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Free Trade is Common

Posted By Don Boudreaux On March 28, 2009 @ 9:53 am In Trade | Comments Disabled

Persons who, fancying themselves observant realists, insist that "free trade doesn't exist" have their visions and brains distorted by political boundaries.

It is quite true that national governments almost universally erect barriers that hinder their citizens' freedom to trade with citizens ruled by other national governments.  Some governments erect higher barriers than do other governments.  But, indeed, it's rare to find a national government that doesn't indulge the greed of politically powerful interest groups, as well as the prejudice and economic ignorance of much of its population, with trade barriers.

And yet free trade is ubiquitous.  Freedom to trade generally reigns within political borders.  For example, the 50 U.S. states are united on one very large and very successful free-trade zone.

Karol, Thomas, and I live in Burke, Virginia.  We are free to trade not only with cabbage growers in Culpeper, Virginia, but with cabbage growers in California.  We trade freely with residents of any state, from the Atlantic to the Pacific, from the U.S. border with Canada to the U.S. border with Mexico.  That is, whatever taxes and burdens Uncle Sam might impose (however wisely or foolishly) on economic activity within the U.S., those burdens are nation-wide.  No special space-specific burdens are placed on my and my family's ability to trade with other Americans; no extra tariff or restriction applies to our exchanges with an Alaskan or with a Floridian simply because we do not live in those states.

Practically speaking, therefore, there is free trade throughout the United States.  My family and I routinely buy wine from California and Oregon, oranges and lemons from Florida, computer software from Washington state, maple syrup from Vermont, peaches from South Carolina, television newscasts from New York and Atlanta, lumber from Alabama, spicy sauces from Louisiana, crabs from Maryland.  The list is long.

And yet no one, not even Lou Dobbs, insists that the Boudreaux family would be richer if only the government in Richmond could fine a successful way around the U.S. Constitution and managed to slap stiff tariffs on California wine, Florida citrus fruits, cajun seasoning from Louisiana, and you name it.

Surely the burden of persuasion is on those who would insist that each American would be more prosperous if only his or her state were better able to restrict trade with citizens of other states.  If this burden of persuasion cannot be met, then the case for free international trade is pretty solidly established.

Anyone skeptical of free trade must explain why political borders are economically relevant [1].  With the exception of pointing to (mostly rather vague and poorly considered) national-defense issues, protectionists have never managed — and I dare say never will manage — to impart genuine economic relevance to political borders.

Because all reasonably prosperous countries today impose no, or only very few, internal restrictions on trade, two facts stand: (1) free trade is in fact quite common, and (2) free trade is beneficial.

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