In some ways, it is beneficial that we have recently seen the idea of free trade resurface in national discussions because it gives us a chance to reassess whether what we have come to think of free trade is beneficial to us as a whole.
I’d like to postulate for a moment that what is currently billed as free trade probably isn’t. Sure, we can have our representatives negotiate trade deals and pacts with other nations, but the very fact that government commitments and world trade governance bodies are created leads to questions about whether the trade conducted under a global system is actually something that can be labeled as free trade, at least at the individual level.
Here, I refer to Cato’s Ranking of Human Freedom Index and filter it to look only at the economic freedom portion of the chart. Using this data as a general overview of the level of economic freedom in each of these countries, whether or not the trade between the US and countries could actually be labeled as free trade.
In reality, we appear to treat trade as more of a diplomatic pursuit, neglecting the object of commerce in the first place. The G20, for example, the regular meeting of the rosters of who’s who in governments across the globe to negotiate adjustments to and bring back trade regulations of everything from international commerce to central bank policies and force these down the throats of their constituents that is billed as free trade likely couldn’t be farther from it. In the US, from a constitutional perspective, the bypass of Senate ratification of trade amendments and the regulatory overreach of the executive branch involved in these, and the fact that binding arbitration happens in world bodies such as the WTO is quite stunning. This is loaded with as much or more big government as the gold standard ever was, and is off putting to someone like me who regards free markets with the same sort of zealotry as central bankers do inflation.
In the Federalist number 11, Alexander Hamilton tells us that international trade in itself is political, with the sorts of things that are agreed to having profound impact on the nation’s sovereignty and thus the welfare of its people. In fact, he marries this reality with the need for a navy, and sold the bill of goods known as the Constitution with the establishment of a navy as commercial enterprise which We, the people, would control and avoid the perils of becoming a vassal state. Considering the macro issues we’ve experienced of late, it is left to wonder who are masters really are and why most view at the navy as merely a tool to police the globe. Perhaps somewhere along the line we have indeed lost our way on trade.
[update] I have corrected the title and the link to the Federalist paper. I intended to refer to the Federalist #11, not 16.