Libertarianism 101: Free Trade

I'm not an economist ... and I don't pretend to be. When it comes to the economy, I believe in the free market - good old supply and demand. I'm also a consumer. I don't want to pay any more for an item than I have to. Likewise, I want a variety of choices - maybe I don't need a Cadillac and would prefer a Chevy. The best way to ensure the lowest prices and the largest supply is for the government (any government) to stay out of the marketplace. There should be no government-imposed price controls, trade barriers, or supply limitations.

But, some would say, how do we protect our industries from overseas competition where this competition is either subsidized by their government or their labor costs are far less than ours due to their lack of labor laws such as we have? And that's a pretty good question ... and my answer would be ... quality. If we make a better product that is more expensive, people who want that higher quality product will be willing to pay a higher price. Again, if we have choices in the level of quality in a particular type of good, there will always be a market for a high quality item.

My real concern with free trade are twofold:

1. Trade Unions

Trade Unions artificially raise the prices of our goods and services in overseas markets. Seventy-five years ago trade unions were a necessity as there were no labor laws to speak of. In a 21st century economy, trade unions seem to me to be more interested in sustaining themselves than they do in furthering the causes of their members or of their industry. They whine and cry about overseas competition yet appear to have no inclination to improve the quality of either their workforce or their product. Unions also penalize productive individuals and reward mediocrity. It's time for them to go.

2. Income Taxes

Our income tax structure keeps foreign employers from operating in the US and causes many domestic companies to set up their headquarters overseas. Requiring domestic firms to pay US taxes on their overseas sales is ludicrous. Other industrialized countries have no such provisions. Requiring our firms to artificially inflate their prices to account for this additional embedded tax raises our prices and hampers the expansion of our industries. Lower prices abroad mean more jobs at home.

For some other sources on Free Trade, check out these links:

• Free Trade FAQs


• North America Free Trade Agreement


• Free Trade & Globalization