Exchange of goods and services without barriers
See also:
  • FreedomPedia
  • Free trade is a policy followed by some international markets in which countries' governments do not restrict imports from, or exports to, other countries. Free trade is exemplified by the European Economic Area and the Mercosur, which have established open markets. Most nations are today members of the World Trade Organization (WTO) multilateral trade agreements. However, most governments still impose some protectionist policies that are intended to support local employment, such as applying tariffs to imports or subsidies to exports. Governments may also restrict free trade to limit exports of natural resources. Other barriers that may hinder trade include import quotas, taxes, and non-tariff barriers, such as regulatory legislation.

    Web Pages

    Free Trade - Online Library of Liberty
    Links to 28 locally hosted titles (books and essays) that discuss free trade
    "One of the key concepts of free markets and economic freedom is the idea of 'free trade', i.e. there should be no restriction whatsoever in the right and ability of individuals to exchange the products of their labor and industry with other people, either within the borders of the nation state or internationally."

    Articles

    A Free-Market Constitution for Hong Kong: A Blueprint for China [PDF], by Alvin Rabushka, Cato Journal, 1989
    Discusses the draft of the Basic Law of the Hong Kong Special Administrative Region, expected to be promulgated in 1990 (actually adopted 4 April 1990 and went into effect 1 July 1997), as a "free-market constitution"
    "Specific articles are written to ensure that the HKSAR shall continue to do business on the basis of external free trade, and to that end the free movement of goods, intangible assets, and capital shall be maintained. Foreign investment shall be protected by law. The region shall remain a free port, true to its historical founding principles dating back to 1841. Finally, the HKSAR shall practice free and open policies regarding industry, commerce, and other trades."
    An Essay on the Influence of a low Price of Corn on the Profits; shewing the Inexpediency of Restrictions on Importation: With Remarks on Mr Malthus' Two Last Publications, by David Ricardo, 1815
    "The principles which regulate rent are briefly stated ... The consideration of those principles, together with those which regulate the profit of stock, have convinced me of the policy of leaving the importation of corn unrestricted by law."
    Blockading with Trade Restrictions, by Jim Powell, 27 Oct 2010
    Explores the writings of Henry George in his book Protection or Free Trade offering advice to current waves of protectionism
    "A whiff of protectionism is in the air. Battered by the recession, many Americans are beginning to blame some of their woes on foreigners. There's talk that the federal government ought to take action against Chinese, Japanese, Mexicans, Europeans and others. ... Such observations inspired George’s most famous lines: 'Protective tariffs are as much applications of force as are blockading squadrons, and their object is the same — to prevent trade. ... What protection teaches us is to do to ourselves in time of peace what enemies seek to do to us in time of war.'"
    Related Topics: Henry George, Monopoly, War
    Bush as Fake Free-Trader, by Sheldon Richman, 28 Nov 2003
    Comments on President George W. Bush's claim to being a free-trader while at the same time imposing quotas and tariffs on products from China
    "Here's what the counterfeit free-traders don't want you to know: We should open our markets not primarily to get others to open theirs, but rather to enjoy the fullest array of the world's products. Our standard of living is determined by the accessibility of the goods and services we want. Opening our markets means that we are free to buy what we want from whomever we want. In that way we can get the most from our incomes. That's the route to prosperity."
    Claiming Paine, by Katherine Mangu-Ward, Reason, Jul 2007
    Review of the book Thomas Paine and the Promise of America by Harvey J. Kaye
    "There's another facet of Paine that's missing here. Kaye's book is filled with anti-business rhetoric, but nowhere does it quote Paine inveighing against commerce. In fact, Paine seems to have held an early version of the McDonald's theory of democratic peace: the idea that trade is the ultimate pacific force, as evidenced by the scarcity of wars between any two nations where you can buy a Big Mac. 'If commerce were permitted to act to the universal extent it is capable of, it would extirpate the system of war, and produce a revolution in the uncivilized state of governments,' he wrote in Rights of Man."
    UpdCobden, Richard (1804-1865) | Encyclopedia of Libertarianism, by John M. Brady, The Encyclopedia of Libertarianism, 15 Aug 2008
    Biographical essay
    "The Manchester Anti-Corn Law Association was organized in September 1838, and its successor, the Anti-Corn Law League, in March 1839, to seek repeal of the onerous duties on imported grain. This tax kept domestic prices high for the benefit of those who owned land ... However, this tariff impoverished consumers, particularly those poor households, for whom bread was a principal part of their diet. ... After 7 years of assiduous organization and unrelenting agitation both inside and outside Parliament, the league was finally successful in its campaign to repeal the 'bread tax' and so deny the 'breadstealers' further ill-gotten gains."
    Related Topics: Richard Cobden, War
    Economic Nationalism, Enemy of the People, by Sheldon Richman, 17 Nov 2006
    Explains the benefits of free trade and the perils of protectionism in the wake of the 2006 U.S. elections which saw several Democrats elected for their nationalist stances
    "The key to understanding the case — and the need — for free trade is contained in a single word: scarcity. At any given time we don't have nearly enough labor, resources, and capital to make all the things we want, including the things we don't yet know we want. So nature forces us to choose among competing desires. We'd rather not have to do that, but that's the world we're stuck with."
    Examining Reagan's Record on Free Trade, by Sheldon Richman, The Wall Street Journal, 10 May 1982
    Analyses several actions by the Reagan administration that belie Mr. Reagan's alleged pro-free trade stance
    "Mr. Reagan wants to be known as a free-trader. Indeed, he lists as heroes some of history's foremost free-traders: Frederic Bastiat, Richard Cobden, Ludwig von Mises and F. A. Hayek, all of whom would find import quotas odious. ... How ironic that Mr. Reagan, admirer of free-traders, has yet to discover the senseless self-deprivation of protectionism and the imperative of immediate elimination of U.S. trade barriers."
    Related Topic: Ronald W. Reagan
    Frederic Bastiat, Ingenious Champion for Liberty and Peace, by Jim Powell, The Freeman, Jun 1997
    Lengthy biographical essay, covering those who influenced Bastiat as well as those influenced by him, his writings (including correspondence with his friend Félix Coudroy), his roles in the French Constituent and Legistative Assemblies and his legacy
    "Cobden and Bright persuaded Parliament to unilaterally abolish grain tariffs without asking concessions from any nation, including France, which had fought England through many bitter wars. Cobden and Bright had made a compelling case that free trade would benefit England, especially poor people who needed access to cheap food, even if other nations kept their borders closed. Moreover, they maintained, unilateral free trade would contribute to international peace by taking politics out of trade ..."
    Free Trade or Protectionism?, by Vincent H. Miller, 1988
    Henry George and the Tariff Question, by Karen DeCoster, Mises Daily, 19 Apr 2006
    After some introductory remarks and a biographical section on Henry George, examines the protective tariff arguments posed by George in Protection or Free Trade
    "George holds up free trade as the natural condition. That is, men, when unaffected by artificial restraints, instinctively engage in free exchange whereas protection is a fabrication of mankind, and therefore is not native to our state of being. ... The protective tariff is popular due to the misconceptions that surround its potential for accruing benefits to the populace. ... One of the fallouts from a tariff is its capability to act as an agent for hidden redistribution."
    Related Topic: Henry George
    How Much Do You Know About Liberty? (a quiz), The Freeman, Jun 1996
    A 20-question quiz (with answers) on various topics related to liberty in the history of the United States
    "Why did 61 nations raise their tariffs on American products after 1930? ... Nations raised tariffs on American products as retaliation against the Tariff Act of 1930 (Smoot-Hawley). ... America's long-time friends and military allies like Canada, Britain, and France were as angry as everyone else. Overall, following Smoot-Hawley, U.S. exports plunged as much as 90 percent."
    Is Free Trade Obsolete? Part 1, by Sheldon Richman, Future of Freedom, Apr 2004
    Comments on a Paul Craig Roberts and Charles Schumer article arguing against free trade, introducing first the law of comparative advantage
    "The people of a country will not find it to their interest to make everything they want, because to do so they would have to divert resources from activities in which they have a greater advantage. The price system will lead them to discover that they can be richer if they specialize where their advantage is the greatest and buy the rest from others."
    Is Free Trade Obsolete? Part 2, by Sheldon Richman, Future of Freedom, May 2004
    After providing a numerical example of the law of comparative advantage, defends it from the argument that movable factors of production make the law no longer applicable
    "Americans now face new competition in lines of work that were formerly sheltered not by U.S. protectionism, but by foreign tyranny. ... Americans ... can resent that progress, arrogantly claim that high-tech jobs belong to Americans, and lobby for protectionism ... Or they can lobby for an end to the mixed economy that holds down investment and wealth creation."
    Mexico's Advanced Auction on Stolen Goods, by Christopher Westley, Mises Daily, 10 Jul 2006
    "With free trade, such resentment would not exist today. But the fact is that for many countries, trade with the United States requires IMF and World Bank loans and comes with strings that reward politically well-connected industries. Indeed, if trade were truly free, it wouldn't require trade treaties (such as NAFTA and CAFTA) with tens of thousands of pages ..."
    Related Topics: Mexico, Voting
    National Servitude, by Sheldon Richman, 21 Jun 2013
    Examines calls for "national service" and contrasts them to insights from Frédéric Bastiat and Adam Smith
    "As the early French economists liked to say: Society is exchange, and exchange is mutually beneficial. Exchange is at the very heart of a civil society based on voluntarism and free markets. ... Each individual wants things in order to live the sort of life she wishes, things she wouldn't be able to make herself. In a free society, no one may compel another to work for her benefit."
    Our Secret Desires, by Frédéric Bastiat, 1848
    Originally "Abondance, Disette" (Abundance, Scarcity), an essay in Economic Sophisms, translated in 1964 by Arthur Goddard
    "Do we make cotton textiles? We wish to sell them at the price that is most advantageous for us. We should heartily approve the proscription of all rival manufacturers; and though we do not dare to express this wish publicly or seek its full realization with any likelihood of success, we nevertheless attain it to a certain extent by roundabout means: for example, by excluding foreign textiles, so as to diminish the supply, and thereby to produce, by the use of force and to our profit, a scarcity of clothing."
    Related Topics: Labor, Money, Prices
    UpdPaine, Thomas (1737-1809) | Encyclopedia of Libertarianism, by David Fitzsimons, The Encyclopedia of Libertarianism, 15 Aug 2008
    Biographical essay discussing the main themes in Paine's writings
    "Liberal republics, Paine argued, are held together by commerce, rather than status or virtue. Commerce was beneficial to both the citizens and the state; it contributed to the wealth of nations and helped protect liberal governments from internal counterrevolution and invasions by despotic powers. International trade has a 'civilizing effect' on all who participate in it; additionally, it would 'temper the human mind' and help people 'to know and understand each other.' Commerce encourages peace by drawing the world together into mutual dependency."
    Related Topics: Thomas Paine, The State, War
    Richard Cobden: Activist for Peace, by Gary M. Galles, 19 Feb 2003
    Examines Cobden's arguments for trade liberalization, with extensive set of quotations
    "Further, Cobden saw free trade as the basis of peace, rather than government controlled trade, which often led to war, and to the moral and economic harm of people. And, indeed, the period of liberalized trade coincided with one of the most peaceful periods in history."
    Related Topic: Richard Cobden
    Richard Cobden's Triumphant Crusade for Free Trade and Peace: With Trade Liberalization, England Prospered, by Jim Powell, The Freeman, Jun 1995
    Extensive biographical essay, including Cobden's relationship with John Bright as they campaigned for repeal of the Corn Laws, and his later peace activism
    Related Topic: Richard Cobden
    Substance, not style, by Daniel Koffler, 9 Feb 2008
    Contrasts several of Obama's issue positions with those of Hillary Clinton and argues his approach could be called left-libertarianism
    "At the moment, Obama's and Clinton's positions on trade are roughly equivalent - both deserve credit for taking initial steps toward dismantling the obscene US government-supported agricultural cartels - but the present dynamic is Obama moving more and more in the direction of economic freedom, competition and individual choice ..."
    Related Topics: Health Care, Barack Obama
    Teaching Basic Economics to Fifth Graders, by Arthur E. Foulkes, Mises Daily, 21 Jun 2006
    Recounts the experience of teaching economics to fifth graders, one concept per week, for five weeks, focusing on trade, money, savings, competition and prices
    "... they seemed to clearly understand that exchange involves giving up something you value less for something you value more and finding someone else with opposite valuations. ... One student was happy with the [forced] exchange, the other unhappy. This allowed us to discuss the idea of a 'fair' trade — which I defined as a trade where both parties voluntarily take part."
    Related Topics: Children, Economics, Money, Prices, Wages
    Tear Down the Trade Walls, by Sheldon Richman, 22 Apr 2005
    Reflections on free trade sparked by Ukrainian president Yushchenko's remarks to the U.S. Congress
    "As noted, trade issues are simple. We produce so we can consume. Everyone knows that. Likewise, we sell so we can buy. National boundaries do not change that truth. Thus we export so we can import. And that means an open American market is, first, a benefit to American consumers. Of course, foreign sellers also benefit. But that is the nature of trade. Two parties to an exchange expect to benefit or they do not trade."
    Related Topic: Ukraine
    The Case for Free Trade, by Milton Friedman, Rose D. Friedman, Hoover Digest, 30 Oct 1997
    Discusses various arguments made about tariffs, protectionism and foreign exchange intervention, concluding with advocating completely free trade
    "Ever since Adam Smith there has been virtual unanimity among economists, whatever their ideological position on other issues, that international free trade is in the best interests of trading countries and of the world. Yet tariffs have been the rule. The only major exceptions are nearly a century of free trade in Great Britain after the repeal of the Corn Laws in 1846, thirty years of free trade in Japan after the Meiji Restoration, and free trade in Hong Kong under British rule."
    Related Topic: Prices
    The Colonial Venture of Ireland, Part 1, by Wendy McElroy, Future of Freedom, May 2004
    Historical account of Ireland from its earliest inhabitants, through various invaders, conflicts with the English and between Catholics and Protestants, to the mid-nineteenth century
    "As commerce flourished, merchants and manufacturers began to resent British mercantilism under which Northern Ireland would produce raw materials and goods, many of which could be shipped only to England. In turn, England enjoyed a monopoly on selling many goods back to them, and industries that threatened English interests were outlawed. The supposedly loyal Ulstermen paraded two cannon with placards that read, ';Free Trade or This.' The British Parliament loosened trade restrictions."
    Related Topics: Thirteen Colonies, Ireland
    The League and Sir Robert Peel, by Richard Cobden, 15 Jan 1846
    Speech to the National Anti-Corn-Law League, discussing their work over the past seven years and predicting immediate repeal of the Corn Laws in the upcoming session of Parliament
    "I look farther; I see in the Free Trade principle that which shall act on the moral world as the principle of gravitation in the universe, - drawing men together, thrusting aside the antagonism of race and creed and language, and uniting us in the bonds of eternal peace. ... I have speculated on what the effect of the triumph of this principle may be. I believe that the effect will be to change the face of the world, so as to introduce a system of government entirely distinct from that which now prevails."
    Related Topic: Free Market
    The Life, Death, and Resurrection of an Economy, by Michael C. Monson, The Freeman, May 1993
    Lengthy economic history of Argentina, from the time of the conquistadors to the early 1990's, highlighting the outstanding growth in the 19th and early 20th century and the economic nationalism and government interventions in the 20th century
    "Because the merchant-monopolists made rich from Spanish trade regulations were among the most prominent supporters of continued Spanish colonial rule, Argentines increasingly looked to independence as the only means of assuring complete free trade. In 1809 a memorial was drawn up protesting the state of the economy and requesting the resumption of free trade. This memorial was a direct catalyst of the initiation in May 1810 of the revolution against Spain."
    The Many Monopolies, by Charles W. Johnson, 24 Aug 2011
    Describes four ways in which markets are distorted by government interventions, explains Tucker's "Four Monopolies", examines five present-day monopolies and discusses Tucker's libertarian views
    "With the rise of multinational corporations and neoliberal trade agreements, tariffs have declined over the years. But the specific legal mechanism was less important to Tucker than the purpose of controlling trade to insulate domestic incumbents. In 1888 that meant the tariff. In 2011, it means a vast network of political controls used to manage the 'balance of trade': export subsidies, manipulation of exchange rates, and multigovernment agencies like the World Bank and IMF."
    The Reagan Record On Trade: Rhetoric Vs. Reality [PDF], by Sheldon Richman, Policy Analysis, 30 May 1988
    Analysis of Ronald Reagan's stance on free trade and protectionism, contrasting what he and those in his administration said with a lengthy list of actual quotas, tariffs and trade negotiation results
    "People tend to be implicit free traders and explicit protectionists. When they shop, they buy what best satisfies them in quality and price without regard to national origin or to their merchandise account with the seller. ... But when people talk about world trade, they become protectionists. ... A president truly committed to free trade would have exerted his influence to show why the implicit free traders are right and the explicit protectionists are wrong."
    Related Topic: Ronald W. Reagan
    The Ricardian Law of Association, by Ludwig von Mises, Human Action, 1949
    Chapter 8 "Human Society", section 4; discusses how all people benefit when they cooperate with each other and how the division of labor results in greater productivity
    "Ricardo's first aim in expounding this law was to refute an objection raised against freedom of international trade. The protectionist asks: What under free trade will be the fate of a country in which the conditions for any kind of production are less favorable than in all other countries? ... Each country turns toward those branches of production for which its conditions offer comparatively, although not absolutely, the most favorable opportunities."
    The Singular Henry George: Insights and Influence, by David S. D'Amato, 22 Oct 2014
    Discusses George's early life, the main arguments made in his writings and the influence and disagreements he had with contemporary and later radicals
    "As its title suggests, George's Protection or Free Trade compares the relative merits of two opposite positions on the exchange of goods between nations, offering a powerful argument in favor of economic freedom. ... He opposed all attempts to coercively stop or impede trade, policies he treated as contrary to moral law and insulting to labor. ... George also pointed out the knowledge problem inherent in protectionist policies, the incredible assumption that lawmakers — indeed anyone — could possess the 'minute knowledge of all trade and industry' necessary to craft a law that would even roughly align with protectionists' stated goals."
    Thomas Paine on Commerce, by Gary M. Galles, Mises Daily, 16 May 2003
    Selection of Thomas Paine quotes on trade, particularly between different nations and contrasted with war
    "The principle of free trade is simply that of the freedom to choose for yourself who you will associate with in productive ways, and how you will arrange those associations, without artificial government restrictions to limit those choices. That principle is an essential, inalienable part of having ownership of oneself."
    Related Topic: Thomas Paine
    Trade Restrictions Show Hypocrisy, by Sheldon Richman, 12 Sep 2003
    Discusses how U.S. and European tariffs and quotas harm farmers in the developing world
    "American consumers would love to buy low-priced clothing, shoes, and agricultural products from abroad. Producers in the developing world would love to sell them those things. But these exchanges never come to fruition. Why? Because the U.S. government forbids it. And why does it do that? Because domestic producers and farmers have the political pull. Thus, tariffs raise the price of low-cost foreign products so that they are less attractive to Americans than domestic alternatives. And import quotas suppress supply, forcing Americans to pay more for fewer goods."
    We Need Real Free Trade Now, by Sheldon Richman, 4 Feb 2004
    Responds to an article by Paul Craig Roberts and Sen. Charles Schumer arguing that free trade is no longer tenable due to outsourcing of jobs
    "Free trade often requires adjustment to new conditions. Perhaps this will be true of hitherto secure computer programmers and other knowledge workers, who may see their incomes fall. But keep in mind that, while nominal wages may fall, real wages may not. That's because free trade and the resulting increased productivity of labor and resources will translate into more and lower-priced goods and services."

    Books

    The Case for Free Trade and Open Immigration
        by Richard M. Ebeling (Editor), Jacob G. Hornberger (Editor), The Future of Freedom Foundation, 1995
    Collection of essays by Ebeling, Hornberger, Samuel Bostaph, Jim Bovard, W.M. Curtiss, Bettina Bien Greaves, William M. Law, Ludwig von Mises, Leonard Read, Lawrence W. Reed, Gregory F. Rehmke, Sheldon Richman and Ron K. Unz

    Videos


    Classics of Liberty, Ep. 5: Richard Cobden: On Free Trade, by Caleb Brown, 12 Sep 2015
    Short biographical introduction to Cobden followed by selections from his writings on free trade
    Related Topic: Richard Cobden
    Free Trade vs. Protectionism, by Donald J. Boudreaux, 31 Aug 2011
    Defines free trade and protectionism, the use of tariffs to implement the latter, and gives Hong Kong and the United States as examples of the benefits of free trade
    "Free trade is simply a policy of treating foreign goods and services no differently than domestic goods and services are treated. Free trade is a policy of allowing domestic consumers to buy from abroad just as freely as they can buy at home. Protectionism is a policy of discriminating against foreign goods and services, a policy of saying to domestic consumers, 'If you want to buy foreign-made goods and services, you have to jump through some extra large hurdles to buy those goods and services.' ... Free trade is not just a theory; it's been practiced."

    The introductory paragraph uses material from a Wikipedia article, which is released under the Creative Commons Attribution-Share-Alike License 3.0.