Free trade creates wealth, writes Gary Galles. But when free trade threatens the wallets of interest groups, support for government restrictions to protect them in order to assure "fair" trade suddenly blossoms--only because that sounds better than "gimme money." It is still just a form of welfare, which can only impoverish Americans by restricting our access to lower-cost sources of supply.
It is this economic law of exchange—not bombs, government spending, regulations, loose credit from the Fed, or stock-market scams—that is the source of wealth, health, and security in our world. Politicians care nothing about it because voluntarism is not what they are about. But economic law always has its revenge. It brought down the Soviet Union, and it will do the same to any state or institution that believes itself exempt.
Proponents of socially responsible investing, or SRI, promote it as a way to invest in stocks while having "positive social impact" at the same time. Beneath the surface, everyone knows that what SRI really promotes is old-fashioned socialist ideology employed in the name of investment.
The free market is not a panacea. It does not eliminate old age, and it won't guarantee you a date for Saturday night. Private enterprise is fully capable of awful screw-ups. But both theory and practice indicate that its screw-ups are less pervasive and more easily corrected than those of government enterprises, including regulatory ones.
What set in motion the explosive technological advance of the last 250 years was the world of ideas. Great thinkers began to understand the internal logic of the market economy and its potential for liberating mankind from poverty, dependency, and despotic rule.
While it is morally reprehensible to hate, in a true free market the freedom of citizens to associate with whom they wish must be upheld and private property rights must be enforced. There should be neither forced association nor forced disassociation. This is the social foundation of the free-market economy.
Typical Ph.D. economics student may be able to tell you lots about Kuhn-Tucker conditions, Hamiltonians, optimal control theory, undetermined coefficients, differential equations, and the like. They may speak fluently the language of mathematics and speak of sophisticated programs in GAUSS, SAS, and STATA. They may look at you with a curious bewilderment, however, upon the mention of Adam Smith. Perhaps you know of him.
Free trade is premised on the idea that human relationships should be voluntary and based on mutual consent. It is grounded on the understanding that the material, cultural, and spiritual improvements in the circumstances and conditions of man are best served when the members of the global community of mankind specialize their activities in a world-encompassing social system of division of labor.
Sometimes government agencies make mistakes and foist a project on us that does more harm than good. In the South, one doesn’t have to go far to see evidence of one of the more pervasive and persistent errors of the Soil Conservation Service—kudzu.
Consumer protection regulation is the consumer’s worst nightmare. In fact, it is not protective at all. It is merely another one of those regulatory rackets that has the appearance of providing necessary security for a collective group in an entirely positive sense while encompassing no negatives. After all, how can anything entitled "protection" have a downside?
