I’m thinking in particular of the hyperinflation experienced in china under nationalist rule. Autarky under communist rule didn’t help but there are more than two choices in a complex world.

I’m sensing an “all things being equall” quandry. If there are 5 starving people and you give one of them a meal you have still helped since you haven’t made anyone life worse.

What’s being argued here is that there are times when free trade is not a net benefit to a country that allows it. Such is the case when those gains are funneled out of the country by a puppet gov. Or go entirely to a ruling elite

Benky

I disagree. I’m saying that judging free trade a success based on people getting what they wanted out of the deal is not the correct measurement unless the participants in the deal are capable of acting out of self interest.

You continue to miss the point. It’s not just a matter of “people getting what they wanted out of the deal”. It’s a matter of the difference between prosperity and poverty for many tens of millions of people. You’ve got to weigh the downside you’re pointing to against that upside, and the *magnitude* of that upside is highly relevant here, but nothing in your argument acknowledges it.

So it’s not about whether to feed my daughter it’s about am I doing my daughter a favor by giving her choosing? Compared to starving her, the answer is yes, only when she is able to make decisions less likely to kill her than not eating. So sometimes it’s better to starve my daughter than to let her choose to eat drain-o

Should we engage in open trade with a nation if the end result is a retreat from industries that allow for self sufficiency? The answer is yes, only when there are institutions in place that will realize that self sufficiency out of the gains from the trade.

Should we spend money on providing condoms in sub-Saharan Africa? Not until the people there stop seeing AIDS as an inevitability unrelated to sexual activity.

Ja,
Benky

Could you formulate an answer that does not rely on an assumption of rational choice?

Nothing here relies on the assumption of universal rational choice. The argument is not that all choices are rational; it is that we should not shut down a staggeringly effective force for good in order to prevent occasional bad choices.

Otherwise you are suggesting that my offering my 5 yr old daughter FOUR shiny metal quarters for the one flimsy Paper 5 dollar bill she got for Christmas from Nanny must be a fair transaction.

Nobody said anything about fair transactions; the question is what’s good for your 5 year old. And what you are suggesting is that because she occasionally chooses candy over broccoli, we should stop feeding her.

Education is free and even mandatory to at least an intermediate level. Communication and information is available at little or no cost and is instantaneous. And an open and free media often serves.

All of these institutions support rational choice. When these institutions are absent one can no longer assume that individuals will make choices in their own best interest, and the market advantage cannot be counted on.

Could you formulate an answer that does not rely on an assumption of rational choice? Otherwise you are suggesting that my offering my 5 yr old daughter FOUR shiny metal quarters for the one flimsy Paper 5 dollar bill she got for Christmas from Nanny must be a fair transaction.

That's too absolutist to make sense. What many people say is that *some* kinds of trade very consistently lead people to make choices that are bad in the long term, and that putting barriers in the way of those kinds of trade mitigates that problem, or that there are ways to mitigate the bad choice problem that act as barriers to that kind of trade as a side effect.

For example, properly informing people of the things they need to know in order to avoid a bad choice we can predict most people would otherwise make if they're not well informed, may require time and money, and require that time and money to be spent as a condition of engaging in a particular kind of trade may rightly be seen as a barrier to that kind of trade. Say we can determine that opening a minerals mine on farmland in an area with high illiteracy leads to a 40% chance of civil war within 25 years, but has only a 5% chance of leading to civil within 25 years if it is always preceded by certain steps such as opening enough schools and waiting 10 years until you have a certain level of literacy. Then, if country A decides to require that such mines not be opened until that is done, while country B decides to do it anyway, A has a long term advantage over B, but many proponents of "free trade" will decry A's restrictive trade barriers – even if A offers a deal to the mining companies that if *they* want to pay to educate the population, they can start their mines earlier. Those companies will just go to country B anyway.

This isn't a choice between "always allow everything" and "never allow trade at all", nor is it something universally applicable to all kinds of trade in all places and times.

You're trying to make a leap from:
* "When we find that something that should be beneficial usually causes a predictable harm, and we have some good ideas for mitigation steps, so let's take them even in some cases when they reduce or delay the expected benefit."

To:
* "When we find that something may sometimes be harmful we should always ban it completely."

The second does not logically follow from the first. But pretending that it does is a large part of what gives "free trade" such a bad name, and such a hit to its popularity.

1) If your argument is that we should not allow people to make choices that might turn out badly, then of course we should ban abortion, home ownership, jobhunting and marriage. When you ban trade to prevent occasional bad outcomes, you are cutting off pretty much the only escape route from Third World poverty. That strikes me as overkill.

2) If you value “sustainability” enough that you’re willing to condemn people to poverty to attain it, then of course that’s a value judgment that I can’t prove is wrong. But it is good to be aware that that’s the choice you’re making.

If I were to list the things that the poorest people in the world need most, trading opportunities and cheap food would be near the top of my list. To actively stand in their way, especially from the comfort of a middle class American living room, strikes me as callous in the extreme.

I think this is a gross over-estimation of people’s ability to behave logically, or to apply foresight to their decisions. While it might stand from an economic perspective, I would be surprised to find that it held any water from a psychological standpoint. I believe there is significant research indicating that humans’ ability to accurately judge risk, and make rational decisions based on the amount of risk they expose us to, sucks. I could imagine how someone with no relevant experience would have a hard time accurately assessing the risk posed by an eventual mine-closing, which would make it even harder for them to make a logical decision on giving up farming for mining.

The other problem I have is with the issue that Desiringsubject raised, the diminishing number of farmers around the world. (I’m having a hard time writing coherently about this, so I’ve put it second. I hope I’ve at least said *something* coherent.)

My area of expertise is not economics but food, and as an advocate of sustainable food (which I think must, at least in part, come from local sources, which means that food production can’t be uber-centralized), I have a hard time subscribing to a system that would exacerbate this trend.

What I mean to say is this: You assume that because the number of farmers has historically decreased, it will continue to, whether or not a mining company deprives a farming community of its farmers. But I, and I suspect others like me, would work to see that that doesn’t happen if we determine that it will have more negative than positive consequences. Which could translate into not supporting free trade. So if the question is, “Is free trade a good thing?” my answer may be different from yours based on the fact that you see a trend as inevitable, while I see it as impactable.

We do ban some cars to prevent auto accidents. Specifically, we ban really obviously dangerous cars, with bits hanging loose off the back and no lights or brakes.

Is there any room in your analogy for obviously dangerous trade? If all road-users had to sign a waiver saying they accept whatever safety standard the owner of the road chose to enforce, maybe we could be done with driver and vehicle licensing. But we don’t do that, because we still have some state-owned or commonly-owned resources.

Should I be banned from selling lit bottle-rockets in Times Square, presuming that I inform the purchaser that they are dangerous? Are all opportunities for trade mathematically provable to be a strict improvement on the situation were that opportunity not available?

Part of the confusion could be that in plausible example of mining in a “third-world” country I (a western mining concern) pay an unelected or only marginally-accountable despot some consideration in cash, weapons, and limousines. This entitles me to start forcing farmers off “their” land, either directly with force or by commencing the process of dumping toxic waste into the water supply. Once I’ve done that, their best option is to work for me.

It’s unclear to me that this necessarily makes the farmers “better off” in any sense other than “GDP is up, and they live in the country, so they participate in the average”. The farmers are worse off not because they made an economic mistake in discarding their farming skills, but because they were in the first place relying on a benefit external to the market (clean land and water), which the coltan trade gave me incentive to destroy.

Obviously in market-topia this cannot happen, since there are no despots, and either (a) there would be some mechanism to force me to compensate farmers if I damaged their property with my toxic waste, or more likely (b) they would be buying their clean water from whoever owns the aquifer, which I could attempt to purchase and thereby obtain the right to poison.

We might also choose to ignore the possibility of this happening in the real world, because we like trade and want to focus on its successes. In any plausible universe, however, it seems natural for Sierra to be able to identify specific cases where “adding a bit more trade” is harmful, irrespective of whether “adding even more trade, to a quite infeasible degree given who currently runs the country” would be beneficial.

When I think of the benefits of trade, I think first of all of the medieval European city-states, especially Venice and Florence; of Portugal and the Netherlands in the Age of Exploration; and of Hong Kong and Singapore today. (Also ancient Athens, Victorian Britain, and the USA, but they also had/have natural resources.) If the community postulated by Sierra did not have natural resources, they could still benefit by marketing their handicrafts. They would not grow rich as fast as Hong Kong and Singapore unless they have sea access (and some defense guarantee by the USA or some other power), but they would grow rich, and develop a stronger work ethic into the bargain.

The combination of free trade and natural resources otoh puts a country in a situation similar to that of Southern Italy, Wallonia, the American inner cities, etc, where vast welfare transfers from richer parts of the country have created a culture of dependency (with apologies to those who strive to get ahead in those parts of the World). Another comparison might be to somebody who suddenly comes into a vast inheritance: if he lets it go to his head, he might fritter it away and be worse off than before.