Is free trade a good thing? If so, for who?

[Svartalf]

Once the oil and gas run out, international trade will become impossible anyway. No more pineapples for us.

Rather, we'll have to re-learn two ancient skills that are lost to us these days: sailing and waiting.

I'd welcome the return of sailing ships and a more leisurely pace of life.

and you'd hire into the navy to benefit from the Great British Naval Tradition.

[PsychoSerenity]

Trade in general is a good thing, though Pappa has made some important points about how that can go wrong between countries. Everyone generally benefits from being able to exchange different goods of equal value, as resources can be spread more evenly.

What I don't think is a good thing, is allowing profit from trade. This profit is distinctly different from the general benefit to society, and comes from one person exploiting their better bargaining position over another, which tends towards concentrations of wealth. It's all a bit complicated because it gets to the philosophical definition of value.

I think one of the greatest problems in the world is the reduction of everything to the circular reasoning of free-market money-based value - that is, the market trades goods depending on their value, and the value of goods is determined by the market. For a start this only works on scarce resources, so very important things can be completely taken for granted until they start running out. And then you add the fact that people can be priced out of the market, and once they can't afford something they then have no economic influence over what it's worth. This again leads to concentrations of wealth to the extent that whole countries can be left without the economic power to feed themselves, or to acquire the technology necessary to improve their situation. And finally you get to the situation where the economy becomes more and more abstract - less connected with real world value - where business can be making profits and improving the economy by doing something that is completely irrelevant or even harmful to society. Once you get so abstract that the main things being traded are purely financial products, credit derivatives etc, the whole house of cards starts to fall down.

Note my disclaimer for this post.

[Pappa]

I don't think trade could exist without profit. Profit is was drives creative traders to create things to sell and markets to sell them in. I know great things can sometimes be free (such as open source software) but the majority of technological innovation, agriculture, and every other kind of trade would never have happened if driven people hadn't wanted to make themselves rich.

[Horwood Beer-Master]

Once the oil and gas run out, international trade will become impossible anyway. No more pineapples for us.

Get the staff to get their spades out Mr Huxley..,

http://en.wikipedia.org/wiki/Pineapple_pit

[Atheist-Lite]

I don't think trade could exist without profit. Profit is was drives creative traders to create things to sell and markets to sell them in. I know great things can sometimes be free (such as open source software) but the majority of technological innovation, agriculture, and every other kind of trade would never have happened if driven people hadn't wanted to make themselves rich.

Every innovation is different with it's own story. Some people are motivated by the reward and some are just tinkerers motivated by the problem. Damn, easy to kill the goose that lays the golden egg by feeding it too much paper.

http://www.spring.org.uk/2009/10/how-re ... vation.php

[PsychoSerenity]

I don't think trade could exist without profit. Profit is was drives creative traders to create things to sell and markets to sell them in. I know great things can sometimes be free (such as open source software) but the majority of technological innovation, agriculture, and every other kind of trade would never have happened if driven people hadn't wanted to make themselves rich.

Trade existed for tens of thousands of years before money, to the benefit of everyone. And you can still make a living through trade without profit. Wages are an expense to compensate for the work put in, which is accounted for before profit is calculated.

Yes perhaps greed has been a motivator throughout much of history, but when it comes at the expense of others, is it a good one? I would have thought a more psychologically positive motivator would be the knowledge that the work you do benefits the whole of society.

As for technological innovation, science, education - these are the things that benefit society without cost to anyone else. I think most of the overall improvement in material wealth that is often attributed to capitalism, is actually result of the increase in knowledge throughout the generations.

Edit: No sorry this is all a bit muddled.

[amused]

Owners of multi national corporations.

This is the end result symptom, but it's still not the root problem, at least in the US. Our political system has gerrymandered US congressional seats to the point that 85-90% of all incumbents win in any given election. The majority party has a lock on the seat, which frees that congressperson to pander only to the big donors, aka the 1%, aka multi-national companies. It's treasonous for a US congressperson to take money from foreign interests, yet they do it blatantly every day.

The only fix to this, and many of our other problems, is to outlaw gerrymandering and require that congressional districts be redrawn with the shortest perimeter length to enclose the appropriate number of people. Then we would have direct control of our government. Any vote by a congresscritter that didn't enhance the lives of their constituents would result in expulsion at the next election, possibly recall before then. Talk about responsive government. It would chaos and great!

Once every place on the planet had such a system in place, then we'd see incredible competitions between localities, and very unique collaborative efforts, driven by collective self interest at the hyper-local level.

[Hermit]

"When goods can't cross borders, armies will."

And then there is the (factually wrong) Golden Arches Theory of Conflict Prevention. It claims that "no two countries with a McDonald's franchise had ever gone to war with one another... The argument goes that when a country has reached an economic development where it has a middle class strong enough to support a McDonalds network, it will not be interested in fighting wars anymore."

Looking at the past, it seems tariff barriers are ultimately unsustainable. That was certainly the experience in Australia.

[Svartalf]

Technically, nothing is wrong with tariff barriers... assuming you're the size of China and have ALL the resources and technology at your disposal to live autarcically.
In the modern world, where few countries are able and willing to do without SOME kind of imports, that is of course not very practical... especially for resource poor island countries like Oz.

[Hermit]

resource poor island countries like Oz.

[Horwood Beer-Master]

I don't think trade could exist without profit. Profit is was drives creative traders to create things to sell and markets to sell them in. I know great things can sometimes be free (such as open source software) but the majority of technological innovation, agriculture, and every other kind of trade would never have happened if driven people hadn't wanted to make themselves rich.

I disagree.

Arguably one of the most creative and innovative periods of modern history was the Second World War - and the people behind that weren't motivated by profit. In fact I don't believe they were entirely motivated by wanting to help the war effort either, I think the main driver behind this burst of creativity and innovation was simply that the scientists and others were - for once - being given boundless opportunity and resources to get on with pushing the envelope.

Basically give the right people the right tools and they'll happily get on with the job - for many of them it's what makes them happy. And happiness in life is a great motivator - regardless of money.


And innovation's that are actually worth a damn don't require "creative traders" to market and sell them - they market and sell themselves.

[Hermit]

Arguably one of the most creative and innovative periods of modern history was the Second World War - and the people behind that weren't motivated by profit.

Now I'm trying to imagine the armaments industries all over the world ignoring the profit motive and producing aircraft carriers, guns, tanks, missiles and so on for the sheer joy of being innovative and creative, and their millions of employees going about their tedious, repetitive tasks without the thought of getting wages at all.

[Warren Dew]

Regarding the OP, I think true free trade, or the bastardised and unfair form of it we have in practice, is detrimental to the poorer countries of the world because it's not accompanied by an equally free movement of people. Rich countries can outsource their manufacturing and production to the poorest countries, keeping costs and wages artificially low by making the countries compete with each other to the extent that to be appealing Export Processing Zone countries need to viscously enforce anti-union laws and every other law that gives employees rights.

While free movement of labor would be a part of true free trade, the fact is that the poorer countries to which manufacturing is sometimes moved have benefited greatly even from the free trade we have. While people in the rich countries can pontificate about bad labor conditions, the fact is that those laborers are very glad of the chance to earn enough to support families and have a few luxuries, rather than having to work even longer hours just to keep from starving as used to happen.

Arguably one of the most creative and innovative periods of modern history was the Second World War - and the people behind that weren't motivated by profit.

Good point. I guess killing people is an even stronger motivation than having the money to live comfortably.

[Horwood Beer-Master]

Arguably one of the most creative and innovative periods of modern history was the Second World War - and the people behind that weren't motivated by profit.

Now I'm trying to imagine the armaments industries all over the world ignoring the profit motive and producing aircraft carriers, guns, tanks, missiles and so on for the sheer joy of being innovative and creative, and their millions of employees going about their tedious, repetitive tasks without the thought of getting wages at all.

I was thinking more the people inventing stuff - not the companies making it.

Also, how much choice and freedom did factories in Britian during the war have in whether-or-not they produced all those guns, tanks e.t.c? Weren't they effectively - if not technically - commandeered by the state?

[Horwood Beer-Master]

...

Arguably one of the most creative and innovative periods of modern history was the Second World War - and the people behind that weren't motivated by profit.

Good point. I guess killing people is an even stronger motivation than having the money to live comfortably.

If you'd read and understood the rest of my post you'd know I wasn't suggesting the war itself as the motive for innovation, but what the war resulted in (i.e. governments taking science seriously for fucking once).

I'm not advocating war - I'm advocating investment in science. Something companies motivated by profit only tend to do within a very narrow limited scope, with very little pure/blue-sky research (which is where the next massive big thing is always going to come from).