This dreadful election season will spew forth many promises by politicians to "lead us into the future." I can hardly think of a worse fate for any society than to be led into the future by the political class of gangsters, marauders, looters, and liars. Fortunately, they haven’t the capacity to lead whole societies anywhere. They are outclassed and outrun by trends in the world economy that are beyond the ability of the political class to control or direct.
The new protectionists, writes Sudha Shenoy, want to reverse the outflow of US capital to China and India. But it cannot be done, which is good in the long run for everyone.
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.
Though politics may yet trump sound economics on this issue, writes Sean Corrigan, the Europeans know they are being blackmailed by the US into pursuing dangerously loose monetary policy (to add to the loose fiscal policies already being practiced by some of their governments). The biggest global spendthrift—usually the US—always expects his creditors to cut their own pockets so he can settle his bills with the coins falling out of them.
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?
