Saturday, July 20, 2013

Where true free-trade exists (and videos)

There is a place where true free-trade exists. Where individuals transact across borders as freely as they transact across a city street. We call this place the United States. The Constitution (Art. 1 Sec. 10) forbids protectionism between the states.

Interesting... So the founding fathers were concerned that political boundaries (lines seen only on maps) in the U.S. could somehow be used to erect barriers to trade; that politicians might collude with businesses (and trade unions) to limit their residents' freedom to enjoy the produce of other states. Thank God, with regard to interstate commerce, they were thinking!

"Trade deficits" abound within the U.S.: Alaskans eagerly import all the California fruit, nuts, technology and entertainment they can consume, while Californians have minuscule (by comparison) interest in the stuffs produced in Alaska---and nobody gives it a second thought.

Fascinating! Where the freedom to transact across borders is entirely unfettered no one makes a stink about trade imbalances. Why? Because we know intuitively that to engage such nonsense would (at best) benefit special interest groups at the expense of the everyone else.

So why then do we betray our intuition when it comes to international commerce? Why do we view exchanging the initial result of our productive efforts (U.S. dollars) for the product of (for example) a Chinese company at all differently than we do an Alaskan exchanging with a Californian? Well, "we" either desire protection for our particular industry or we are pawns of the colluders mentioned above.

Here, once again, is how that happens:

No comments:

Post a Comment