Out of Control Policy Blog

Free Trade as Economic and Social Development Driver

A couple of weekends ago, Matt Ridley had a piece in the Wall Street Journal noting “that human collaboration is necessary for society to work; that the individual is not—and has not been for 120,000 years—able to support his lifestyle; that trade enables us to work for each other not just for ourselves; that there is nothing so antisocial (or impoverishing) as the pursuit of self-sufficiency; and that authoritarian, top-down rule is not the source of order or progress.”

There are currently three free trade deals pending approval from Congress. We looked at each of them this past week on the OOC blog, noting the positive and negatives in the deals.

In each case, the negatives were ways in which the FTAs failed to fully advance trade and individual freedom, or overly relied on authoritarian ideas that have the effect of limiting collaboration. Still, the trade deals would do a lot of benefit the American economy and job market.

The United States should not stop with these deals. There no good reasons to oppose advancing more bilateral trade talks, such as a Transatlantic trade pact or FTA with a nation like Turkey. The problem is that the White House isn't really a big fan of free trade. Jagdish Bhagwati wrote last week:

America’s president is captive to the country’s labor unions, who buy the false narrative that trade with poor countries is increasing the ranks of the poor in the US by driving down wages. In fact, however, there is plenty of evidence for the rival narrative that rapid and deep labor-saving technological change is what is putting pressure on wages, and that imports of cheap labor-intensive goods that US workers consume are actually offsetting that distress... Again, someone needs to tell Obama that imports create jobs, too, and that his emphasis on promoting US exports alone is bad economics.

Also, see the whole Ridley piece here and check out some of Ridley’s interviews with Reason.tv:



Anthony Randazzo is Director of Economic Research


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