From: CN
Sent: Friday, October 21, 2016 12:47 PM
To: wblock@loyno.edu
Subject: Free trade bubbles
Hi: Having read LRC (mostly) and Mises.org for a few years now, I can only recall seeing arguments in favour of free trade. But recently I’ve read a lot more at Vox Popoli, and enjoyed Vox’s debate with Bob Murphy on free trade. I’m interested in your position on free trade between countries, given that there are states, i.e. not an idealised libertarian society. In particular, I believe trade between a freer country (US, for example) and a heavily subsidised country (China, for example), would lead to a bubble in the subsidised economy and a depression in the freer economy. This suggests to me that free trade could be acceptable between economies of roughly equal freedom, but where there is a disparity in economic freedom then one society will benefit at the expense of another (and when the bubble bursts, both will suffer). Thanks in advance. Regards CN
Dear CN: In a debate on any subject in which Bob Murphy takes place, I’d bet on him being the winner. This certainly applies to any debate he might enter on free trade. Poor Vox Popoli, whoever he is. Trade necessarily makes both parties better off ex ante, and almost always also ex post. This holds true for individuals in the same store, the same city, the same state, the same country (one of the reasons the US is so wealthy despite government intervention is that we have a gigantic free trade zone). This applies, too, even if one party to the trade is an American, and the other is a Chinese person. I suggest you read Hazlitt’s Economics in One Lesson on this matter.
2:48 pm on October 22, 2016 Email Walter E. Block
