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Unilateral free trade in mainstream media I have been banging on for weeks to anyone who will listen that all this talk about the importance of getting good trade deals is nonsense. All that is needed is unilateral free trade.
Just now I stumbled upon an article in the Guardian, of all places, discussing just that. Even talking about “the unilateral free trade option”.
A group called Economists for Brexit seem to have got it in the paper. Jolly good work!
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Completely agree that unilateral free trade is the best ammunition we have against attempts by the European Union to constrain us into their outdated mechanisms of restraint.
The German manufacturers will be licking their lips with anticipation as will manufacturers and exporters across the Anglosphere.
Unlike access to the European Union’s single market with its boundless universe of regulations this can be encompassed in a brief statement of intent. BRExit will involve unwinding our involvement in the European Union in numerous ways, but the trade one is clear.
Leave the signed unilateral free trade deal on the table and walk away. Job done. Cannot be beaten and cannot be held hostage as there are no tariffs, quotas, taxes or duties.
Any legitimate economist, (one who is (a) not incompetent, and (b) not infused with politics first, economics second) will have to admit that free trade (which is unilateral by definition) is the best way to go about economically fueling a nation. Politics just gets in the way of what would otherwise be maximizing opportunity to engage in profitable trade.
When trade is purely economic and rational, there’s no need to “give back” to some assumed wronged party, there’s no “trade deficit” because every trade is a win for both parties involved and both parties are better off for making the trade than they were before.
But one caution, trade is NEVER free in a “planned economy” i.e. mixed economy. As Ayn Rand said, there’s no compromise between food and poison.
One of the fun parts would be watching the rEU nations fighting amongst themselves over what tariffs to impose on the UK.
Thailover, we are shooting for free-er trade. This is the best we can ever hope for in this murky world.
Oh, you’re going to LOVE “Universal Free Trade” with the China, Taiwan, and assorted Pacific rim folk. I hear Venezuela is a hot market for paper products right now, in exchange, you can get…um….um….
Well, let’s just say an economy based on planned obsolescence, and “disposable”, better have a place to put the mountains of rapidly accumulating garbage.
Mindful that SOME blossoming manufacturing sectors will take it…for a fee of course.
It would be wise for the new government to appoint, with much razzle, lots of economic advisers who are keen on unilateral free trade, even if the government really really really wants to stay in the single market.
But given Cameron’s effort at “renegotiating” before the referendum, it’s pretty obvious that no one in the civil service has been on the Negotiating 101 course.
That is a bit of an overstatement — only a bit, mind you.
It seems to me that the UK can simply declare unilateral free trade PROVISIONALLY, and then threaten the EU, and anybody else who does not reciprocate, with retaliation of some sort. (Not necessarily tariffs.)
That does not solve all Brexit problems, though: there are rEU people working in the UK on EU grants, British people working in the continent on EU grants, rEU students in UK universities, British students in continental universities, and all sorts of other complications that i don’t even know about.
As Ayn Rand said, there’s no compromise between food and poison.
And of course she was wrong. Lots of food is toxic. Animals have evolved both biological and behavioural adaptations to deal with the toxins in their diet.
Basic techniques include – eating the less toxic parts of a plant, eating young leaves before their toxin defences are well developed, not eating too much of one type of plant at a time and either taking a break or eating something different for a while, eating a mineral that has chemicals which counteract the toxin. And so on.
In fact her point is so wrong that it’s a splendid illustration of a real economic truth – pretty much any product has its downsides as well as its upsides.
Of course unilateral free trade is the optimal structure, but it’s never going to happen. True free trade gives the politicians nothing to “trade”; not only does it render them useless but powerless. And that is simply unacceptable. So they will continue making the (false) argument that a trade deficit is bad, and we have to protect domestic industries (and jobs) from “unfair” foreign competition, and we need to protect the public from shoddy foreign goods, etc., and there are enough economically ignorant people (including far too many soi-disant “economists”) who will buy that argument (witness CaptDMO’s comment above) that they will prevail. Then it will be business as usual: “managed” trade that permits politicians to bestow favors. You won’t win.
Well, if the Guardian mentions it, shouldn’t we do the opposite? Isn’t the Guardian almost automatically wrong?
Lee Moore, X is a poison if it is indeed a poison. Drinking water isn’t poisonous, but drinking 5 gallons in an hour is. What defines something as a poison is dosage rather than specific content. Indeed, this is the difference between the medicinal and the toxic…dosage.
Doesn’t immunisation work by giving you a milder version of a poison or infection, thus making you stronger when your body learns how to counter-act it? Did Ayn Rand believe in immunisation programs?
And/or reciprocally-free trade: trade with you as freely as you want with reciprocity.
I think the free-trade thing is a little over sold as to the benefits. If there was a relaxed regulatory and low tax environment, sure, free trade can flourish. But when our own industry is tied up in huge costs not faced by any 3rd world competitors then we see all our lower skilled people put out of work permanently. I’m not convinced that 15 or 20 percent of the workforce sitting on government benefits so that we can have cheap chinese steel is in fact to our benefit. For the users of steel perhaps, not so much for the nation.
You think South Korea or Japan are 3rd World? But more to the point, what makes you think there are not other things lower skilled people can do? Maybe if states did not tax and otherwise discourage employment that might be rather easier to do.
No, it most definitely is. Do you think building does not benefit the economy as a whole? You seem to be of the misapprehension that industry exists to create jobs, but it does not and should not. Jobs are a consequence of economic activity, not the objective of it.
Nich, LOL, infection isn’t poison.
Ah, an anti-free-trade argument by Mr Black on the basis of jobs. Slightly surprised to see this here, but still, it’s always nice to see logical fallacies in the wild.
Jobs are a cost (not just a consequence of economic activity, but actually a drain on it) – we, the consumers, have to pay the costs of employing the people who make things or provide things (or shuffle pieces of paper around to slow things down – I’ve not had a productive morning…). So to oppose free trade on the basis of protecting costs is clearly being against the consumer, and therefore the individual, in favour of the vested interest of those with a job that might be threatened.
And last time I checked steel was a key part of the modern world, so cheap steel kindly paid for by the Chinese (who are effectively subsidising us for the cost of the labour and production) is surely to our benefit, as it reduces infrastructure costs to all of us.
Never trust an argument based on preserving jobs. Apart from the fact this is ignoring market information that the job is not worth preserving (and therefore shows the fallacy of assuming you are better informed than the market), so long as you are looking for optimal economic outcomes then the less jobs to produce anything in an economy the better.
Indocations from Australia are that it and perhaps its friendly neighbour film set/farm/vineyard/rugby pitch are already looking at a free-trade deal.
Put simply, ‘Yes, we can.’.
And as the BBC notes: