Free Markets

Concerns over safety and pollution are merely protectionist tactics to keep out imports from Mexico, writes Gary Galles.

In a private educational setting, with no government meddling, individual schools could set their own policies, writes Robert Murphy.

The trend over the past fifty years has been for a gradual reduction in the number employed in manufacturing, says Jude Blanchette, but both output and productivity have increased.

It may be fashionable to blame the market economy for all of society's ills, writes Art Carden, but this blame is undeserved and many scholars' faith in alternatives to the market is misplaced. No socialist regime has ever held a free election, and no free market has ever produced a death camp. Popular academic opinions to the contrary, the market works. And we can take that to the bank.

The period from the onset of World War I until the demise of the Soviet empire in 1991 has been called the "great parenthesis" in western history, writes JG Hülsmann. The United States offered virtually the only safe haven for capital investments. Among the beneficiaries of this somewhat artificial increase of the capital stock were the American wage earners. Now this epoch is drawing to an end--to the ultimate benefit of all.

If the benefiting consumers from an innovation are largely outside of a given country, writes Robert Murhpy, then it is indeed true that the people in that country might actually be poorer as a result of the innovation. But in that case, no trade policy can change things. On the other hand, if enough of the benefiting consumers are inside a particular country, then the people in that country are helped (on net) by the innovation.

Mateusz Machaj, founder of the Mises Institute, Poland, argues that international trade theory isn't a stand-alone topic. It is a practical application of general trade theory to trading between persons from different countries. There is no difference between mobility of factors of production inside or outside a country.

Beware of trade restrictions, writes N. Joseph Potts; they are often followed by war. Iraq is only one case. The United States embargoed sales of scrap iron to Japan before the war with that country began in 1941, and probably worse, secretly colluded with Britain, China, and the Netherlands (which at the time controlled oilfields in Indonesia) to deny petroleum resources to Japan, a step still cited today in Japanese accounts of the causes of its war with the United States.

Some distinguished theorists have lately entered into a debate over the merits of free trade after two of them had suggested that "free trade has necessary conditions" and "today these conditions are not met". In particular, they mean that David Ricardo's law of comparative advantage don't hold if the "factors of production" are free to move around, particularly if money and laboring persons are able to move faster than goods. Thus, in a way, this argument says that since people are free to move around, move their money around as well as their goods, free trade is bad. But how can it be that free movement of persons, money and goods is bad for free trade? How can it be that free trade is bad for free trade?