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Traders of the Lost Ark Rediscovering a Moral and Economic Case for Free Trade

August 15, 2018

This paper, written by Competitive Enterprise Institute (CEI) senior fellow Iain Murray and CEI regulatory studies fellow Ryan Young, examines the issue of international trade and recommends how policymakers can promote economic freedom and prosperity.

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This paper, written by Competitive Enterprise Institute (CEI) senior fellow Iain Murray and CEI regulatory studies fellow Ryan Young, examines the issue of international trade and recommends how policymakers can promote economic freedom and prosperity.

Economists overwhelmingly and consistently support free trade but policymakers and everyday people are less willing to get the government out of the way of other people’s decisions, Murray and Young write.

“The basic principles of a free society are timeless, but they need to be relearned every generation,” Murray and Young wrote. “One of those principles is the freedom for people to trade freely with one another—both within nations and across borders. The case in favor of free trade has been uncontroversial among economists since the time of Adam Smith, but support among policymakers and the public has ebbed and flowed with the political winds. Now, with the Trump administration raising tariffs and other trade barriers against Canada, Mexico, the European Union, and China, the ongoing liberalization process that began in the aftermath of World War II is experiencing the greatest threat it has yet faced.”

Policymakers should reduce the government’s interference in the free market, Murray and Young write.

“Ideally, trade policy would recognize that these demonstrable gains from trade are enough to justify unilateral free trade,” Murray and Young wrote. “As long as opposition remains strong, however, a next best trade policy would seek to defend and preserve the low-tariff system the world has been building since the Second World War and avoid loading trade deals with extraneous side agreements. Instead, trade policy should be developed and carried out based on the principle of mutual recognition. … While the economic benefits from free trade are important to recognize, at heart trade is a moral issue. Should people be free to interact with other people on mutually agreeable terms or not? We believe they are, as a matter of human dignity.”

Article Tags
Economy
Sub-topic
Economy: Trade
Author
Iain Murray is a director of projects and analysis and senior fellow in energy, science and technology at the Competitive Enterprise Institute (CEI).
imurray@cei.org

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