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The Problem with Free Trade

An arguable thesis is that free trade makes us worse off economically despite it's proclaimed long and short term benefits!

Fact is that no existing school of economists would voluntarily give a PhD for such a thesis ecen though it shines as a sensible alternative to less pragmatic economic treatises. If all economic dissertations were forced to contain practicality we would all be better off, in my view.

Economics theory not history is bunk on the question of theorized benefits from free trade which invariably accrue more abundantly to monopolizing initiatives over the longer term. This in time leads to political change unfavourable to democratic institutions. Examples in history abound as in the rise of many large multinational firms, financial and banking institutions that restrain trade by their corporate practices.

Contravailing policies are always needed to weaken the negative effects of monoplization, but the attempts to curb the negative impacts of monopolization are weakest in regimes of free trade.

There is an economic law that free trade leads to lower total employment in the long run and to maldistribution of the returns to trade in favour of countries and companies seeking to reduce competition and replace whatever competition exists with near monoplies or forms of monopolistic competition.

In the absence of competition we get forms of management of society and its institutions that resemble dictatorships. This changes political institutions towards greater and greater control and eventually fascism where big financial interests dominate.

Free trade concepts are like like perfect competition concepts are hangovesr of failed economic concepts that bear little resemblance with reality.

What goes as free trade is invariably a progress towards monopoly. The problems of free trade are that they do not create competition as text books might profess. On the contrary forms of free trade because of technologies of scale always leads to a reduction of competition a slowing down of growth and employment in total and progress towards monopolies and unfair distributions of incomes.

Instead of free trade one needs balanced trade and investment in which both trading partners as communities voluntarily manage their scale of operation to limits within which real competition of quality survives and dominates. This is hardly the monolithic Monsanto world.