Quotation of the Day…

by Don Boudreaux on July 30, 2011

in Competition, Complexity & Emergence, Trade

… is one that I used in this long-ago (from 3 June 2004) post here at the Cafe.  It’s from page 135 of Will Durant’s 1939 book The Life of Greece:

The crossroads of trade are the meeting place of ideas, the attrition ground of rival customs and beliefs; diversities beget conflict, comparison, thought; superstitions cancel one another and reason begins.

Opponents of free trade literally are unreasonable.  No matter how “progressive” they fancy themselves to be – a fancy fueled by the asinine yet apparently attractive notion that society progresses the more individuals’ wills and actions are bent (with force, if necessary) to conform to the will of the state – opponents of free trade are peddlers of backwoods stupidity grounded as firmly in ignorance and inability to reason as it is in atavistic fears and superstitions still lingering from our tribal past.

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{ 96 comments }

juan carlos vera July 30, 2011 at 4:57 pm

I know that “free trade” is the only successful proven prescription for peace and lasting prosperity…

jdcllns July 30, 2011 at 5:01 pm

Wow Don! You’re kind of ambiguous in that last paragraph about how you feel.

Krishnan July 30, 2011 at 5:12 pm

I am looking for an example – someone (economist, politician, Governor, Senator …) who used to argue against free trade but after listening to (or reading) Milton Friedman (or others) changed their mind – that they reasoned themselves back to the merits of free trade. The opponents of free trade are, I believe, stuck to their position because they benefit from it.

If you want to hear “unreasonable” arguments against free trade, listen to some of the discussions at the end of each Free to Choose episode – and listen and learn as Milton Friedman destroys their arguments. It is fascinating to watch Milton remind the audience that he is not pro business but pro free market – and reminds us as to why Big Business and Labor Unions often work together to erect tariffs on imports and go seek preferential treatment from GOVERNMENT – Capitalism is NOT about the creation of Multi National Corporations (as some seem to think) – and Milton Friedman argues powerfully about how monopolies come into existence OR are created BECAUSE of Government intervention.

I am convinced that we cannot change the minds of the restrictionists – they are impossible. I can only hope that we can survive and grow inspite of their best efforts to destroy wealth creation and the ability of the individual to pursue his/her own goals.

Don Boudreaux July 30, 2011 at 5:18 pm

Well-said. I fully agree.

DG Lesvic July 30, 2011 at 6:07 pm

In The Secret Knowledge, David Mamet wrote,

“I had never knowingly talked with nor read the works of a Conservative before moving to Los Angeles eight years agao.

I am indebted to very patient friends and teachers I met here, who inspired me to seek some understanding of the political process.

I would particularly like to thank Endre Balogh and Rabbi Mordecai Finley. They introduced me to the works of Milton Friedman, Friedrich Hayek, Thomas Sowell, Shelby Steele, and, so, began my efforts at self-education; and to Jon Voight, who, among other acts of kinderss, gave me Whittaker Chambers’s Witness.”

Krishnan July 30, 2011 at 6:40 pm

I was aware of Mamet’s “conversion” (thanks for the reminder) – I have to say that I am astonished that a film maker, a writer, someone who has lived in the US for all these years – was so, so unaware of the existence of Milton Friedman and Thomas Sowell and others … It was not as if Friedman was some unknown economist – His name used to come up everytime some tyrant somewhere did something terrible and the left used to rejoice in laying the blame on Friedman (Re: Chile and all that) – So, the left WAS aware of Milton Friedman and his ideas on free enterprise, free markets and the idea that people SHOULD be free to pursue their own goals, ideas …

I am glad, finally he found some people, books that made sense to him – more than that of the crazies he hangs out with …

If Mamet’s life before his book was simply a reflection of his not knowing that there was an alternative to what he used to think – fine – it can happen …I can sort-of-believe it … We all have gaps in our knowledge and view of the world … but yea, I am astonished at Mamet’s conversion after all these years

Now, if Obama were to make a speech and extoll the virtues of a free market and how Keynes was wrong and the way to growth is by eliminating regulation and removing tariffs and signing more free trade agreements – and let people pursue their happiness – and all that … now THAT would be even MORE astonishing … The earth may stop spinning on it’s axis if that were to happen …

DG Lesvic July 30, 2011 at 8:53 pm

You youngsters today have no idea how different the intellectual climate was fifty, sixty years ago, and how much better it is today thanx to Friedman and the others.

So don’t sell their work short.

Keep selling it.

Krishnan July 30, 2011 at 10:08 pm

Re: DG Lesvic – When I listen to the discussions at the end of each “Free to Choose” – and I listen/read to some of the idiots parading as experts today, I am dismayed … depressed almost. I wonder – What will it take to have some of these idiots actually look at data and open themselves to the wisdom of Friedman and others? I suspect there is nothing we can do. What I do hope is that with the exception of perhaps a fraction of the population, most people will wake up to the idea that letting people free to do what they want without government intervention is the way to growth and a future … That while there is a role (limited) for Government, it must be limited and well defined.

I worry that we may be in an era of inexorable decline – that so many people are now so dependent on getting money from someone else, that we are stuck … and are heading towards an entitlement and a nanny state …

It was quite astonishing to see an exchange between Claybrook and Friedman (Episode 7, “Who protects the consumer”) about Air Bags and Claybrook insisting that someone else can decide what is good for Friedman – she could not see the difference between “brakes” and “air bags” – one that could impact someone else (brakes) while the airbags may save only the driver … I mean, Claybrook was either obtuse and/or dense or that perfect example of a Nanny from the Nanny State.

But yes, I am indeed thankful that we have had people like Milton Friedman … and that today, we have “blogs” and “podcasts” and other ways to try and spread the message!

Here was an intellectual firebrand – Milton Friedman – and there were a

DG Lesvic July 31, 2011 at 4:01 am

Krishnan,

I see the problem very differently from you. I look back on the progress and triumphs of free market thought, most recently in Britain and America under the leadership of Thatcher and Reagan, and immediately after World War II, in Western Europe, especially under Erhard in Germany and Einaudi in Italy, and the Industrial Revolution itself, at bottom, a philosophical revolution, and ask why, if the right ideas could win in the past, they could not do so again. And since I don’t have any good answer to that, I am convinced that they could, that our future is in our own hands, that it is up to ourselves, not our adversaries, whether we win or lose.

So the question then is whether we have been doing all that we could.. And I don’t think so. I see resistance on the Right as well as the Left to free market ideas, not to all of them, of course, but to some, and perhaps even some of the best..

It can be all your life is worth to think outside the box, even here at good old Cafe Hayek, the freest of the free market centers of thought. You may have noticed the abuse to which I have been subjected here, not by our hosts, who have always been gracious and fair, but still by a great many, who seem to see their greatest enemy not as those advancing statist ideas but free market ideas they themselves hadn’t thought of.

And that is the fault not of the Left but of the Right itself.

Economic Freedom July 31, 2011 at 3:38 am

http://www.villagevoice.com/2008-03-11/news/why-i-am-no-longer-a-brain-dead-liberal/

Mamet’s conversion truly is fascinating. See his first statement on it from 3 years ago published in a leftist paper “The Village Voice” under the title “Why I Am No Longer A Brain-Dead Liberal.”

Similar to Mamet is Andrew Bretibart’s conversion. In an engaging interview a year or two ago online with Peter Robinson from the Hoover Institution (a webcast series called “Uncommon Knowledge”), Breitbart mentioned that he discovered — apparently by accident — that “conservatism” was not about people like Jerry Falwell, but rather Friedrich Hayek and Thomas Sowell.

Interesting how those two names (along with Friedman’s, of course) keep appearing in people’s ideological epiphanies.

John Sullivan July 31, 2011 at 8:15 am

Another sign of our times is that Mamet gets all this attention, yet he’s still an intellectual lightweight. Everything he mentioned that he has read, I read in my 20′s and 30′s, and that was a long time ago. The media has turned actors, comedians and playwrights into our economists and political philosophers.

Elsewhere, the conservatives need to cure their party of those afflicted with the disease “Dobbs Syndrome”. These protectionists, including The Donald and Pat Buchanan should be challenged in an open forum. Especially Trump. Why is everyone afraid of that loser? He gives Wharton a bad name.

This past thread, about high tariffs in the 19th century contributing to our industrial revolution is the junk that Pat Buchanan uses to justify his calls for economic nationalism. He should be forced to put on a dunce cap, sit in a corner of a grade school classroom and be forced to read Mises’s “Omnipotent Government” , outloud, to Lou Dobbs and Trump, who are serving detentions for throwing spitballs during their economics class, in order to grasp the comparisons between their own dear ideology and that of the German Nazis.

The calls for economic nationalism bring to mind a aphorism of Nietzsche that I read several years ago. Too lazy to look it up, it essentially said to hate your neighbor, but to love all those of great distance to yourself. He wrote brilliantly, and beautifully, about destroying tribalism with individualism, but sadly, we have also been educated to think of Nietzsche as an authoritarian.

nailheadtom July 31, 2011 at 9:10 am

“He wrote brilliantly, and beautifully, about destroying tribalism with individualism….”
______________________________

What’s with all the negativity about “tribalism”? Is the mega-state an improvement? Tribes don’t necessarily correlate with repression and bondage. In fact, tribes are affinity groups, ordinarily composed of individuals that have freely accepted membership. There’s no reason that members of tribes can’t engage in free trade. They’ve done so in the past and trade actually predates any more complex social institution. The idea that a complex, bureaucratic state is an improvement on the simpler tribe in terms of individual freedom, technological advancement and standard of living is an unproven assumption.

DG Lesvic July 31, 2011 at 11:35 am

John,

You wrote,

“The media has turned actors, comedians and playwrights into our economists and political philosophers.”

Great observation, but it’s a mistake to include Mamet with the Jon Stewarts. Mamet is a newcomer but no lightweight. It’s amazing how much ground he made up in a short time. Don will be pleased to learn that his book even has several references to Macauley’s History of England.

It’s a mish mash. He’s not an experienced writer in this field, and his book reads like a first draft, but don’t underestimate him. He is a transformational figure, if Friedman the messiah, Mamet a prophet. But, if not a lightweigh, not exactly a heavyweight either, for more a follower than a leader. The leaders, if there are to be any, will arise right here at Cafe Hayek, the freest of the centers of free market thought.

So this is where the ultimate battle for the future of freedom is being fought, between the people with nothing more than Ya, me too to say and the real contributors they hate and fear and will seek to destroy.

John Sullivan July 31, 2011 at 8:09 pm

nailheadtom,

You are thinking differently than I am about the meaning of the word ‘tribalism’. Historically, the individual was subordinated to his family, clan or group, with their religions, traditions and customs. It was necessary back then, but as the world evolved, the individual had to slowly emerge from the bondage, and bigotry, of his group. The world is far less bigoted today than it was 500 years ag–due to the values of individualism slowly replacing the totalitarian tribal values.

This evolution, the evolution of human liberty, has been won step by step against those who held dominant positions of power within the groups.

Tribalism is a term used to describe a group or society of people whereby the individuals are subordinated to a collective ethic. Mises brilliantly described how the group erected “metaphysical constructs”—or as he called them, ‘idols’ that the masses are conditioned to believe as superior to their individual rights, etc.

The Protectionism relies a collectivist idol–a concept of a nationstate, as something that people should sacrifice their private interests for, and by coercion if possible. But the idol are merely other individuals who handsomely profit from the sacrifices of the masses who have been conditioned to believe in the idol.

John Sullivan July 31, 2011 at 8:24 pm

DG Lesvic,

I know all about Mamet. It’s nice that he’s a conservative now, or whatever. His glass was half empty, now its half full. I don’t think we have another George Orwell here.

Krishnan July 31, 2011 at 9:41 am

“Keep selling” – Agree … this blog ofcourse and the terrific posts, links – the econtalk podcasts – if only those that are stuck in the mud would listen and open their minds … We have to assume that they will not – and so keep hammering the logic … till they do …

DG Lesvic July 31, 2011 at 10:07 am

If only those that are stuck in the mud would listen,

those on the Right as well as the Left, and here at the Cafe especially, where it al must start.

Stephen MacLean July 30, 2011 at 6:16 pm

For more on ‘pro business’ versus ‘pro capitalism’, you may be interested in Luigi Zingales’s National Affairs essay, ‘Capitalism After the Crisis’.

kyle8 July 30, 2011 at 11:23 pm

Sometimes it goes the other way, Someone (Krugman comes to mind) will argue for free trade, but then changes to a protectionist for political reasons.

But it is a loser because protectionist sentiments are not very high in the USA and are not, in my view, on the increase.

Krishnan July 31, 2011 at 9:44 am

protectionist sentiments never go away – and am not sure they are “not very high” in the US – once someone, some group benefits from what they have or have earned, their next objective is to make sure that they can keep what they have by preventing others from trying something and changing the world as they see it … when the benefits are concentrated by protectionism and the costs are dispersed (as someone so wisely observed!) it is easy for protectionists sentiments to advance … We do need to keep up the good fight …

Sam Grove July 30, 2011 at 5:16 pm

The desire for profit in trade will often accustom traders to increased tolerance for varying customs/morés in the people they trade with.

John Sullivan July 31, 2011 at 8:24 am

This is very true. Historically, tribalism, which was essentially totaltarian, was diffused by individuals who risked ostracism by reaching out to neighboring societies, through trade. Economic goods weren’t the only thing traded, but so were ‘ideas’, and those exchanges of ideas were the seeds of individualism that led to the evolution from tribal values (communal authoritarian) to individualism.

muirgeo July 30, 2011 at 5:26 pm

“Opponents of free trade literally are unreasonable.”

People who consider our trade agreements “free trade” are unreasonable and unthinking. I am just glad that you are documenting your position so vociferously for all of posterity to see who the people were… the supposed intellectuals that took modern civilization off a cliff and back several steps before more sane minds prevailed and humanity and civilization was able to make its next great leaps forward.

Our economy will NOT improve until better global finance and trade agreements are enacted. Specifically theAmerican economy will not improve until we decrease our trade imbalance and stop incentivizing companies to off shore their production.

JWH July 30, 2011 at 5:42 pm

An honest question from the new guy, in your opinion how do we incent companies to offshore production.

Kirby July 30, 2011 at 6:44 pm

Muir is basically evading the fact that the free market determines offshoring and instead believing that the government, his greatest ally, is in fact facilitating his grotesque vision of the free market.

Dan J July 30, 2011 at 6:47 pm

Muirgeo and others are control freaks. They abhor individual choices. They cannot fathom, yet one more day passing of people ‘freely’ making their own choices without some elitists having approved.

Kirby July 30, 2011 at 9:02 pm

when people make choices, they are always the wrong ones. Unless they are made by geniuses and enlightened ones such as Muirgeo.

JWH July 30, 2011 at 10:26 pm

Thanks. I certainly want to buy from whom ever gives me the most value for my hard earned bucks. From my very low perch, it appears the government influences the game in favor of domestic producers, not the other way around. But I am always interested in being shown the light so to speak.

ArrowSmith July 30, 2011 at 10:51 pm

Exactly. Why is it any of Muir’s business if Apple does their manufacturing in China? Of course he will retort that American corporations export the externalities of pollution to other countries. I can see his point there, I don’t want smoke-stacks and brown haze where I live. Essentially Chinese people are suffering so I can enjoy a piece of electronics that costs $1000 instead of $1700 + I get clean air and water.

Dan J July 30, 2011 at 11:14 pm

Chinese people are suffering from increased manufacturing and jobs?
The externalities are absolutley the product of govt, since govt in China owns all means of production and energy sources.

Dan J July 30, 2011 at 11:16 pm

Govt will favor the highest bidder. The highest bidder is not just a matter of money, but also of allegiances. Foreign countries do not vote.

ArrowSmith July 30, 2011 at 11:16 pm

Dan – are you telling me that if government got out of the way in China, people would not be breathing brown smog?

John Sullivan July 31, 2011 at 8:51 am

His favorite past time is walking his dog, who accepts his leash in return for security and succor.

Everyone has an inner quest for power, but some more than others. You can measure it in people if you study them closely. Liberals want to rule others more than they want to rule themselves. It’s because they lack confidence in themselves.

muirgeo July 31, 2011 at 2:51 am

http://www.usatoday.com/money/perfi/taxes/2008-03-20-corporate-tax-offshoring_N.htm

“The U.S. tax system does provide an incentive to locate production offshore,” says Martin Sullivan, a contributing editor to Tax Notes, a non-profit publication that tracks tax issues.

At issue is the U.S. tax code’s treatment of profits earned by foreign subsidiaries of American corporations. Profits earned in the United States are subject to the 35% corporate tax. But multinational corporations can defer paying U.S. taxes on their overseas profits until they return them to the USA — transfers that often don’t happen for years. General Electric, for example, has $62 billion in “undistributed earnings” parked offshore, according to recent Securities and Exchange Commission filings. Drug giant Pfizer boasts $60 billion. ExxonMobil has $56 billion.

“If you had two companies in Pittsburgh that both were going to expand capacity and create 100 jobs, our tax code puts the company who chooses to put the plant in Pittsburgh at a competitive disadvantage over the company that chooses to move to a tax haven,” says former White House economist Gene Sperling, a Clinton adviser.

Dan J July 31, 2011 at 3:27 am

Which is why a revised tax code with a much lower flat tax… no decutions or exemptions… none for oil….. none for GE…… none for buying of idiot cars….. I mean Chevy Volts…….

Emil July 31, 2011 at 9:23 am

Confused, what business should it be of the US govt to tax economic activity that is happening elsewhere?

muirgeo July 31, 2011 at 4:04 pm

Because those businesses are claiming to be American businesse’s. You don’t get all of the benifit of being in the country club with out having to pay your dues.

And you might want to read section 8 of the constituion.

anthonyl August 5, 2011 at 12:02 pm

You are missing the whole point dan was trying to make. Tax code is a diminution of free trade. It is control of one by another no matter if it incentivizes or doesn’t.

Krishnan July 30, 2011 at 6:11 pm

“We” are making too many planes and designing too many chips and coming up with too many ideas – while “they” are making too many shoes and too many TV’s and not have many idea to design new products … Since it is far easier for us to stop making planes and designing chips and coming up with ideas – we should “stop” and go back to making the things Chinese (and others make) to sell in Walmart – … So, what is the trade in planes and chips and computers stop/reduce – so what if we do not import chips from Singapore/Malaysia/Taiwan – at least we will have balance of trade in items being sold in WalMart

I imagine we also need to work on trade imbalances between States in the Union – We need to take some of the idea generation in CA (Apple, Oracle, Facebook, Google) and force them to “share” – so that trade imbalances between CA and the rest of the country will be reduced – We can go further. The trade imbalance between Northern and Southern CA is HUGE in many areas – So why should other states send money to CA while CA does not buy equivalent amounts from those states that buy such things as what CA sells …

Currency you say? Because we all trade in dollars – there is no “Trade Imbalance”?? That there is something magical about “A nation” and “national borders” should be impenetrable?

(Not that it will matter … but here goes) China sells more of many things to us than we do to them – they get dollars for those items – they then have to find ways to use those dollars – Like Japan of the 1970′s, China today has decided to artificially keep the value of their currency lower than it would be if traded – so China is punishing their people – they work harder than they have to – The real problem is that the US Government spends more than they take in every year – so China is able to exchange their dollars for US treasuries – if the US were to borrow LESS than what we are doing now, China will have to find a home for their dollars – so, one BIG reason for our “trade deficit” with China is the US Government being irresponsible and reckless with our tax dollars

But yea, as I said – I know, nothing I (or anyone else) may say will make any change in what you may think …

So, why do I even bother to respond/write? Good question – I will go and knock my head against a concrete wall – get a headache and stop – the head ache will go away soon …

Surfisto July 30, 2011 at 7:11 pm

Krishnan,
This is something I have wanted to clarify. Are the transactions in dollars or renminbis? Maybe both? So is it the Chinese that have to find something to do with those dollars or the banks that exchange the money?

Dan J July 30, 2011 at 7:17 pm

They don’t trade in actual currency……. it is in computer transactions. Which, of course, is exchanged quite rapidly and easily.

vidyohs July 30, 2011 at 7:32 pm

Surfisto,
Where have you been all these months and months. Good to see you back.

Surfisto July 30, 2011 at 9:04 pm

Thanks Vidyohs,
Hope to be more involved.

Krishnan July 30, 2011 at 7:35 pm

I imagine when the Chinese sell us goods here in the US, they get paid in dollars – if we sell something in China, we can demand they pay us in dollars OR we can accept their currency if there is something we can do with their currency – like exchange that for dollars we can use back in our country … If the Chinese sell us something and we give them dollars and all they can do with that is buy more treasuries, imagine life for those that make those goods – the Chinese government will print their currency and give it to their manufacturers instead of letting them keep dollars …

currencies are a medium of exchange and they have value if and only if we can exchange currency for “things” – if the Chinese insist on paying us with their currency and there is nothing we can buy with that OR exchange it for dollars OR (whatever) why would we sell them anything for worthless pieces of paper? Today, there are ways we can exchange dollars for renmimbi (or other currencies) – and this is also where problems come – Since we are the only country that can “create” dollars out of thin air, we can get reckless and print more dollars to devalue the holdings the Chinese have in our country – and yes the Chinese can do that also with their currencies – and yes countries have tried debasing their own currencies to get an “advantage” over others – only to fail … I have never understood as to why we would WANT to pay MORE for imports OR have someone pay LESS for our exports because of artificially changing the ratios of the values of currencies by reckless politicians …

yes, I know that when a currency devalues, that country can “sell” more – perhaps for a short time – I know of NO country that has gotten wealthier by debasing it’s own currency …

China is NOT an economic paradise as many seem to want us to believe – their singular aim to keep their exports up by manipulating their currency is foolish – it punishes their producers while we enjoy what they make – inflation is running rampant from what I hear – it will get worse if China keeps imagining that they can keep growing by forcing currencies to stay at some artificial levels unrelated to market forces and the global economy

Dan J July 30, 2011 at 7:45 pm

That is the thing with central planners… they continue to fiddle until it all crashes down.. all the while the ones on in charge have enjoyed their decadence. When things fail……. eliminate the percieved problems….. the people.

Surfisto July 30, 2011 at 8:58 pm

Krishnan,
Thanks for the response. I think what I was hoping to get out of the conversation is how the current account surplus equals the deficit. If people, companies, governments, etc. are investing their dollars in the US how can the account surplus be equal to the deficit? The only way I see this possible is if the banks hold the money. Which I guess they do in any case because companies do not hold their money in giant safes. It could potentially take companies years before they re-invest back in the US. I think I just answered my own question after writing this, but any feedback is great.

kyle8 July 30, 2011 at 11:25 pm

The holder of debt in a rapidly declining currency is going to be in as much trouble as the nation with the declining currency, especially if they are also dependent on trade with that nation.

It is not in China’s best interest to see the credit of the USA decline.

Dan J July 30, 2011 at 11:48 pm

China cares not for elections or its people. They only do minimal necessary to keep any dangerous amounts of population from revolting in unison. So, any political implicatiosn are irrlevant as are any consequences upon its peoples. So long as they can keep them pacified so as to not have to use brute force in masse.

ArrowSmith July 30, 2011 at 11:51 pm

Dan – why is moral for the USA to do business with this country then? Shouldn’t we make a stand and boycott them?

Dan J July 31, 2011 at 12:05 am

There will be nothing gained in creating sanctions on China. But, thru trade, more and more of the populations are being treated to more information and betterment of lifestlye. We will not better the lives of Chinese thru economic sanctions or refusal to trade. The Chinese govt has too great a stranglehold. In other countries, economic sanctions may have a better outcome as to assist in creating enough strife to bring about insurrection.
I am not saying any of this is moral.

Our govt loves any means in which to expand itself. China is the means, by borrowing. They deal with the devil. But, as a matter of trade, we get a helluva deal. And as for implications upon the people, they advance and are treated to advancements that when centralized planning crashes they are less willing to return to austerity and more abject poverty.
Might I also add in theory, that use of their resources, as they trade the resources for paper (money) or binary code. Both of which have little value compared to the hard assets of the materials.

Preva Ichi July 30, 2011 at 7:20 pm

Good points. What also of our interspecies imbalance. We get so much of value from bees, dogs, and horses, yet we give them only our raw resources. What of the imbalance creatures of the land owe creatures of the ocean. We take so much from the fish and sea mammals yet provide them so little in exchange, the gap is widening, we will soon drown in a sea of red ink.
Some day the bill for unpaid women’s surplus labor will come due. Whatever will the future men do to repay that hefty sum?
Everyday I am astounded that my Platonic wooden equations tilt ever more this way or that. Soon my models of human progress will completely fall over, and the paragons of ancient wisdom will all be engaged in what kids today call “planking.”

Stone Glasgow July 30, 2011 at 8:52 pm

Do humans owe the sun for its light as well?

ArrowSmith July 31, 2011 at 2:10 am

Excellent point. The Sun has given us so much of itself for 4 billion years and what has it gotten in return? Nothing.

MWG July 30, 2011 at 7:07 pm

Different day, same bullshit.

Stone Glasgow July 30, 2011 at 7:37 pm

Free trade is the default state of existence; “free trade agreement,” is an oxymoron.

James N July 30, 2011 at 7:40 pm

“People who consider our trade agreements “free trade” are unreasonable and unthinking.” People who suggest that free traders believe “trade agreements” represent free trade are unreasonable and unthinking.

“…the supposed intellectuals that took modern civilization off a cliff and back several steps..” Wow, off a cliff and then back several steps. That would be a neat trick.

“Our economy will NOT improve until better global finance and trade agreements are enacted.” Could you have possibly been more vague? What does “better” equal? Or is it too much to ask that you define your terms?

“Specifically theAmerican economy will not improve until we decrease our trade imbalance and stop incentivizing companies to off shore their production.” Again, what is the level you’re trying to achieve? Or is it simply a figure somewhat lower that our current rate?

Do you offer these vague statements simply to avoid having anyone question your position, or is it because you haven’t a clue how anyone could possibly achieve your unstated benchmarks?

Sam Grove July 30, 2011 at 10:44 pm

Any comments by you about free markets are worthless as you have demonstrated repeatedly that you have minimal comprehension of what constitutes free markets.

You actually believe we have free markets now and that government sponsored and enacted trade agreements are examples of FREE trade.

Sam Grove July 30, 2011 at 10:48 pm

That’s for muirgeo, of course.

maximus July 31, 2011 at 1:46 am

Ahh, don’t go away mad georgie porgie. Dr Boudreaux’s last paragraph was a perfect description of…well… you.

John Sullivan July 31, 2011 at 8:35 am

Muirego,

The chinaman is your new nigger. Your a bigot, and a proud one at that. You set up borders and hate those beyond your own.

200 years ago you could discriminate openly about blacks, without even a reflex feeling of moral guilt. Today the whipping boy has slanted eyes.

If one studies the evolution of individualism, and the correlated decline of tribalism, they will see that what was commonly thought and believed in the past is often considered bigoterd, immoral and disgusting today. This evolution hasn’t stopped. The happy go lucky trade protectionist today will be looked back as the slaveholders of our times.

Muirgeo,

You’re a slave holder, and your key strokes on this site our your whips. Given an ounce of power, you’d chain all those within your grasp. Get a life. Meditate on something beyond your envy of those doing better around you. You’re swimming upstream.

Stephen MacLean July 30, 2011 at 6:27 pm

Dr Boudreaux: A very good quotation from Durant. I have often seen the massive 11-volume collection on library shelves but was dubious of the reliability of such omnibus behemoths and no one of my acquaintance had ever spoken about them. (Toynbee’s similar enterprise, though, seems to get a bad press.) However, a few weeks ago a posting on the Mises Institute site gave Durant a very favourable review — along with links to downloadable e-books and audio files. I wonder if you could at some time give us some thoughts on your impressions of the Durant enterprise. (I just started to read his volume on the Renaissance to-day.)

John Galt July 30, 2011 at 6:49 pm

Are there any human minds, or only a planet of cyber-apes, who would angrily throw feces at 15 year old Ariel were she to rollerskate today to her wedding of her teacher, Mr. Durant, twice her age this fine summer’s day?
Who among you can live without the smell of the troop, and the approving nods of your betters? Surely the most productive years of young adults must be squandered on meaningless supervised toil and meaningless mind killing drivel.
What arrogance those Greeks, with their private property rights including slaves and sexual independence. They knew so little about our modern joys of living a primitive life only for the common good and directed purpose and swinging vine infrastructure of the alpha apes. Let us deny them and Darwin too.
Let us band together and examine and redistribute our stock of bananas and mates, that the weakest of us shall have as many the strongest of us. Let us banish forever the monkeys on our back of envy and superiority and inequality. We will all build a superhighway of communal vines and forever swing through the trees in smiling harmony.

Kirby July 31, 2011 at 8:54 am

I want to see Rise of the Planet of the Apes too.

Invisible Backhand July 30, 2011 at 6:51 pm

I just happened to be browsing the “World Tariff Profiles 2010″

http://www.wto.org/english/res_e/publications_e/world_tariff_profiles10_e.htm

and it seems that ‘opponents of free trade’ is…everyone.

Dan J July 30, 2011 at 7:14 pm

Protectionism or restricting free trade does have benefits. The restrictions will benefit one specific group at the expense of all others. The protectionism of Magnesium mining and trade of the material in the US. A tariff which keeps the price of Magnesium about 70% higher than the world market. Magnesium being a lighter alloy than steel and stronger than aluminum has become instrumental in production of automobiles amongst other products. But, alas, the protectionist tariff, while protecting a few hundred mining jobs, costs the US thousands of jobs elswhere and throughout as businesses who use Magnesium in their product cannot compete in the global market and must relocate or invest in overseas productions or else lose.

Invisible Backhand July 30, 2011 at 9:50 pm

Your chain of logic relies on many assumptions, among them the goodwill of the Chinese. We had one primary producer left in the USA, you actually think it would be a good idea for them to be run out of business?

http://www.usitc.gov/publications/701_731/pub4214.pdf

Dan J July 30, 2011 at 11:54 pm

They would not be out of business. They would only produce less or the mine would not be in production until markets dictate their profitability. The mine shall not move nor the material suddenly vanish. As Chinese or Russian exports decreased to fiddle with markets and prices rise the mine would become more profitable and reopen or increase its output. Assuming that protectionist measures would cause the business to be ‘run out’.
You ASSUME that the mine and the business would no longer be in operation.
ASSUMPTIONS are nice, aren’t they?

Invisible Backhand July 31, 2011 at 12:47 am

I envy your gift of FAITH.

Dan J July 31, 2011 at 1:00 am

Faith in free markets? Yes, I have them.

Ken July 31, 2011 at 2:33 pm

Claiming people have “faith” in free markets is like claiming people have “faith” in gravity.

There are two common definitions of faith. One is confidence or trust in a person or thing, the other is belief that is not based on proof. People who say they have faith in the free markets mean the first definitions, but opponents think it’s the second or simply equivocate.

Of course, this is absurd. Proof that free markets work better at raising EVERYONE’s standard of living than any other economic organization ever invented is overwhelming and everywhere.

Regards,
Ken

Bill Conerly July 30, 2011 at 6:57 pm

Durant is great, though I have not read his book on Greece. His Caesar and Christ, about the entire Roman era, is filled with great lessons about price controls, confiscatory taxation, the effects of continual war efforts. Well worth reading. (on my blog, search for “Rome” for my summaries).

Nevada Doctor July 30, 2011 at 7:44 pm

The free market does not level men down to some common denominator; the intellectual criteria of the majority do not rule a free market or a free society; the exceptional men, the innovators, the intellectual giants, are not held down by the majority.
In fact, it is the members of this exceptional minority who lift the whole of a free society to the level of their own achievements, while rising further and ever further.
A free market is a continuous process that cannot be held still, an upward process that demands the best (the most rational) of every man and rewards him accordingly. While the majority have barely assimilated the value of the automobile, the creative minority introduces the airplane. The majority learn by demonstration, the minority is free to demonstrate. The “philosophically objective” value of a new product serves as the teacher for those who are willing to exercise their rational faculty, each to the extent of his ability. Those who are unwilling remain unrewarded—as well as those who aspire to more than their ability produces. The stagnant, the irrational, the subjectivist have no power to stop their betters . . . .

The mental parasites—the imitators who attempt to cater to what they think is the public’s known taste—are constantly being beaten by the innovators whose products raise the public’s knowledge and taste to ever higher levels. It is in this sense that the free market is ruled, not by the consumers, but by the producers. The most successful ones are those who discover new fields of production, fields which had not been known to exist.

A given product may not be appreciated at once, particularly if it is too radical an innovation; but, barring irrelevant accidents, it wins in the long run. It is in this sense that the free market is not ruled by the intellectual criteria of the majority, which prevail only at and for any given moment; the free market is ruled by those who are able to see and plan long-range—and the better the mind, the longer the range.
In a free economy, where no man or group of men can use physical coercion against anyone, economic power can be achieved only by voluntary means: by the voluntary choice and agreement of all those who participate in the process of production and trade. In a free market, all prices, wages, and profits are determined—not by the arbitrary whim of the rich or of the poor, not by anyone’s “greed” or by anyone’s need—but by the law of supply and demand. The mechanism of a free market reflects and sums up all the economic choices and decisions made by all the participants. Men trade their goods or services by mutual consent to mutual advantage, according to their own independent, uncoerced judgment. A man can grow rich only if he is able to offer better values—better products or services, at a lower price—than others are able to offer.

Wealth, in a free market, is achieved by a free, general, “democratic” vote—by the sales and the purchases of every individual who takes part in the economic life of the country. Whenever you buy one product rather than another, you are voting for the success of some manufacturer. And, in this type of voting, every man votes only on those matters which he is qualified to judge: on his own preferences, interests, and needs. No one has the power to decide for others or to substitute his judgment for theirs; no one has the power to appoint himself “the voice of the public” and to leave the public voiceless and disfranchised.

“America’s Persecuted Minority: Big Business,”
Capitalism: The Unknown Ideal, 47.

Intellectual freedom cannot exist without political freedom; political freedom cannot exist without economic freedom; a free mind and a free market are corollaries.

“For the New Intellectual,” For the New Intellectual, 25.

The free market represents the social application of an objective theory of values. Since values are to be discovered by man’s mind, men must be free to discover them—to think, to study, to translate their knowledge into physical form, to offer their products for trade, to judge them, and to choose, be it material goods or ideas, a loaf of bread or a philosophical treatise. Since values are established contextually, every man must judge for himself, in the context of his own knowledge, goals, and interests. Since values are determined by the nature of reality, it is reality that serves as men’s ultimate arbiter: if a man’s judgment is right, the rewards are his; if it is wrong, he is his only victim.

“What Is Capitalism?”
Capitalism: The Unknown Ideal, 24.

Now observe that a free market does not level men down to some common denominator—that the intellectual criteria of the majority do not rule a free market or a free society—and that the exceptional men, the innovators, the intellectual giants, are not held down by the majority. In fact, it is the members of this exceptional minority who lift the whole of a free society to the level of their own achievements, while rising further and ever further.

A free market is a continuous process that cannot be held still, an upward process that demands the best (the most rational) of every man and rewards him accordingly. While the majority have barely assimilated the value of the automobile, the creative minority introduces the airplane. The majority learn by demonstration, the minority is free to demonstrate. The “philosophically objective” value of a new product serves as the teacher for those who are willing to exercise their rational faculty, each to the extent of his ability. Those who are unwilling remain unrewarded—as well as those who aspire to more than their ability produces. The stagnant, the irrational, the subjectivist have no power to stop their betters . . . .

The mental parasites—the imitators who attempt to cater to what they think is the public’s known taste—are constantly being beaten by the innovators whose products raise the public’s knowledge and taste to ever higher levels. It is in this sense that the free market is ruled, not by the consumers, but by the producers. The most successful ones are those who discover new fields of production, fields which had not been known to exist.

A given product may not be appreciated at once, particularly if it is too radical an innovation; but, barring irrelevant accidents, it wins in the long run. It is in this sense that the free market is not ruled by the intellectual criteria of the majority, which prevail only at and for any given moment; the free market is ruled by those who are able to see and plan long-range—and the better the mind, the longer the range.

“What Is Capitalism?”
Capitalism: The Unknown Ideal, 25.

All the evils, abuses, and iniquities, popularly ascribed to businessmen and to capitalism, were not caused by an unregulated economy or by a free market, but by government intervention into the economy.

“What Is Capitalism?”
Capitalism: The Unknown Ideal, 25.

All the evils, abuses, and iniquities, popularly ascribed to businessmen and to capitalism, were not caused by an unregulated economy or by a free market, but by government intervention into the economy.

Krishnan July 30, 2011 at 7:56 pm

Ayn Rand and Milton Friedman. Imagine the world without their powerful words and ideas. As long as people can read what they have written, watch them speak and explain, I am optimistic that the restrictionists will lose.

Kirby July 30, 2011 at 9:03 pm

Rand is awesome, and the only (well, duh) reason I am an Objectivist.

ArrowSmith July 30, 2011 at 10:55 pm

Did Milton Friedman ever address negative externalities of corporations? There is a reason the EPA was created, the American people had enough of choking on smog.

kyle8 July 30, 2011 at 11:29 pm

Yes of course he did.

Dan J July 30, 2011 at 11:55 pm

Now we are being choked off, economically, by the EPA. What a nice turn of events. One good deed deserves another.

Trey July 31, 2011 at 2:55 pm

Indur Goklany has done nice work showing that state and local governments were doing a good job reducing air pollution WELL before the EPA was created.

http://goklany.org/ap.html

Krishnan July 31, 2011 at 8:27 pm

And I suppose you believe that BUT for the EPA we would all be dead. Ah yes, I imagine you also believe that the “War on Poverty” was won and that we do not have “poverty” anymore. (or if we have not won, it is because we have not spent enough money) You will be unable to accept the conclusion that what the War on Povery did is to INCREASE poverty and dependence – Thomas Sowell also argues about that powerfully in many places – …

The idea that people who produce and sell have every incentive to NOT cause harm and trouble for their consumers is difficult for you to understand – I imagine you think all these people do is pollute the very air they will also be breathing and all they seek to do is cause harm to their customers …

If anything, it is BECAUSE of Government protection that things have gotten worse – Yes, Friedman has addressed the issue of air/water etc – since it impacts the “third person” …

Stone Glasgow July 30, 2011 at 8:59 pm

“free market is ruled, not by the consumers, but by the producers.”

A free market isn’t ruled by anyone, but this statement is backwards. In a free market producers are only winning by meeting the demands of consumers. It is the consumers who direct the actions of successful producers.

Michael Smith July 31, 2011 at 8:01 am

Stone Glasgow wrote: “A free market isn’t ruled by anyone, but this statement is backwards.”

Stone, I think you are taking Miss Rand’s statement out of context.

In the article the quote is from, Miss Rand makes clear that in a free market, only those who produce CAN consume; hence, producers do indeed “rule” in a free market.

However, in the same article, she makes clear that since no one in a free market is permitted to initiate the use of physical force, no one “rules” in the sense of being able to force others to act against their own wishes. Producers only “rule” in the sense that their choices as to how to spend their earnings determine the earnings of other producers — while those who produce little or nothing have no power to reward or punish anyone.

Please read the articles being quoted before disagreeing with them — intellectual honesty demands no less.

Stone Glasgow July 31, 2011 at 10:18 pm

Thanks for the clarification.

Michael Smith July 31, 2011 at 7:52 am

Thank you, Nevada Doctor, for the quotes from Miss Rand.

Her points are quite unanswerable in reason, which is why the world’s collection of reason-haters, i.e. leftists, always choose the childish ad hominem of attacking her personally or resort to other lame logical fallacies ranging from the non-sequitur to the straw man.

The fundamental issue — of which the free trade versus trade-at-gunpoint debate is merely one particular manifestation — is to whom does the life of an individual belong? Does it belong to the individual? Or does it belong to “society” or to “the state” or to “the tribe” or to any worthless cretin who waves his sores in our faces and claims that his “need” justifies his eating us alive?

As Miss Rand points out, there is no fact of reality, no reason on earth, to justify the notion that an individual’s life belongs to anyone or anything other than that individual. No one has ever offered a rational justification for cannibalism in any of its forms — no one has ever articulated a reason-based argument why some individuals are entitled to exist at the expense of others while other individuals are sentenced to a lifetime of bondage to whatever stray beggars happen to vote a looter-in-chief like Obama into the office of “Chief Sacrificer of the Productive” bearing the additional title of “He Who is Empowered to Practice Charity with Other People’s Money”.

It’s YOUR life, no one else’s, and the crucial question is whether or not you are willing to fight for it. If you are, read Ayn Rand and discover that reason is on your side — and that the other side has nothing going for it but your refusal to think.

DG Lesvic July 31, 2011 at 12:55 pm

Michael,

Glad to see you again. You’ve been one of our best, and that means the best of the best.

You wrote,

“which is why the world’s collection of reason-haters, i.e. leftists, always choose the childish ad hominem.”

Don’t leave out those on the right, and right here at the Cafe, from among the reason-haters, always choosing the childish ad hominem.

They have almost come to dominate the Cafe.

ArrowSmith July 30, 2011 at 10:53 pm

But you can’t have a totally free market. At the very least you have to have environmental protections to ensure people have clean air and water. People need to be able to live decent lives, even if they aren’t rich enough to afford the better neighborhoods.

kyle8 July 30, 2011 at 11:28 pm

You misunderstand. When people say “Free Market” they are not talking about anarchy. We need government to maintain some protections bot the individuals and to the commons, and maintain protection from fraud and enforce contracts.

When we say free trade we mean no (or little) arbitrary restriction on who you trade with, and the absence of barriers to trade.

Gil July 31, 2011 at 1:43 am

Plenty of Libertarians disagree with you.

ArrowSmith July 31, 2011 at 2:10 am

Glibertarians.

kyle8 July 30, 2011 at 11:44 pm

Just wondering why my replies do not show up until like one hour after I send them?

Harold Cockerill July 31, 2011 at 7:20 am

Those messgaes have to go through really tiny wires.

Sam Grove July 31, 2011 at 4:49 pm

Refresh your page.

jjoxman July 31, 2011 at 8:23 am

You can have a totally free market as long as courts aren’t politically compromised to tilt in favor of the polluter, as was the case in the U.S. for a very long time. Pollution of air and water are property rights violations, and as such are actionable offenses in a pure free market setting.

John Sullivan July 31, 2011 at 8:35 pm

Tort law covers it, class actions, etc. You don’t need an EPA. These types of agencies are corrupt. The laws they make are designed by the large corporations that they’re supposed to be regulating. The purpose is to restrict competition by making it difficult and costly for new competitors to enter the market.

Harold Cockerill July 31, 2011 at 7:31 am

I find it amazing that progressives push the concept of natural selection in biology as the means by which we arrived at our humanity yet deny the efficiency of natural selection in economics as the means by which we may all become better off.
Personally I think natural selection is how the Author of Nature makes things work. Denying natural selection in economics is certainly not progressive.

rhhardin July 31, 2011 at 8:24 pm

Opponents of free trade literally are unreasonable.

Not literally. They consider only the first consequence, not subsequent consequences..

That’s well within literal reasonableness.

You might get better traction with irrational, which supposes a good counter-argument rejected.

Daniel August 1, 2011 at 8:12 am

The internet is the ‘crossroads of trade’.

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