Free Trade: The Best Path to Prosperity

Many proponents of government intervention in the economy often decry free trade as a tool of the wealthy that results in exploitation of the world’s poor. This position is based on an incomplete understanding of free trade which is often influenced by the rhetoric, manipulation, and misapplication of free trade policies by government officials and political opportunists. While few governments truly embrace the principles of free trade, there are many reasons for them to do so.

The doctrine of free trade says that people and goods should be able to move freely across borders with little-to-no restriction. Under ideal circumstances, this means that an individual seeking employment can go wherever his or her skills are most valued. This also means that artisans or merchants can export or import goods without the burden of tariffs. Ultimately, a society that embraces free trade is one that does not discriminate against people or goods because of their nation of origin.

As a result, free trade is a cosmopolitan rather than provincial idea. A society embracing free trade is one that is inclusive and diverse rather than exclusive and homogenous. A society built on such a principle will be exposed to a diversity of goods, ideas, and people from all over the world. Because of this, free trade breaks down barriers between people and nations. Trade unites those who would not otherwise interact. Since a society that embraces free trade allows individuals and goods to freely move across borders, it also promotes social interactions between individuals of different ethnic or cultural backgrounds. A society that embraces free trade will naturally come to reflect diversity.

While free trade promotes diversity in language, race, and religion, paradoxically it also builds bridges and creates a more unified culture with which people from different backgrounds can identify. In a society built on free trade, commerce and the unhindered movement of people will spread ideas, values, music, and countless other things that will lead to the creation of a culture that is truly global in scope. This global culture, or mass culture, will draw people together, unifying rather than dividing.

It can also be argued that free trade promotes world peace. German philosopher Immanuel Kant once noted that trading partners are less likely to go to war with each other. This is because free trade unites diverse people together through commerce. The more different economies are tied together, and the more freely individuals and goods can move across borders, the less likely people in one nation will view the other nation as a threat or enemy. The more different economies are tied together, the more dependent they will be on each other, and the more harm they will suffer from the destruction or loss of one of their trading partners. It is simply self-defeating to go to war with a valuable trading partner, since trade is voluntary and serves to promote the interest and profit of all parties.

Free trade profits both developed and developing nations. The demands of consumers in wealthy countries often spark investment in poorer countries in order to provide cheaper goods and services. As a result, companies set up shop in developing countries and create industries and jobs that did not exist before. Examples of this are call centers in India or textile factories in Latin America that supply goods and services to the United States. While many critics of free trade argue that wages in such industries are extremely low and unfair, ultimately such industries create jobs and answer the needs of consumers. While it is unfortunate that these jobs are low-paying, such low paying jobs are are nonetheless much better than (possibly nonexistent) alternatives. One way of looking at this is when developed nations invest in developing nations, what results is a natural redistribution of wealth from rich countries to poor countries. In different terms, such investment by developed countries provides capital which when combined with indigenous economic resources helps spur further economic activity. While workers in the developed countries might lose jobs, and workers in poor countries might appear to be underpaid, both parties to the exchange are freely engaging in a mutually beneficial activity.

So it seems that a society that engages in free trade will reap many benefits. While there are perils in embracing free trade—such as the fact that other nations might not reciprocate—we should hold it as an ideal to strive for. This is not simply because it promotes individual liberty and prosperity, but also because it will benefit the global community.