Are there good arguments against unrestricted free trade?

For me there are a number of things, one thing at least, I don’t know if an 18th century economic model is capable of setting a standard for 21 century financial instruments, for example, the whole mortgage backed securities debacle. If the costs and benefits are hidden inside some inscrutable and incredibly complex financial instrument, where no one really knows exactly what they are getting themselves into, is that something where the rules of the market as described by Adam Smith apply?

It is a matter of trust. Do you trust the market, do you think “the market” is actually capable of taking care of everything? Can the market really sort it all out for the best? Personally, I don’t think so.

None of the anti-glob people I know — including myself — object to free trade. What we object to is the free movement of capital in the absence of the free movement of people, ideas, and knowledge. A corporation can send your job overseas, but you are prevented from sending your union there. Small, exploited nations can send their fruit to prosperous nations, but can’t send their people. What the capitalists call “free trade” is not free.

If you knew the difference between theory and reality, you would not need to ask this question. Many of the arguments against free trade boil down to the fact that we humans can be sneaky, selfish dicks that continually prove The Law of Unintended Consequences.

@jerv, I should clarify what I am asking. I am not talking about complete laissez faire. I recognize that government intervention is necessary in many areas, like education and health care. I can see government investing in areas that are anticipated to become valuable, like alternate energy sources. What I am referring to is trade without tariffs or limits.

As someone whose politics is way left of center, I would like to hear the specifics of what can and does go wrong with unrestricted trade.

WalMart

Pollution is responsible for 40% of all deaths worldwide. Much of that is industrial waste, and that which is mostly caused indirectly by industrial and non-industrial business.

@incendiary_dan , The problem with pollution is that, without government interference, its cost is not borne by the producers. In a properly operating market economy, polluters would be forced to pay the costs of pollution and carbon emissions. I am completely in favor of government regulation, and one of the responsibilities of government is to recognize and assess hidden costs so that the market will operate in everyone’s best interest.

I think @SmashTheState has a very compelling argument. Free trade isn’t just the flow of goods. It must include the flow of people, ideas, and political freedom. I.e., if one country allows unions and the other doesn’t, then you don’t have free trade because one country has un unfair competitive advantage. If one country has regulations restricting pollution and the other doesn’t, then the country without restrictions has an unfair competitive advantage.

Notions of free trade that focus only on free flow of goods fail to meet their promise. But that is exactly what capitalists want. They want to reduce the price of their goods so they sell more and they can only reduce the prices by scrimping on clean air and clean water and workers’ protections and democracy. In other words, we, as consumers, are feeding off of the misery of others and worse, we are dirtying our own food bowl—eventually.

The cost savings are short term, and we are pushing the true costs on down the line to our children. They will have to deal with the pollution and the effects of oppression on workers in the third world nations that provide cheap stuff now. However, we can be hopeful that those workers will eventually stand up for themselves and for democracy and then the costs of production over there will rise in order to reflect the true cost of getting the work done.

Then competition will occur on a more even playing field. Only, since advanced nations are having to compete on the uneven field, when the field evens out, our productivity will give us a huge advantage.

When profit is your only motive, problems arise when the cheap options are damaging the environment, to specific groups of people, etc.

To second @incendiary_dan‘s point, alternative power production could not flourish without government incentives, because it is very expensive to achieve any kind of high output using methods like wind and solar. In pure capitalism, nobody would bother with these because it is so much easier to turn a profit with a coal plant. But (and I know this point would be argued by many, but this isn’t the thread for it) we need to move to alternative energy because of the damage fossil fuels do the environment, and because they are finite resources. How do we make a change like this in a completely free market?

My other bone to pick with pure capitalism is insurance; insurance companies left free to screw over the ill results in a sad, sick society.

A notorious example is the Irish potato famine of the 1840’s when it was more profitable to sell grain on the international markets than to use it to feed your own starving people. The government of the day thought the markets were supreme and not to be interfered with so causing the death of millions.

@Mariah “Alternative energy” doesn’t have a realistic EROEI ratio to be a real alternative to fossil fuels, nor are they environmentally friendly. The mining of rare earth minerals has left large areas of China unable to support life, for instance.

@LostInParadise Taxing corporations for killing and sickening people is your solution?

@incendiary_dan I’m mostly interested in wind and solar and the like. And no they’re not realistic yet but that’s why we need to devote more research to them.

@Mariah It’s probably not feasible when you look at it realistically, even if there were enough rare earth minerals and copper to keep an infrastructure of it going (and there aren’t). I highly suggest Richard Heinberg’s Searching for a Miracle, which really gets into the issue of energy returned on energy invested (EROEI). Not to mention that electricity can’t be used for a number of the things oil do today, which are basically integral to keeping an economy going (like growing food).

Another reason: the needs of the natural world and human beings (as if they’re separate) are more important than the needs of an economic system.

Look, I’m not saying I have all the answers. I just know that we have to change our fossil fuel useage (if not eliminate it) in order to make our lives sustainable. And to do that we need to put some real thought and time and money into it, even if it’s not necessarily the most profitable thing in the world (my original point). Thanks for the book suggestion.

Sorry if I sounded aggressive on that. Obviously I agree. It’s just that I don’t think any energy option is viable, because they all overlook the fact that increasing use of energy of any sort is impossible on a finite planet. All of the alternatives put forth by reformist mainstream environmental groups have the flaw that they all take industrial capitalism as a given, and then tack on saving a few trees at the end. Having clean air and water comes before having energy, and energy on any large scale is incompatible with clean air and water.

No, I agree that none of them are viable yet. I think lifestyle changes will be necessary. I do think there is hope with more research that we’ll come up with something, because I don’t think I agree with the term “finite planet” as the earth is not a closed system – there is always energy coming in from the sun.

But even that is at a relatively fixed rate. And like I said above, that energy isn’t just harvested out of thin air. It requires the constant exploitation of metals, which means mining, which is one of the most destructive practices in the industrial system.

Addendum: Lifestyle change isn’t viable, at least alone.

I happen to enjoy things like medicine, indoor plumbing, and video games. Not everyone wants to live in a cave and shit in a bucket. More than half of all the animal biomass on Earth is in the form of ants, so there’s no reason we can’t have a population of 70 billion or 700 billion as long as we’re prepared to live sensibly and sustainably in arcologies.

The elephant in the environmental room is the sheer number of human beings. A number that is steadily increasing with everyone aspiring to an energy rich life style like our own.

@SmashTheState Of course, any given piece of land can sustain more biomass of smaller animals than it can larger ones. Not that I don’t think we can sustain much larger human populations sustainably than some people think, but there is an upper limit, and that number can’t be achieved using industrial methods, which are inherently innefficient in terms of land and energy use.

I’m guessing your “live in a cave and shit in a bucket” comment was directed at me, as was your straw man about medicine and plumbing. Can’t argue with the video games, though.

@flutherother There might be too many humans on the planet, but that’s secondary (or maybe tertiary) to the fact that some humans are consuming too much and despoiling the environments of others.

@incendiary_dan Well it depends what you mean by ‘consuming too much’. 7 billion people can’t live the way people in the West live today, but perhaps 7 million could.

Market forces are not very good in terms of long term sustainability. Oil prices have been rising but not that steeply. My guess is that the price will increase astronomically only when it is too late to do anything about it. One way or another we will achieve sustainability. The question is how we go about doing it and how much long term damage to the planet will occur in getting there.

@flutherother In considering the consumption, the efficiency of it must be considered as well. Our food is grown using more land and tons of energy, but things like perennial polycrops can be used to grow much more per acre. Just requires being a bit more hands on. Living isn’t the problem, it’s all that other stuff.

I saw this article and thought of this conversation. It sums up pretty well what I was saying about the other materials involved in so-called “renewable” energy.

That article sums things up pretty well. Capturing energy of any type requires the use of other resources.