Free Trade: The Unsung Hero

From page 46 of Matt Ridley’s great book, The Rational Optimist:

The cumulative accretion of knowledge by specialists that allows us each to consume more and more different things by each producing fewer and fewer is, I submit, the central story of humanity. Innovation changes the world but only because it aids the elaboration of the division of labor and encourages the division of time. Forget wars, religions, famines and poems for the moment. This is history’s greatest theme: the metastasis of exchange, specialization and the invention it has called forth, the ‘creation’ of time. The rational optimist invites you to stand back and look at your species differently, to see the grand enterprise of humanity that has progressed – with frequent setbacks – for 100,000 years. And then, when you have seen that, consider whether that enterprise is finished or if, as the optimist claims, it still has centuries and millennia to run. If, in fact, it might be about to accelerate to an unprecedented rate.

A brand new perspective has occurred to me during the first 50 pages of this book: Trade is the unsung hero for humanity.

It’s something that everybody around the world does every single day, and it is the reason why human beings have reached a standard of living that includes more leisure and comfort than anybody else in any other era could only have dreamed about!

So it seems suspicious that Ridley would even have to write an entire book about this. Trade’s phenomenal transformative power already seems so obviously true, so self evident that a 359 page discussion on the topic just seems like the workings of a sadist.

But books like Ridley’s or even simple YouTube videos like Milton Friedman rehearsing Leonard Read’s masterpiece, I,Pencil, are necessary! This kind of stuff quite literally changed the way I perceived the world upon coming out of my 12 year stint in the government-run education indoctrination camp. And, on this blog, I suspect I am not alone.

On the other hand, “Fashionable opinion” on free trade is a far cry from the stuff of Ridley’s book; it seems to be either hostility or ignorance. But ignorance in a more eerie sense than mere apathy; more like the people who show up on our TV and computer screens have all implicitly agreed to some sort of conspiracy to simply pretend like none of this kind of stuff exists…

I’m going to continue reading Ridley’s book. But every page frustrates me for the sincere belief that this ought to be common knowledge. Ridley isn’t inventing his own profound theories here; he’s simply saluting and bringing attention to a phenomenon which is as powerful and invisible as electricity: Free trade.

Happy Constitution Day

Via Lawrence Reed‘s Facebook page:

Happy Constitution Day! Delegates to the Constitutional Convention signed the document 230 years ago today in Philadelphia.

“The government of the United States is a definite government, confined to specified objects. It is not like the state governments, whose powers are more general. Charity is no part of the legislative duty of the government” — James Madison, Speech before the House of Representatives during a debate in 1794 over a proposal to send federal aid to Saint-Domingue (now Haiti).

Beyond Stage 1–Income Inequality

Jordan Peterson recently went on the Joe Rogan Experience and talked a little bit about income inequality.

And although he wasn’t nearly as mistaken as a committed leftist on this issue, I did sense that the two share a common, basic premise.

Deep down, Peterson seemed to agree that governments need to tackle the problem of income inequality, albeit in a way that doesn’t hurt the economy’s efficiency. Peterson doesn’t think “we” know how to do that, yet.

This is quite a popular mentality when it comes to income inequality, and utterly dominates the political left.

I call this Stage 1 thinking: Identify an uncomfortable attribute of a country’s economy, such as the large variations in economic well-being amongst all the individuals; point to research that says income inequality drives crime; call on politicians to figure it out.

Clearly, Stage 1 rests on an assumption that “government” is an institution staffed with wise, doctor-like technicians standing on-call to heal the market economy from its own inherently fatal diseases.

But are we really to be so naive as to join the chorus and implore the politicians to end their wicked timidity in solving this issue? Have politicians in the government really just sat by all these years in commitment to laissez-faire principle and let their constituents become more and more unfairly unequal? Are politicians ever reticent to jump in and interfere with the economy when they can buy some more votes?

At this blog, readers are already aware of a thousand different arguments against government “solutions” to income inequality: such things as the difference between malicious political entrepreneurs and productive market entrepreneurs; that government policies (like printing money and handing it out to banks…) are already driving income inequality; that income inequality can go hand-in-hand with rising living standards for all groups of people; that income inequality statistics are often (intentionally?) misleading; that government “solutions” are always laden with unintended consequences that will eventually justify their own set of boondoggled surgical policy procedures; and on and on…

In other words, far from contriving some ingenious plan to tackle inequality, the best thing governments could do is to drastically reduce the strain and disruptions they’re already piling onto their economies.

There are countless reasons why we object to the idea that it ought to be a politician’s role to keep a watchful eye on the levels of income inequality. But these reasons are so far outside of the purview covered by the Stage 1 radar, and unfortunately the left seems more and more entrenched in this mode of thinking by the day.

Joining the Force!

I do not remember how I stumbled onto Jon’s blog back in its infancy when “.wordpress.” was still part of the URL. This was probably two or three years ago, and at the time I was attending Western Michigan University as an undergrad in Economics.

I think I felt a close connection to Jon because, apart from our similar viewpoints on economic and political subjects (and our infatuation with the New England Patriots!), he seemed to possess the same sort of love and respect for the study of economics that I did. And more importantly, he was talented at that very difficult task of applying the lessons of economics to modern-day fallacies in clear English!

Now add in the fact that we were close in age. In my small walks of life, it’s been tough to find a fellow my age who can carry a conversation involving economic reasoning for more than a fleeting moment before their eyes glaze over in pure boredom!

So I was an immediate fan of Jon and his blog. I’ve followed him pretty much since day 1 of his site.

For myself, I am not an economist nor am I enrolled in any economics program. After I graduated from High School, I spent some time in community college and then at Western Michigan University, actually intending to follow in Jon’s footsteps and one day pursue my Ph.D. in the field.

I will spare the readers the details of my unhappy experience in college! I am now working for my family business in the beautiful town of St. Clair, MI, where I am apprenticing to become an electrician.

Economics, though, is still a tremendous passion inside of my heart, and Jon was kind enough to bring me on as a co-author to his site. Needless to say, anything I upload to this site is my own opinion, and not that of Jon’s.

Thank you very kindly, Jon, for bringing my on to write in front of what I can only imagine is an impressively academic audience. And to the readers, I hope what I have to say will interest you!