Last week I mentioned an article that didn’t approve of Free Trade. I didn’t approve of this article, so I thought it only right to show why I approve of free trade (although I’ve already done so here, here, here, here and especially here)
Matt Ridley, in his wonderful book The Rational Optimist, highlights how no one in the world knows how to make a computer mouse. In other words, if aliens were to kidnap a human, there is absolutely no one they could capture who could make a computer mouse for them. The designer might know the shape of the mouse, but not how the laser under it works. The programmer who figured out how the mouse’s movement makes the cursor move on your screen won’t know how either of the other parts work. Even if someone knew how these parts worked together, they would have no idea how to extract the oils to make the plastic, or the metals or the silicon that are necessary for making this mouse, let alone the machinery needed for this extraction.
So how are we able to have a computer mouse in every home and every electronics store? The answer, quite simply, is trade. Those who do know how to mine the metals then sell it to those who know how to smelter, cut and shape it. They then trade it with those who can combine it with the plastics all according to someone else’s design, programming and grand idea. There is nothing local about your computer mouse, or the screen you’re using to read this, or the phone in your pocket, or the pen right next to it, or your glasses, or that water bottle, etc. etc. etc.
At some point in time (generally speaking, around 2000 BC), someone figured out that if you combine 10 parts copper with 1 part tin you will get what we now call bronze. They then realized that Bronze was much more resistant than other known metals of the time. What’s extraordinary about this is that tin deposits during these times were concentrated in what are now Germany, Spain, France and Malaysia, while copper was found in Cyprus and Western Asia. This means that not only would trade have had to occur, but enough of it for people to be able to experiment mixing different amounts of each metal together.
In other words, Trade has been around for a long time and been involved in every major step of progress. Even today, it will be hard to find readers who would prefer to live in countries that engage in very little trade as compared to those with more trade (see map of WTO members here and decided for yourself if, on average, you’d rather live in a member or a non-member country).
And yes, Free Trade does stop wars. When countries are intertwined economically, there is much less chance they will engage in a war with each other. In fact, many wars have (arguably, I admit) started because of a lack of trade between various countries or regions. If you find yourself not agreeing with this statement just ask yourself, do you think war-torn countries such as Iraq, Afghanistan and North Korea were engaging in more or less trade than the more peaceful countries (The Global Peace Index says the top 3 are New Zealand, Iceland and Japan)? Again: which would you rather live in? Is this all just a coincidence?
In other words Free Trade has brought about progress for individuals and it has promoted peace while doing so. Of course there are problems that need to be fixed. Free Trade, as good as it is, is not a panacea. While all countries in the world (yes, all of them) are better off now than they were 100 years ago, some are much better off while others not so much. We should find a way to fix this so that the maximum number of people can live as well as possible. The answer is certainly Not to restrict trade, but to promote more of it.
I will end this with Matt Ridley’s words (in case you needed anymore convincing that his book is good):