The freedom of free markets

Most human settlements are not self-sufficient. They produce some of the products that they use and need, but other raw materials and finished items must be brought from other places. Archaeological research into the earliest civilizations in Iraq, Egypt, and India reveal that materials and items were exchanged among those cultures. Trade has been part of human history for thousands of years.

Trade gives governments opportunities to raise money. Governments tax products that move, charging tolls for using roads and bridges and ports. Governments tax products when they are bought and sold. Governments place special taxes, called tariffs, upon products that come from other places. Tariffs accomplish more than offering income to governments. Tariffs sometimes discourage consumers from buying foreign products, encouraging them to buy the same products from local providers. Tariffs discourage the purchase of foreign products, even when local providers have no local substitute for the products in demand. Tariffs—and the threat of tariffs—can be used in negotiations between governments, even when the substance of those negotiations goes beyond trade and other economic considerations.

In the twentieth and twenty-first century, the United States government has inserted itself into trade arrangements and economic factors in several ways. Tariffs have been established on foreign goods to try to protect American jobs. Bans on export of certain items and technologies have been enforced to keep our Cold War enemies from gaining products that might help them defeat our nation. Assets of some nations and their citizens have been frozen and tourism to some countries has been curtailed to limit their economic success in efforts to change their governments’ policies. At the same time, trade agreements have made it easier for American products to be sold in other countries while products from those countries also were made available to customers in the United States.

Free trade benefits consumers, giving them more choices in the marketplace. Free trade benefits workers, giving more consumers access to their products. In the same way, free trade benefits corporations and the many investors who hold stock in those corporations. Free trade reduces strife between governments—until 2008 (when Russia invaded Georgia), there had never been a war or military confrontation between two nations that both had McDonald’s restaurants. To preserve free trade with its economic benefits, governments often will go to great efforts to resolve differences through diplomacy rather than through violence or threats of violence.

Yet free trade can cause problems for some participants. Sale of crops from one country in other countries can lower prices paid to farmers in those other countries. Underpaid factory workers in one country can produce products that are sold in other countries, reducing purchase of similar products in those other countries and possibly driving workers into unemployment. Aware of these risks, governments frequently work to create trade agreements that will benefit their own farmers and factory workers and also benefit their own consumers, seeking a balance between the competing needs of two groups which often overlap—auto workers who assemble cars, but who also want to buy the best car at the best price, no matter where it was made.

The chief concern is competition. But other factors deserve consideration. Laws in the United States provide workers with safe working environments and adequate wages while also prohibiting pollution of the air, land, and water. Countries lacking all those laws (or more permissive in their laws) can compete with the United States, producing products at a lower cost. Not only does this put American workers at risk of losing their jobs, but it also harms workers and residents in these other countries.

One new tariff might help to maintain the balance of keeping American workers at their jobs, providing affordable products to American consumers, and also helping the rest of the world’s consumers, workers, and residents. This tariff would require products—both agricultural and industrial—to pass an inspection established by the United States Congress. That inspection would ensure that work environments are safe, that workers are receiving an adequate wage, and that companies are not polluting the environment. A logo would be placed on the packaging of items that pass inspection; a tariff would be assessed on items that are not inspected or did not pass inspection. A higher, punitive, tariff would be assessed on any producer that used the logo without having passed inspection. Some American consumers would buy only products that have the “safe workplace” logo. Others might still seek the better bargain, but the tariff would bring the imported item more in line with American-made items in the competitive marketplace.

Free trade contributes to other freedoms. Governments still bear some responsibility to regulate trade for the good of consumers and also for the good of workers. A balance is not easy to achieve, but such a balance is desirable, and most of the world’s governments share an interest in finding that balance. J.