Tag Archives: free trade

Vox Day: Free trade often linked to war

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The provocative (some would use much harsher terms) Christian libertarian writer Vox Day pokes a hole in the venerable libertarian mantra –  free-trade uber alles:

“China and Japan have only been trading since diplomatic ties were normalized in 1972; China became Japan’s largest trading partner in 2004. A war between two of the world’s largest economies would permanently shatter the oft-heard argument that trade eliminates the possibility of war. It’s an argument that should always have been dubious, however, as England’s many wars against the various principalities in India and the USA’s Middle East wars have all followed the inception of large-scale trade with the region.

Once more, we see that free trade delivers precisely the opposite of what it promises. And, as Generational Dynamics adroitly points out, trade actually expands the range of warfare as well as providing an economic weapon that can be wielded against the trading partner. Even when trade is not a cause of the war, it provides a means of fighting it.

Lest anyone think I am setting up a strawman here, consider this article by a free trade advocate at the Mises Institute: “The Classical Liberals of the nineteenth century were certain that the end of the old Mercantilist system–with its government control of trade and commerce, its bounties (subsidies) and prohibitions on exports and imports–would open wide vistas for improving the material conditions of man through the internationalization of the system of division of labor. They also believed that the elimination of barriers to trade and the free intercourse among men would help to significantly reduce if not end the causes of war among nations.”

Vox Day: Free Trade Violates The Property Rights Of The Nation

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Christian libertarian Vox Day turns propertarian arguments against free-traders:

“In the comments, PG constructed an interesting and effective logical argument against free trade, which I have organized thusly:

1. Free traders insist upon the existence of property rights and the sovereign exercise of those rights as axiomatic. From this foundation, they argue that all actions concerning with whom one will trade, regardless of their location or nation, are protected by those property rights and cannot be morally infringed.

2. If a group of people happen to share the rights to a property in an ownership group, they must decide together on how those rights are exercised. No single individual can sell the property or permit its use by others without the agreement of the other rights holders. The ownership group collectively has the right to decide who and what are permitted to enter their property. It is not an infringement of any one owner’s property right if the greater part of the ownership group does not wish to sell the property or to permit entry to certain parties or items.

[Lila: Libertarians and classical liberals would argue that property rights cannot be exercised by an abstract collective entity like “the nation” and can only be exercised unjustly by any government that claims to represent the nation.]

3. A nation is a group of people who share a common property that is delineated by the national borders. This group of people must therefore decide in some consensus manner how the rights to that property are exercised. They can therefore decide who and what are permitted to enter the national property in precisely the same manner that a house-owning group decide who and what are permitted to enter their house. It is not an infringement of any one individual’s property right if the greater part of the nation does not wish to sell the land possessed by the nation or permit entry to certain parties or items.

4. To deny a nation the property right to enact tariffs or refuse permission for goods, capital, or labor to cross its borders, is tantamount to either denying a) property rights or b) the nation’s existence.

[Lila: Rather than enact laws against the property rights of companies wanting to trade under the present “managed trade” regime, it might be more conducive to freedom to undo the subsidies that currently exist, whether in the form of fixed prices, welfare, preferential tax treatment,  or any other grant by the government.  Doing so, would probably make it far less beneficial for some companies to trade, discourage some movements of labor, and generally have the same effect as a sanction or tariff, without needing to invoke group property rights.]

5. However, denying the existence of nations is not only empirically false, it creates a logical contradiction for the free trader because it requires denying the individual property-owner the right to form collective property-ownership groups from which nations are made. The free trade position depends upon the idea that individuals possess property rights, but groups of more than one individual cannot.

6. Therefore, free trade doctrine requires the denial of the very property rights upon which it is founded. As PG correctly concludes, “their whole argument is an outright logical contradiction”.

As evidence in support of PG’s logical construction, I offer the following statements concerning the existence of nations from two champions of the dogma, Mr. Gary North and our own Unger.

North: “Defenders of tariffs present themselves as defenders of the nation, when in fact the nation, from the point of view of economics, is not a collective entity. The nation, from an economic standpoint, is simply a convenient name that we give to people inside invisible judicial lines known as national borders.”

Unger: “I do not consider myself an ‘American’, except as a verbal convenience, or have any care at all for ‘America’.”

Now, it can certainly be pointed out that the mere existence of a nation does not mean that all of its members are voluntary members of it and it cannot be denied that the legitimate property rights of the nation can be abused or ignored just as they are in the case of individual property rights. But PG’s logic suffices to demonstrate that the property rights argument upon which many free traders heavily rely is far from the conclusive one that they believe it to be.”

[Lila: A version of this argument was made by David Boaz in reviewing the movie, Avatar]

China Defies US And Sells Gasoline To Iran

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The Sino-US trade wars are heating up. On Friday, the US announced that it would impose stiff duties on Chinese-made oil country tubular goods, which are steel pipes used in the oil industry.

“According to US data, the OCTG trade case is the largest in US history against China imports valued at more than $2.6 billion in 2008 and about $1 billion last year.”

China responded on Tuesday with anti-dumping duties against the US and Russia:

“China has imposed anti-dumping and anti-subsidy duties on a U.S. specialty steel product, and also hit Russia with anti-dumping duties in the same case, its customs administration said.

U.S. producers will be assessed anti-dumping duties of up to 64.8 percent and anti-subsidy, or “countervailing,” duties of up to 44.6 percent on the grain-oriented electrical steel, it said on its website on Monday.

Grain-oriented electrical steel, also known as grain-oriented silicon steel, is used for the cores of high-efficiency transformers, electric motors and generators.

The state-backed China Chamber of Commerce of Metals, Minerals and Chemicals Importers and Exporters hailed the Ministry of Commerce’s April 10 ruling, which the Ministry has not yet publicly announced, state news agency Xinhua said.

“During the investigation the Ministry found that U.S. producers had received subsidies by the U.S. government, and their unfair competition hurt Chinese producers,” Xinhua said, quoting an unnamed person at the chamber of commerce.”

Meanwhile, China also announced its first trade deficit since May 2004

“According to the statistics from the General Administration of Customs, China’s exports were valued at US $112.11 billion in March, up by 24.3 percent year on year, while the imports were up by 66 percent to US $119.35 billion, trade deficit were US $ 7.24 billion. This is the first monthly trade deficit for China since May of 2004.”

What’s interesting is that this trade row with the US isn’t necessarily a sign of rising protectionism in China, as the media often reports. It seems to signal a move toward more trade with emerging markets in Asia and elsewhere. Thus at the recently concluded Boao Forum for Asia, (the Chinese Davos), the Chinese Vice-President called for open markets and not protectionism. Of course, this isn’t free trade, by any means, but state-driven mercantilism. It remains to be seen whether that is any better than state-driven protectionism.

Another example.

While some top oil-exporting countries have curbed their exports to Iran to avoid penalties from the US, state-owned Chinaoil has sold two cargoes of gasoline to Iran in defiance of the US, the first direct sales since January 2009.

As Russia has hardened its position and moved closer to the European and US stance, the Chinese move has become crucial for Iran. Iran continues to be the fifth largest exporter of crude in the world, but US sanctions have meant that its refineries have suffered from lack of foreign investment and it now relies on the world market for its gasoline needs.

Sir James Goldsmith: GATT, Nukes, Agribusiness Devouring Society

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Sir James Michael Goldsmith, Anglo-French financier and corporate raider of the 1980s, is most infamous for taking over Goodyear Tires and restructuring it, thereby putting its many employees out of work.

In this deeply prophetic interview with Charlie Rose in 1994 he discusses his book about globalization, The Trap, and displays a more humane side of his complex intelligence.

In the earlier part of the interview (not shown here), Goldsmith gets into a heated debate with Clinton economic honcho Laura Tyson over the benefits of NAFTA and GATT in which Tyson comes off as both naive and uninformed.

In another part, Goldsmith calls Indian physicist and environmental activist Vandana Shiva “remarkable” and asks why it is that global “free” trade, supposedly so beneficial to developing countries, was protested widely and vigorously by huge numbers of people in India.

Take away points from the interview:

*This (globalization) is the establishment against the rest of society

*I am for big business until it devours society

*Big business loves total access to unlimited give-away labor

*In every developing nation you have a handful of people who control everything, the oligarchs

*This (globalization) is the poor in rich countries subsidizing the rich in the poor countries
(Lila: I’d add that the poor in poor countries are also subsidizing the rich in rich countries)

*Free trade within homogeneous regions is to be preferred to global trade
(Lila: This coincides with something I’ve advocated for a while, on the principle of subsidiarity)

*The European parliament is a force for pseudo-democratic institutions

*It’s already fixed by the two main parties, the Christian Democrats and the Socialists

*The people have a right to vote on the single most important economic decision of their life times

*Here in the USA we’ve had no debate on it (GATT) while we’ve had a huge debate about NAFTA which was a pimple

*GATT is going through because business wants it
*It’s a fix here (the US), as it is in Europe

*We’ve allowed instruments that are supposed to serve us to become our masters

*GATT is an example of how an economic doctrine is going to destabilize our society

*Nuclear is another example. Here in Europe, we’ve not been allowed to discuss this disastrous form of energy, disastrous in terms both of economics and in terms of security

*Corporate agriculture is a third example of how we are destroying our societies

*The ruling machinery of government power in Europe is imposing this (GATT) without a debate

China Files WTO Complaint Over US Tire Tariffs…

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In the news:

“Beijing filed a World Trade Organization complaint Monday over new U.S. tariffs on Chinese tires, stepping up pressure on Washington in the latest in a series of trade disputes.

The conflict is a potential irritant as Washington and Beijing prepare for a summit of the Group of 20 leading economies in Pittsburgh on Sept. 24-25 to discuss efforts to end the worst global downturn since the 1930s.”

More here at AP.
My Comment:

Begin the trade wars..or rather, so continue the trade wars.
America dumps subsidized farm products in China, China levies penalties on exporters who don’t use 40% Chinese parts in their products….it’s all part of the effort to shore up exports to prevent the economy of either country from sliding further into depression…