Sacks on trade

This was the best blog entry I have ever read. Now I gotta read that book.

Rabbi Sacks eloquent and commendable statement still misses the point that foreign trade does not cost but saves domestic jobs.

What of weaponized trade, where their benefit is to subvert one group (or at least have a credible threat to do so) in order to get to that point? That is, US citizens being subverted in favor of businesses who then go to Third World countries?

Another thing to ponder. Economic freedom is useless to the losers in society. So for a factory worker "Downsized" by the latest trends in innovation and recession, he has no interest in the economic-freedom of the capitalist. What he does have an interest in is a guaranteed income.

No one ever said freedom was a picnic. Everyone has an interest in a guaranteed income. What he does have is the opportunity to go out and do something to continue to create value for himself and society. In fact he has greater opportunity to do so in the United States than anywhere in the world.

I'm talking reality, not fantasy. Why do you think everything is trending towards socialism these days?

I love trade. I love self-interest as a motive for trade. I love economic freedom and detest the conceit of those who think that, through central control, they can engineer markets that will be superior to those forms that naturally arise when buyers and sellers pursue their own individual interests, using their own assets, assets built or earned with their own sweat or brainpower.

Having said all that, I am doubtful that I can tame, through an offer of trade, the homicidal inclinations of those who want to slay me and sell my children as so much chattel as a result of religious fervor.

To delude oneself into thinking that one can tame them -- or even hold them at bay -- is to risk the liberty that we cherish so much.

Do you think that giving Hitler tips on the efficient manufacture of Volkswagens would have motivated him to stop the slaughter of European Jews? I think not. What stopped Hitler was not an offer of trade, but Russian tanks bearing down from the East, and US tanks bearing down from the West.

Thank God we had those tanks. Thank God we had those tanks.

---Tom Nally, New Orleans

why did hitler come to power?

Just wondering what the point is here. This blog post states that it is through the love of trade and profit we gain peace and a better world but the letter before it stated that if we love prosperity over national freedom we will be slaves.

I am utterly lost here. And I think it comes from this worthy blog's author's confusion. He seems to think that the "markets" can be separated from the States. As we can see this is not the case.

Anyone who actually has been involved in major business can tell you that the first thing business tries to do is obtain profit at reduced risk. The key to profit is to get a better gain at a lower risk.

Markets will therefore ALWAYS force states to secure investments. Markets, if "let free" will pursue a double course of more and more risk while trying to force the state to underwrite this risk. What happened today in the EU is perfect example. World Markets essentially forced EU leaders to prepare to bailout Greece. If the EU governments fail to ensure Greece stability the free market will reduce the value of the Euro and EU stock markets until the economies of all G20 nations are put at risk. Speculators know they can, via a simple plan of selling stock, force governments to take actions they want to provide security via tax dollars.

I suspect Hayek, who was not always consistent, probably understood this but dismissed it as Marxism. Back in the Cold War any idea, even an observed fact, that could be associated with Marx could be dismissed. But after 30 years of free market reforms I think we all now should know how the markets work.

I put my life at risk diving my car, eating food, hell even when I wake up. The canard of "putting at risk" has been more mis-and-overused than just about any term by progressives and leftist.

Markets don't force states to do anything. Government and elected officials feel the need to inject themselves into markets. Politicians have the incentive to involve themselves in issues they have no legitimate business in and they do this for their own purposes.

But after 30 years of free market reforms I think we all now should know how the markets work.

Can you provide any evidence of this other than leftist talking points and political rhetoric?

SickOfHayek wrote:

Markets will therefore ALWAYS force states to secure investments. Markets, if "let free" will pursue a double course of more and more risk while trying to force the state to underwrite this risk.

And then SickofHayek offered this example:

What happened today in the EU is perfect example. World Markets essentially forced EU leaders to prepare to bailout Greece. If the EU governments fail to ensure Greece stability the free market will reduce the value of the Euro and EU stock markets until the economies of all G20 nations are put at risk.

Your example doesn’t support your claim.

In the first place, the markets didn’t force Greece to run its debt up to unsustainable levels -- the Greek government did that all on its own. So that is not an example of markets pursuing “more and more risk”. It’s an example of a government attempting to evade economic reality.

In the second place, the free market doesn’t have the power to force anyone to do anything -- because the state has a monopoly on the legal use of force.

If I decide to sell the stock I have in your company, because, say, you’ve become a drug addict whose judgment I no longer trust, that does not mean I have the power to force to force the value of your stock down. If I can persuade -- and remember, I have no power to use force -- if I can persuade others to also sell your stock, and there are fewer buyers than there are sellers, then yes, the value of your stock will fall, but not because I’ve forced anyone to do anything.

The same applies to Greece’s situation and the value of the EU stock markets.

And SickOfHayak concluded:

But after 30 years of free market reforms I think we all now should know how the markets work.

What “free market reforms”? Many thousands of pages have been added to the Code of Federal Regulations over the last 30 years. Some individual markets may be less regulated now, but overall the amount of government regulation on economic activities has grown enormously in the last 30 years.

You deride "markets" like they're some villain that needs squashing. I remind you who provisions your food, shelter and other goods you enjoy. Yeah the evil "markets".

30 years of market reforms? There's more rhetoric about the market as the state gets more and more powerful. And yes, a more powerful state serves the powerful. I'm glad we didn't put price controls on gasoline. I'm glad there is a little more airline competition. But overall, do you really think the expansion of the state has meant more freedom?

I am not in favor of markets per se but economic freedom--freedom to buy and freedom to sell and freedom to associate and freedom to exit. The growth of the state typically restricts these freedoms. The growth of the state encourages businesses to use force to gain profits rather than earning those profits. We're on the same side. At least we could be.

russ,

I agree that expansion of the state has interfered with normal market workings, even in the two industries you mentioned.

Airline travel price changes and routes are no longer restricted by the government, and that's wonderful. But that same government interfered with markets by guaranteeing the PBGC would absorb the pension costs of United and U.S. Airways. That government interfered with markets by granting post-9/11 loans to U.S. Airways and America West but not to United.

Our government did not enact price controls on gasoline. Except that they did control prices at exactly the time when prices most needed to be free. That was when my brothers and their families were trying to evacuate southeast Texas in advance of Hurricane Rita but could find no gasoline.

The only way to stay sane on this issue is ask ourselves a simple question. Which markets are truly free? I'd submit none of them are, as even the wildly successful PC industry has onerous environmental regulations imposed upon it.

So maybe the more correct question would be - "which markets are the most free"? Technology, fashion, retail(Walmart, Target). Honestly I can't think of much else. As soon as you go into heavy industries, the yoke of government regulation becomes crushing.

And then there's city control of airports and landing slots. I assume
Southwest can't open its own airport. I assume they'd like to...

Well Russ, we know that the free market could never implement air traffic control! Well we never let it try, but it must be dangerous to allow that to happen!

OMG. Cannot believe I forgot to mention that.

If anyone wants evidence about how government inhibits market functioning in the U.S., just wait until 2014. That's when the last remnants of the Wright Amendment restrictions on Dallas Love Field flights are lifted. My prediction: airfares for Dallas travellers will plunge.

My take is that in the previous post Samuel Adams was referring to the security of the landed classes/aristocracy who would benefit from the continued protection of the crown and by loyalty to Britain favored their own prosperity over the freedom and prosperity of the general population. (Special interests anyone?) I like the Sacks quote because it is a real instance where diversity actually is strength--unlike in all the multi-culti speak where diversity is our strength but we're not exactly sure how.

beautiful and 100% true.

I am totally fascinated with Rabbi Sacks quote in your podcast:
"Trade makes diversity a blessing"
As a programmer, I think the concept also applies to software design as well and really doesn't it apply to all sorts of design?
The diversify in people gets reflected in their designs and we are able to see what works well and what doesn't.

"If the price of war has become too high, which it has, we will have to value the habits of trade . . ."

This was the prevailing of why people then thought the Great War should be have been the last war . . .

Gil - why do you generalize? Only the British & French became pacifist after WW1. The Germans, Spanish, Italians, Russians only became more militaristic and war-hungry after the "Great War". The fact is we in the west are a bunch of sissies compared to people like Afghans who can withstand war-like conditions indefinitely.

Are you like Yoda in SW: ATOC?

"Thankfully the Great War is over people will now have to accept peace because war is now too destructive."

"Over, say you? The seeds of an even Greater War have planted be they. The shroud of Dark Side is covering the entire world."

Also RE:"If the price of war has become too high, which it has"

I'd also like to see some data around that statemant.
The financial cost is high, but casualty rates (for the US) have dropped with each war.

Civil war
WW1/WW2
Korea/Vietnam
Iraq/Afganistan

Protest sentiment also seems to be fading, and the victorious left wing candidate of our last election is pro war for now. Has political cost also declined?

Trend is for more treasure, but less blood sweat and tears.

He's only pro-war from the standpoint of murder-from-the-skies, which is quite dishonorable.

Aw read what I actually wrote dingus. Besides what would you say to all of the mothers of WW1 who were pro-conscription because they hated the fact there were abled-body men who were choosing not to die for their country when others were?

Who's to say victims hate wars? The romance of war included the victims happy that they were killed by someone who was better than them. It was in World War 1 that soldiers claimed that aerial battle was the last honourable battleground as it was the last place left where it was the duelling of skills as opposed to the mass random slaughter of ground troops.

Gil,

In naming me, my parents honored their two aviator brothers who were killed in World War II. By all accounts from my parents, aunts, and uncles, my two grandmothers were devastated at the loss of their sons, and remained so for years until their deaths. Those who valiantly give their lives in defense of their countrymen are not the only victims of war. There was nothing romantic about the severe grief sufferred by my grandmothers.

Geez, why not get out the violins of the widows who lived a long life of loniless because their husbands/fiancees died in the Great War? It must blow your mind that there were boys who faked their age to into the war.