Home > Uncategorized > The “Free Traders” do not believe in free trade: #46,765

The “Free Traders” do not believe in free trade: #46,765

from Dean Baker

The concept of “free trade” has acquired near religious status among policy types. All serious people are supposed to swear their allegiance to it and deride anyone who questions its universal benefits.

Unfortunately, almost none of the people who pronounce themselves devotees of free trade actually do consistently advocate free trade policies. Rather they push selective protectionist policies, that have the effect of redistributing income to people like them, and call them “free trade.”

The NYT gave us yet one more example of a selective protectionist masquerading as a free trader in a column this morning by Jochen Bittner, a political editor for Die Zeit. Bittner contrasts the free trading open immigration types, who calls Lennonists (in the spirit of John Lennon’s song, Imagine) and the Bannonists who are nationalists followers of Steve Bannon or his foreign equivalents.

The problem with this easy division is that the “free traders” wholeheartedly support very costly protectionist measures in the form of ever stronger and longer patent and copyright protections. These protections redistribute several hundred billions dollars annually (at least 3 percent of GDP in the United States) from the bulk of the population to the small group of people who are in a position to benefit from these government granted monopolies.  

In the United States, the “free traders” in most cases also support the protectionist restrictions which severely limit the ability of foreign trained doctors and dentists and other high-end professionals from working in the United States. As a result of these protectionist measures doctors in the United States earn twice as much as their counterparts in other wealthy countries, costing us around $100 billion a year in higher health care costs.

The “free traders” in almost all cases supported the government bailouts of the financial industry which saved the banks from being held responsible for their own greed and incompetence. As a result of these bailouts a seriously bloated financial industry was protected from the market and was allowed to continue to siphon hundreds of billions of dollars annually out of the rest of the economy.

It is undoubtedly convenient for the self-professed free traders to ignore all the forms of protectionism that benefit them to the detriment of the rest of the society (including most of the “Bannonists”), but it is not accurate and it is not honest.

Yes, all of this is covered in my (free) book Rigged: How Globalization and the Rules of the Modern Economy Were Structured to Make the Rich Richer.

  1. C-R D
    February 25, 2017 at 4:54 pm

    The mainstream is singing the refrain of free trade for 170 years now. Your observations are right on the money. Have you noticed that they are also silent on sanctions.

  2. February 25, 2017 at 6:32 pm

    Free trade is trade without any agreements.
    Trade agreements is about trade with certain agreements
    => Free trade agreements = incoherent!

  3. Paul Davidson
    February 25, 2017 at 7:55 pm

    Keynes did not advocate free trade in mass production manufacturing industries. He believed such “free trade” resulted in unemployment in the higher wage trading partners. Only free trade acceptable in trade in natural resources and climate effected industries such as agriculture

  4. February 27, 2017 at 10:03 am

    As I’ve said on this site and elsewhere, free trade does not exist. Trade is always limited, controlled, shaped, directed, etc. Factors that control and shape trade include culture (religion, family, language. science, etc.), geography, war, disease/plague, weather, and others. So even if so called “free traders” actually believed in free trade (which they do not) and wanted to have it (which they do not) their desires would go unrealized. Trade, free or otherwise is always a reflection of the desires of the traders. Mostly that means a desire for goods, for wealth, or both. In other words, traders desire to get what they want from trade. Simply, to win with trade. Free trade as described by neoliberal ideologists puts all this in jeopardy. Neoliberalism is a convenient curtain behind which the wealthy elites can hide their control of wealth, business, and politics. But its mantra of free trade is not something they would ever agree to. This would threaten their very existence. But the mantra is a wonderful propaganda tool that not only explains why most ordinary folks lose with trade (they’re just not good enough to win) but keeps lawmakers from interfering with “free trade.” All and all, a big win for plutocratic oligarchy.

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