Wednesday, November 23, 2016

Free Trade Versus “Free Trade”

     The esteemed Joanne Nova discourses on this critical point:

     Just as carbon trading has nothing to do with a free market, so it is with monster free trade deals like the TPP. The free market meme won the intellectual debate of the 20th Century, but now its good name gets used and abused to sell the idea it defeated – bigger-government.

     A real free market deal has only one page and a bunch of signatures. But it takes a lot of pages to list all the unfree parts and to spell it out in sub-sub-clauses that hurt or help thousands of businesses around the world. Who gets the sweetest deal out of the complexity — the card carrying networkers — those who schmooze up to the right minister or bureaucrat. The people who compete on price or quality alone would win in a real free market, and so would we as customers. Instead the document rewards the gatekeepers, the rulemakers, the industry with the best lobbyists and the monied set who can donate enough to the right causes to get a better deal.

     Tipping the scales at 5,544 pages — and an astonishing 2,056,560 words — the trade agreement is one of the longest documents The Daily Caller has ever encountered. … The Bible: Authorized King James Version is 1,746 pages.

     If it were printed Breitbart estimates it would weigh 100 pounds.

     Concisely and perfectly stated. The pity of it is that Americans should need to learn this from an Australian. Well, at least she’s a brilliant Australian.

     Such a mountain of verbiage is a grand concealment mechanism for all the things that make for unfree trade: explicit provisions limiting this, forbidding that, and enabling an unbounded torrent of regulation according to what unelected bureaucrats deem “reasonable and proper.”

     Here’s a model for a true free trade agreement:

All laws that forbid, tax, limit or otherwise infringe upon trade between persons or organizations in the United States and persons or organizations in the nation of SomewhereElse are hereby repealed. All regulations founded upon any such law are nullified.

     But as Glenn Reynolds would say, that would offer insufficient opportunities for graft. So instead of free trade we have “free trade:” mammoth bills no Congressman or Senator has read that provide for essentially unlimited governmental interference in international trade, whether directly or by enabling subsequent regulation.

     In his classic work on management Up The Organization, Robert C. Townsend observes most pungently that complexity is the enemy of fairness. Complex rules are fertile ground for those adept at “playing the angles.” When the subject is legislation, complexity bestows an advantage on He Who Employs The Cleverest Lawyers. When complexity is combined with great volume, the winner will be the person or organization with the largest, best funded legal department – with a substantial discretionary fund for “entertainment,” of course – and woe betide anyone who seeks to compete with him.

     Keep that in mind as you review the fulminations of Establishmentarian figures and commentators who rail against Trump because he’s “against free trade.” And keep the overarching Townsendian observation in mind for when Congress is next asked to consider some gargantuan bill, hundreds or thousands of pages long, that purports to protect or promote freedom.


Peter said...

I'm very glad to see you mention Townsend's "Up The Organization". During my years in business, and through a post-graduate management diploma and a Masters degree in management, it remained my "business Bible". It's the simplest, most concise, most on-the-money guide to management and - more important - business leadership that I've ever read.

David Garrett said...

I have always thought that "Up the Organization" was an unrecognized work of genius in a field full of medeocrities. Sad to say, Mr. Townsend's ideas are still honored more in the breach than in the observance even 45 years after his book was first published.

David Garrett said...

I always considered "Up the Organization" to be a work of unrecognized genius in a field of medeocrities. Sad to say, a lifetime in the business world has shown me that Mr. Townsend's ideas are honored far more in the breach than in the observance.

Joseph said...

If Trump actual proposes such a free-trade deal, I might even vote for his re-election.