No nation was ever ruined by trade, even seemingly the most disadvantageous. — Benjamin Franklin
What do you think Benjamin Franklin meant by “no nation was ever ruined by trade”? Do you think that his words apply to today’s Western economy?
Of course, Ayn Rand was a big proponent of free trade. Value for Value. And Christians, perhaps for the same and perhaps for very different reasons, should view free trade similarly.
Chapter 5 of The Soul of Atlas (entitled “Capitalism“) explores the Christian and the Objectivist view of Capitalism.
With economic turmoil and volatility in the capital markets today, skeptics come out of the woodwork like bugs in an old farmhouse. They question the validity and the viability of Capitalism, particularly the idea of laissez-faire, that the state should not intrude in the economic activities of entities in a free market. Media commentators reference the invalidation of a “free-market economy.” What G. K. Chesterton once said about Christianity can easily be addressed to today’s critics of laissez-faire Capitalism in the West: laissez-faire Capitalism has not been tried and found wanting. Rather, its moral basis has not been found “palatable” so it has not been tried.
Capitalism is Rand’s political system. She defines Capitalism in terms of the fundamental building blocks: a social system based on the recognition of individual rights, including property rights, in which all property is privately owned.
Both of my fathers espoused Capitalism despite their adherence to world views which stand opposed on many issues. Ayn Rand understood Capitalism to be the economic system that supports the individual to the greatest extent, the Christian sees Capitalism as an economic system that recognizes and incorporates the inevitability of self-centered human behavior.
Similarly, both of my fathers agree on free trade, but for different reasons. John (a follower of Ayn Rand) sees free trade as a core principle supporting the productive individual who creates value and trades for other values with a reasonable party. While Dad (a Christian) agrees with Ayn Rand‘s assessment, he also sees the ultimate benefit of others. Trading value for value is a means to multiple bottom lines. It’s not charity, but it happens to benefit everyone. There really is such a thing as a “win/win.”
An article headlining this quote was published on Reason.com. Ronald Bailey makes a strong case for free trade and observes that most politicians do not subscribe to it, or cloud their support for it.
So why do people, especially politicians, believe the opposite? The 19th century French economist Frédéric Bastiat explained this sort of disheartening policy myopia his brilliant essay, “What is Seen and What is Not Seen.” People tend to focus on the seen consequences of a policy, in this case, competition from trade eliminating some jobs at relatively inefficient companies.
But they miss the unseen benefits, such as new jobs that result from increased average productivity. Naturally, the people who lose their jobs are worried and angry, so they call their member of Congress to complain about “unfair” trade. Fearing that they may lose their jobs, the denizens of Capitol Hill seek to enact legislation to block imports or mandate “Buy American” to protect their complaining constituents against “unfair” trade. In politics, as in much of life, the squeaky wheels get oiled.
Some of the clearest and most thoughtful rationale for free trade comes from the CFA Institute, an organization of which I am a member and a CFA charterholder. Still, I appreciate Bailey’s simple and straightforward explanation and I hope to hear more from Reason.com on the subject.