads many to believe that when two people exchange goods and money, one wins and the other loses. If rich capitalists profit, the poor and the weak suffer.
That's a myth.
How many times have you paid $1 for a cup of coffee and after the clerk said, "thank you," you responded, "thank you "? There's a wealth of economics wisdom in the weird double thank-you moment. Why does it happen? Because you want the coffee more than the buck, and the store wants the buck more than the coffee. Both of you win.
Economists have long understood that two people trade because each wants what the other has more than what he already has. In their respective eyes, the things traded are unequal in value. But this means each comes out ahead, having given up something he wants less for something he wants more. It's just not true that one gains and the other loses. If that were the case, the loser wouldn't have traded. It's win-win, or as economists would say, positive-sum.
We experience this every time we have that double thank-you moment in a store or restaurant.
It doesn't matter that you wish the price of coffee were lower. We want the price of everything to be lower (except the price of what we're selling, whether it's our products or labor). What matters is that you bought the coffee for a buck.
The story doesn't change if you buy from someone in another city or another state. It doesn't change even if you buy from someone in another country.
That's why I worry when I hear politicians say things like, "I believe in free trade, but it has to be fair trade". That particular quote is from a presidential contender, Mike Huckabee, former governor of Arkansas.
"Fair trade" is code for protectionism disguised as retaliation against other countries that may or may not practice protectionism, and it's a bad sign when even Republicans talk about "fair" rather than "free" trade.
We should practice free trade no matter what others do. Why? Because freedom is good in itself. If foreign governments want to hurt their citizens, it's no reason for ours to hurt us.
People who live in different countries are divided by a political boundary, but boundaries are accidents of history or the results of politicians' arbitrary decisions. Political boundaries are economically irrelevant. When left free, people trade across them as naturally as they do across state lines. Trade is trade. Buyer and seller both benefit. "Thank you." "Thank you ."
If you're worried about a trade deficit with, say, China, imagine that China became the 51st state. We'd immediately forget all about that so-called deficit. Who cares if New York runs a trade deficit with Pennsylvania? As Adam Smith wrote, "Nothing . . . can be more absurd than this whole doctrine of the balance of trade."
Sheldon Richman expands on these ideas in The Freeman magazine, writing, "In reality, then, there are no imports and exports. There is only what I make and what everyone else makes. ... Few people would want to live just on what they themselves could make."
Once we choose trade over self-sufficiency, we're just arguing about how big the free-trade zone should be. Since trade is always mutually beneficial, the answer is: The bigger the free-trade zone the better.
Worldwide is best of all.
Next week I'll report on the orgy of hand wringing and commerce-hatred fed by media reports of this month's new "record price" of gasoline. By the way, it's not a record.
Show me just what Mohammed brought that was new, and there you will find things only evil and inhuman, such as his command to spread by the sword the faith he preached." -Manuel II Paleologus
Capitalism without any sense of national loyalty, ethics, or morality is, in reality, CRAPitalism.
Stossel is a 1969 graduate of Princeton University, with a B.A. in psychology.
Somehow, I think he forgot the fact that our wonderful "trading partners" are importing poisoned food; lead-laced bibs; and other generally unsafe products.
I am certain that we taxpayers will soon be asked to bear the "cost" of more stringent inspections; we couldn't possibly ask that of the businesses that are actually importing said products and ingredients. Kind of like we pay for the social costs of "cheap" labor. This is a "wealth redistribution" scheme...from the middle class to the politically-connected class.
Of course, this doesn't even begin to touch on the fact that we are funding the military of a Nation that makes its evil intentions upon us quite clear on a fairly regular basis.
He goes on to blather about "tort reform." I never thought I would say this, but having seen this ridiculous scheme in full-blown action for the last few years...the lawyers may be our last line of defense.
Right, and there is where John’s argument fails. “Fair Trade” is not code for anything other than fair trade. World economics and World Trade are a bit more complex than “double thank you” at a coffee shop, I am afraid. We want a product and we do indeed gain something for our money, but, price rules the market for the most part. Therefore when one entity is using morally bankrupt means to manufacture or produce product or is acting unfairly to have the lower price, gaining an advantage in the marketplace, that is where free trade ends, and unfair trade, begins. I like John, but he went a bit far on this one. The concept is not a difficult one. It’s very much like calling the Boston marathon a free race and someone taking a cab to the finish line, and then John saying, “well we got a race, it doesn’t matter if others didn’t play fair and won, it was still a race.
In the course of my various lurid fantasies, I have devoted some time to improving on this tired formula, which saw its heyday in BROADCAST NEWS. I hit upon the idea of fixing someone with an evil eye and pronouncing to them, "You have cancer."
All such fantasies have their drawbacks, and in this case my fear is that I would be sued for assault.
“Stossel is a 1969 graduate of Princeton University, with a B.A. in psychology.”
I have been an international trader for 28 years.....
There IS no Free Trade
There IS no fair trade.
Send Gomer Pyle back to Princeton.....he belongs there : )
Stupid turd : )
B U M P
I believe in checks and balances. The American people need to be protected from the abuses of big business as well as big government. The American people have benefited from the child labor laws and The Pure Food and Drug Act of 1906, for example. It turned out that slave labor and adulterated food were bad for business, contrary to what the best minds in industry thought at the time. So too, is unrestricted immigration of criminals and terrorists, but La Raza, Bush, and Larry Ellison haven’t yet caught on.
Good article. Sad to see that most of the Freepers responding do not really support free markets. If they don’t like Stossel because he doesn’t have an economics degree, they could try Walter Williams or Thomas Sowell, or subscribe to Freeman magazine from the Foundation for Economic Education, where you can read commonsense articles on liberty by economists every month. All would echo Stossel’s principles.
I have had enough of China’s trash that they call “food”. I want any ingredient in any product coming from China on the label, so I can avoid it.
Could not have said it better myself!
Globalisim (world trade) is NOT going away, it's been around (in one form or another)since the begining of the human race.
So you want to be free to trade or not trade with China, right? The decision not to trade is part of free trade.
"Stossel is a 1969 graduate of Princeton University, with a B.A. in psychology."
If you don't think Stossel is educated enough on the subject, perhaps you'll also take issue with Milton Friedman, a PhD in Economics, who has won the Nobel prize and is responsible, in a big way, for the incredible economy we enjoy today.
What most people really object to when they object to a free market is that it is so hard for them to shape it to their own will. The market gives people what the people want instead of what other people think they ought to want. Underlying most arguments against the free market is a lack of belief in freedom itself.
-- Milton Friedman, Wall Street Journal, May 18, 1961
Now for some contrast:
"The unfettered free market has been the most radically destructive force in American life in the last generation."
-- First Lady Hillary Clinton on C-Span in 1996 stating her troubles with the free market
"Too many people have made too much money."
"We're going to take things from you for the common good."
--Hillary Clinton
I know whose side I'd rather be on. You?
No.
Because there is no free trade, in the pure sense of the term, we shouldn't pursue free(r) trade? Are you saying protectionism works and that people cannot be trusted to act in their own self interest?
There IS no fair trade.
So when a willing buyer and seller come together to freely execute a trade, and doing so benefits both parties, that's not fair?
I don't think Stossel's the Gomer here.
Well, Stossel also said that Michael Milken had a better impact on the world than Mother Theresa...
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