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April
22
2019

The Best Case For Free Trade Is a Personal One
Sterling Terrell

Business is personal. And all barriers to trade are restrictions on personal freedom.

The best case for free trade—the best argument in favor of unbridled commerce—might be a personal one.

Let me explain.

People Can Easily Get Lost in Facts

In making the case for something, like most people, I want to lay out facts and logic. As soon as anyone starts talking about economics, I immediately fall back on my formal training.

People can easily get lost in the facts.

A free-trade debate means I need to explain absolute advantage and comparative advantage—and freedom.

See, for obvious reasons, America’s almond trees are not grown in Arizona. (They require too much water.) For similar reasons, Switzerland is not the best place for a growing textile industry. (Textiles can be labor intensive, and wages in Switzerland are relatively high.)

But this discussion begins to lose people as quickly as I begin it. (Heaven forbid I start drawing a production possibilities frontier.)

People can easily get lost in the facts.

Personal Stories Are Persuasive 

Behind all the economic rhetoric, I have found this simple story a more persuasive case for free trade:

See, my father-in-law grows pecans. He works hard, and like every other small business owner, he is always on the lookout for the best place to sell his produce at the highest possible price.

Let’s pretend he goes on vacation to Paris one year. He has a great time, sees all the sights, and generally falls in love with the place. One night, he goes to a nice dinner and gets to talking to another gentleman in the restaurant.

They become quick friends, and my father-in-law soon finds out that his new buddy is a commodity importer. They do some back-of-the-envelope figuring and soon find themselves brimming with the possibility of doing business together.

Then, an American or French politician, or bureaucrat, steps between them and says: “Stop. You are not allowed to do that.” Just like that, they have a serious problem.

We have two people who want to trade and are willing to trade—but some regulation or quota or tax prevents it. Who would disagree with this simple freedom besides the special interest groups looking to influence policy and law to their own benefit or government stakeholders looking to tax it?

There is a temptation here to talk in national aggregates and disparage faceless corporations, but do not fall for this, for all trade—all business—takes place on a personal level.

Business is personal. And all barriers to trade are restrictions on personal freedom.

My first job after graduate school was selling cotton for a large independent cotton gin. While it is true that we sold most of our bales to some of the largest agricultural conglomerates in the world, I had eaten dinner with most of the people I was selling to. We had been to industry meetings together and frequently called each other just to chat.

Multi-billion dollar company XYZ might have been writing the checks, but my loyalty was to benefit—to trade with—a colleague I played golf with the week before.

Business is personal. And all barriers to trade are restrictions on personal freedom.

 

 

 

Sterling Terrell has three degrees in economics and blogs at SterlingTerrell.net.

  

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