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False Alternatives


It’s a classic false alternative: One side says trade policy should be made democratically by each nation. The other side says it should be made by a secretive international bureaucracy, the World Trade Organization.

Both are wrong. Trade policy should be made by and for each individual. That’s free trade.

Free trade was historically part of an integrated policy of laissez faire and nonintervention at home and abroad. That policy was born of an understanding that government, as George Washington said, is not reason but force and thus should be strictly confined to powers that are, in James Madison’s words, “few and defined.”

Contrary to most opponents of the WTO, the issue is not national sovereignty. It’s individual sovereignty. One ought not to oppose the WTO because “we” have the right to impose trade restrictions, labor rules, and property limits “on ourselves.” The national government is no more justified in trashing individual rights — including property rights — than a global bureaucracy is. The case against the WTO is this: individual rights are safest when power is fragmented and dispersed. That truth was embodied in the idea of federalism, which was supposed to scatter power among multiple branches and levels of government. That idea was killed around 1861.) The logic of federalism argues against world government or anything approaching it, such as the WTO. The point is that the ultimate safety valve for liberty-voting with one’s feet-is more practicable if jurisdictions are small. Under global governance, where exactly is one to go to escape tyranny?

The problem with the WTO is not the decisions its dispute-resolution process has rendered so far; they have been slanted against trade restrictions. Rather, the problem is in the very nature of bureaucracy, which knows only one rule: Perpetuate one’s own existence at all costs. A standing mechanism such as the WTO sooner or later will get around to making mischief. President Clinton’s wish to have the new round of negotiations include labor and environmental rules, complete with sanctions on (developing) countries that don’t comply, is a clear indication of the direction in which things will go.

Free trade is a straightforward notion that requires neither a bureaucracy nor thousands of pages of legalese. It is the proposition that individuals should be free to buy from and sell to whomever they please. The U.S. government could embrace this policy tomorrow by repealing all its tariffs and import quotas. Then each American household could write its own trade policy. Opening our markets is the objective of free trade, not the concession.

It is true that conditions are not as good in some countries as they are here. But that does not justify U.S. intervention, even under the cover of multilateralism. The great free-trade champions of the 19th century were not naive; they were aware of the poverty and oppression in foreign lands. But they were also aware that free trade was the surest way to dilute government power and increase freedom everywhere. Reform follows rising expectations. The expanded opportunities and increased incomes provided in the developing world by free trade will create the foundation of a middle class and demands for more freedom. Trade restrictions and labor rules doom people in the developing world to poverty.

It is easy for wealthy white Americans to demand the imposition of child-labor and environmental rules on the poor countries. They don’t plan on doing the suffering. But just as the United States went through a period when children had to work or starve and environmental cleanliness was not the highest priority, so must the developing world. As those societies accumulate capital and become more productive, incomes will rise, child labor will become unnecessary, and people will clean up their air and water. Poor countries have filthy environments. Keeping them poor does no favor to the children or their parents.

Both left and right have shown their shortcomings in the WTO debate. The left complains about the WTO’s limitation of national sovereignty, yet they oppose sovereignty in every other respect. Some parts of the right embrace the WTO, ignoring their traditional concern about the United Nations, while other parts join with labor unions and cry crocodile tears for the developing world, when in fact they want to scuttle low-wage competition. Hypocrisy is rife.

If liberty and prosperity are our standards, then one should favor unconditional free trade and oppose the WTO.

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    Sheldon Richman is former vice president and editor at The Future of Freedom Foundation and editor of FFF's monthly journal, Future of Freedom. For 15 years he was editor of The Freeman, published by the Foundation for Economic Education in Irvington, New York. He is the author of FFF's award-winning book Separating School & State: How to Liberate America's Families; Your Money or Your Life: Why We Must Abolish the Income Tax; and Tethered Citizens: Time to Repeal the Welfare State. Calling for the abolition, not the reform, of public schooling. Separating School & State has become a landmark book in both libertarian and educational circles. In his column in the Financial Times, Michael Prowse wrote: "I recommend a subversive tract, Separating School & State by Sheldon Richman of the Cato Institute, a Washington think tank... . I also think that Mr. Richman is right to fear that state education undermines personal responsibility..." Sheldon's articles on economic policy, education, civil liberties, American history, foreign policy, and the Middle East have appeared in the Washington Post, Wall Street Journal, American Scholar, Chicago Tribune, USA Today, Washington Times, The American Conservative, Insight, Cato Policy Report, Journal of Economic Development, The Freeman, The World & I, Reason, Washington Report on Middle East Affairs, Middle East Policy, Liberty magazine, and other publications. He is a contributor to the The Concise Encyclopedia of Economics. A former newspaper reporter and senior editor at the Cato Institute and the Institute for Humane Studies, Sheldon is a graduate of Temple University in Philadelphia. He blogs at Free Association. Send him e-mail.