February 23, 2017
The concept of “free trade” has acquired near religious status among policy types. All serious people are supposed to swear their allegiance to it and deride anyone who questions its universal benefits.
Unfortunately, almost none of the people who pronounce themselves devotees of free trade actually do consistently advocate free trade policies. Rather they push selective protectionist policies, that have the effect of redistributing income to people like them, and call them “free trade.”
The NYT gave us yet one more example of a selective protectionist masquerading as a free trader in a column this morning by Jochen Bittner, a political editor for Die Zeit. Bittner contrasts the free trading open immigration types, who calls Lennonists (in the spirit of John Lennon’s song, Imagine) and the Bannonists who are nationalists followers of Steve Bannon or his foreign equivalents.
The problem with this easy division is that the “free traders” wholeheartedly support very costly protectionist measures in the form of ever stronger and longer patent and copyright protections. These protections redistribute several hundred billions dollars annually (at least 3 percent of GDP in the United States) from the bulk of the population to the small group of people who are in a position to benefit from these government granted monopolies.
In the United States, the “free traders” in most cases also support the protectionist restrictions which severely limit the ability of foreign trained doctors and dentists and other high-end professionals from working in the United States. As a result of these protectionist measures doctors in the United States earn twice as much as their counterparts in other wealthy countries, costing us around $100 billion a year in higher health care costs.
The “free traders” in almost all cases supported the government bailouts of the financial industry which saved the banks from being held responsible for their own greed and incompetence. As a result of these bailouts a seriously bloated financial industry was protected from the market and was allowed to continue to siphon hundreds of billions of dollars annually out of the rest of the economy.
It is undoubtedly convenient for the self-professed free traders to ignore all the forms of protectionism that benefit them to the detriment of the rest of the society (including most of the “Bannonists”), but it is not accurate and it is not honest.
Yes, all of this is covered in my (free) book Rigged: How Globalization and the Rules of the Modern Economy Were Structured to Make the Rich Richer.
Comments