August 21, 2008

WHY DOES THE LEFT HATE POOR PEOPLE?:

Free trade breakdown (Bjorn Lomborg, 8/21/08, National Post)

Establishing significantly freer trade would help the world combat its biggest problems. For a low cost, we could improve education, make the poorest people richer and help everybody become better able to tackle the future.

We have known for centuries that free trade almost always benefits both parties. The economist David Ricardo pointed out in 1817 that both Great Britain and Portugal would benefit if they exploited their comparative advantages. Portugal could produce wine cheaply, whereas Great Britain could produce cloth more cheaply than wine. By selling cloth and buying wine, Great Britain obtains more of both, as does Portugal. The same holds true today, when countries produce more and exchange it for more of all other goods.

Yet today, we are moving toward building bigger trade barriers. These barriers are supported by self-serving corporations, and defended by politicians who are scared that the redistribution of jobs and wealth resulting from freer trade will reduce their chances of remaining in power.

When the Doha trade round was launched shortly after September 11, 2001, there was plenty of international goodwill. But a recent Financial Times/Harris poll in the U.S., Germany, France, the U.K., Italy and Spain found people nearly three times more likely to say that globalization is negative than positive.

Recently, the Copenhagen Consensus project gathered some of the world’s leading economists to decide how to do the most good for the planet in a world of finite resources. The panel found that one of the best actions the planet could take would be completing the Doha negotiations. They based their conclusions on new research by Australian economist Kym Anderson.

Anderson showed that if developing countries cut their tariffs by the same proportion as high-income countries, and services and investment were liberalized, the annual global gains could climb to US$120-billion, with US$17-billion going to the world’s poorest countries by 2015.

The story only starts here. As economies open up, competition drives up rates of growth.


It seems like an awfully long time ago that Bill Clinton made his party stand for free trade instead of protectionism.

Posted by Orrin Judd at August 21, 2008 4:26 PM
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