Free trade with China is always good for all of us – OpEd – Eurasia Review


By Anne Rathbone Bradley *

Despite the retreat of the left and the right, free markets must always be supported, as they allow people to live their full potential, even under despotic regimes like China’s.

Doug Irwin in his founding book Free trade under fire points out that Democrats and Republicans have historically hesitated on free trade. The Democratic Party from the late 19th century until World War II was the party of trade liberalization when Republicans consistently voted for high tariffs. From the 1950s to the early 1990s, there was a bipartisan consensus in favor of reduced fares.

Since NAFTA, a free trade agreement signed by President Bill Clinton, support for free trade between Democrats and Republicans has turned around. Unions have generally opposed free trade agreements, which helps us understand the shift in Democrats. Republican President Donald Trump has engaged in an all-out trade war with China and has run his presidency largely on an anti-free trade agenda.

In modern conservative circles, free trade is continually mocked and rejected, but not because of union objection. The conservative argument against free trade stems from a mistake, shared by Democrats, that trade between nations is a zero-sum game. I was recently at a Conservative conference where two alarming statements were made: “You can either have free trade or you can have free markets but not both” and “Comparative advantage does not work.” “

As an economist, these are shocking statements, both because they come from conservatives, whose economics I expect to understand, and because they are blatantly wrong. When I give a reasoned economic response, I’m sometimes referred to as a “globalist,” which I guess reading between the hyperbolic lines means I must hate America.

Nothing could be further from the truth. You can love your country and unabashedly support free trade anytime and under any circumstance. Free trade is about opening markets, and markets are about people. Guaranteeing the freedom to sell your ideas, your work, your skills and your talents is the best way to love your neighbor by serving him.

Free trade is the most successful anti-poverty program in the world. It opens up markets and brings goods and services hitherto unavailable and unthinkable. Free trade widens the circles of cooperation and allows us to both benefit and contribute to human development; it is our Christian duty. Free trade removes the shackles of subsistence agriculture and the drudgery of daily survival, and allows the possibility of human innovation and creativity to be shared across the world. Free trade takes us out of the zero-sum game of survival of the fittest and into the positive-sum game where all parties win, and where we are empowered with new choices and opportunities. These facts are not new; they refer to the ideas of Adam Smith, who wrote in 1776:

We are a commercially integrated world, and that makes us all better. Free trade is the prudent course of action because it means that we each produce what we can do relatively better. In this, we actualize our temporal comparative advantages and are thus freed from the production of things for which we would be producers at higher cost. This is the nature of stewardship, and it allows us to expand the circles of cooperation. If you wear a costume you didn’t make, you are a living example of a comparative advantage.

Yet there are strong objections to free trade and the shift from more closed to more open trade relations. British historian Thomas Babington Macaulay said: “Free trade, one of the greatest blessings a government can bestow on a people, is unpopular in almost every country. Most of the conservative objections I hear against free trade focus on our current geopolitical relationship with China. Let’s face it, China is not a bastion of free markets. Rather, it is a country ruled by authoritarians who hate freedom. It’s not just a bad thing for us; this is bad for Chinese citizens, who are all made in the image and likeness of God and have creative potential but live under the yoke of economic and political authoritarianism.

This is not an excuse to give up free trade with China; we need free trade with China more than ever. Since 1980, with limited internal reforms, China has lifted 800 million people out of abject poverty. China has gone from “not free” in the data on economic freedom to “predominantly not free”. Some progress is better than no progress, and the future remains uncertain.

There is great work to be done in China, and the world is anxiously watching its government engage in genocide and tyranny. But this is where economic thinking becomes necessary. China needs free trade more than ever. Our trade policy should be focused on how to do business with entrepreneurs in China without supporting their government and state-owned enterprises. We can hold the Chinese government accountable for its cheating and espionage without throwing out the baby with the bathwater. A creative regional trade policy can be part of the solution. But denying ordinary Chinese citizens a better life by denying them access to economic opportunities is never the solution.

Not so long ago, free trade skeptics feared that Japan would buy the world and have a bigger economy than ours. What economics teaches us is that every time a country makes internal changes in the direction of free markets, its economy will grow. This is a good thing, because as people in other countries get richer, they have more money to spend on the things we produce, and we have more entrepreneurs that we can benefit from. I argue that this is what we want in China: more trade that allows Chinese citizens to get rich. It is also the best deterrent against greater restrictions on freedom by the Chinese government.

Some fear that the Chinese economy will eclipse ours, to which economists respond: “I hope so”. China has a population 4.3 times the size of the United States. We should hope their economy is bigger. In a free market and political liberalism, it is an indicator of increasing wealth and prosperity. Free trade frees people, and that is what China needs. Free trade will unleash human creativity. What we can and must do is support free trade with people wherever possible. It is always time for free trade.

* About the Author: Anne Rathbone Bradley, Ph.D. is George and Sally Mayer Fellow for Economic Education and Academic Director of the Fund for American Studies. Through this position, Dr Bradley strives to enhance the impact and reach of the TFAS and FTE business education programs through courses, seminars, videos and social media. She also lectures nationwide and oversees the development and evaluation of curricula for economics courses. In addition to her role as Fellow and Academic Director, Ms. Bradley continues to teach impactful economics courses to TFAS students and regularly receives outstanding marks in student post-program evaluations.

Source: This article was published by the Acton Institute

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