Acton Institute Powerblog

How free trade fosters a creative, collaborative world

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trade-flow-international2In their defenses of free trade, advocates routinely focus only on the long-term, economic benefits, and understandably so. The overall expansion of trade in recent years has led to greater economic growth, innovation, and prosperity for all, including America.

Protectionist policies may offer immediate relief and security, including a host of short-term political and economic solutions and benefits for particular industries or corporations. But on the whole and in the long run, politically directed tariffs and taxes are more likely to spur crony capitalism, harm consumers, cramp innovation, and delay the necessary re-tooling to remain a strong and dynamic nation in a globalized world.

Given our newfound national appetite for protectionist policies, free market advocates have plenty of work to do in better communicating those concerns, as Samuel Gregg recently pointed out. Yet in addition to more carefully making the economic arguments, we should also be mindful that free trade presents an opportunity for something else: namely, the expansion of creative collaboration and connection.

Part of that lesson was famously illustrated in “I, Pencil,” the popular essay by Leonard Read which urges us to have “a practical faith” in the economic and material good that might happen if we simply “leave all creative energies uninhibited.” Yet even here, readers tend to focus too heavily on the material ends and outcomes, rather than reflecting on the social, cultural, and spiritual benefits of the exchanges themselves.

For example, what might we see, at a deeper level, when we observe the following visualization of the global market in 2015?

Some will see the miracle of the marketplace, and the efficiency, value creation, and range of opportunities that it represents. Others will see $15.6 trillion in imported goods (each dot represents $1 billion in value, meaning there’s more at work than what we can see). Others will look to the more “silent” corners that aren’t so well connected, yearning for an even greater expansion of those circles of social and economic exchange. Others will notice those areas that are well connected, but where local communities and workers are suffering and struggling to adapt to the relevant disruptions.

These are all things we must see, and each serves as a significant input to our personal, cultural, and political responses. But as we stretch our economic imaginations, we mustn’t forget that even as we’re mindful of the material progress and the real imperfections and genuine human struggles that lie beneath, this is also a striking picture of harmony and creative collaboration in a diverse and disparate world.

In addition to threats that protectionism poses to authentic economic growth and prosperity, it also seeks to inhibit or prohibit our ability to expand these networks and relationships, and in turn, the beauty of the collaboration itself. America will benefit by forming those partnerships and cultivating those relationships, and not just economically. There is power and value and generosity in our trading and exchanging, and its fruits extend before and beyond the material stuff.

For Christians, this picture of collaboration and partnership ties closely with the view that work is fundamentally service to others and thus to God. “Work restores the broken family of humankind,” writes Lester DeKoster. “As seed multiplies into a harvest under the wings of the Holy Spirit, so work multiplies into a civilization under the intricate hand of the same Spirit.”

As we offer those gifts up to our communities, countrymen, and the global world, and as we expand the channels for doing so, we should be honest and realistic about the economic disruption it is bound to involve, as well as the other risks and pitfalls that will come along the way. But on the whole, we can move forward with hope and service and contribution, adapting our work to the needs of the world around us, and uniting with others to cultivate new pathways, ideas, and partnerships for creative exchange and prosperity.

We are closer to our global neighbors than ever before, and that is a good and beautiful and promising thing if we respond accordingly, reorienting our hands and our hearts toward an abundance that connects and collaborates, serves and sustains.

“The day we went to work we locked hands with humankind in weaving the texture of civilized life,” writes DeKoster, “and our lives each found the key to meaning.”

Work: The Meaning of Your Life

Work: The Meaning of Your Life

Where do we find the core of life's meaning?  Right on the job!  At whatever work we do -- with head or hand, from kitchen to executive suite, from your house to the White House. New Foreword by Stephen J. Grabill and Afterword by Greg Forster

Joseph Sunde is an associate editor and writer for the Acton Institute. His work has appeared in venues such as The Federalist, First Things, The City, The Christian Post, The Stream, Charisma News, Juicy Ecumenism, Ethika Politika, Made to Flourish, and the Center for Faith and Work. Joseph resides in Minneapolis, Minnesota with his wife and four children.

Comments

  • n6532l

    The Achilles heel of your argument is that it is antithetical to the real world experience of the United States. From shortly after the War of 1812 until the Kennedy Round of tariff reductions in 1967 the United States was the most tariff protected nation on earth. During that time we prospered suffering none of the “Boogie Mand is going to get you” harm you ascribe to tariff protection. We did not suffer a lack of innovation. Consumers, workers, and business prospered. Free trade on the other hand has been harmful to most of us, hence, Brexit and Trump. If you can do it your are not bragging. Free traders have proven to be braggadocious advocates of an Ivory Tower theory that has never worked in the real world. Pull your head out of the sand and take a look at the real world. Free trade has failed.

    • Your argument suffers from the post hoc fallacy. Besides, the free trade principle carries the caveat of all economic principles, ceteris paribus. In other words, the US may have thrived in spite of protection.

      The level of protection until the 1930s was extraordinarily small compared to today, so it would not have had as much effect even if the US had the most protection. Besides, the “protection” until the 1930s was mainly for revenue. It was the only income source for the federal gov.

      • n6532l

        Not true. Tariffs were for revenues until about 1816. The largest tariff we ever had was The Tariff of 1828. Every Republican presidential candidate from Abraham Lincoln in 1860 until Alf Landon in 1936 ran on a platform of tariff protection. All who won delivered. From the end of the Civil War until 1900 tariffs seldom went below 40 percent and occasionally went above 50 percent always staying well above Trump’s 35 percent. After 1900 tariffs were lowered as a response to monopolies but were resumed in the 1920s. In the 1920s as tariffs went up employment went up. Except for the period from 1930 to 1932, roughly 1 percent of the time we have been a nation, as tariffs increased employment went up or stayed level. Google Tariff of 1828, Morrill and War tariffs, McKinley Tariff, Fordney-McCumber.

        The normal world wide historical experience with free trade is the citizens of the wealthiest nation involved get hosed. After a hundred years of suffering free trade the citizens of Great Britain voted for socialism. We went Trump. No nation ever became wealthy except with trade protection.

        We have more free trade now than we have ever had. Where is the prosperity? The growing economy? NAFTA was going to give us high paying jobs instead we got Perot’s giant sucking sound and H-1Bs. NAFTA was going to end illegal immigration from Mexico instead it increased.

        Free trade has enriched corporate America otherwise all I see is an Ivory Tower theory surrounded by a bodyguard of lies ignoring the real world experience with free trade.

        • Well if you look at the chart on Wikipedia at https://en.wikipedia.org/wiki/Tariffs_in_United_States_history, The largest average tariff was 45% in 1870. Before and after is was usually under 15%. And yes, it was primarily for federal revenue, as the article says. There have always been people who advocated tariffs because most people are terrible economists.

          But what you have to ask is did the economy grow because of the tariffs or in spite of them? All good economists since Adam Smith have shown that tariffs help certain industries but hinder the whole economy. So you can believe what you want, but the best in the field of economics have always opposed tariffs.

          The stagnation since 2000 has resulted from increased socialism, not tariff reductions.

          • n6532l

            See chapter 7 America’s Experence with Tariffs of Dr. Ravi Batra’s “The Myth of Free Trade the pooring of America.” Page 134 has better graph.

            Among the ecomists who disagrees is John Maynard Keynes who when we passed Smoot-Hayley tariffs advocated Great Britain do the same thing which they did.

            Did the economy grow because of tariffs or inspit of them? Well, the only time when increased tariffs did not correlate with a steady or rising economy was 1930-1932 roughly 1 percent of the time we have been a nation. Consider the gains in the economy after the Tariff of 1828. In the real world tariffs have correlated with a good economy and free trad has lead us to where we are today. Under high tariffs we overtook free trade Great Britain as the most advanced economy in the world. After about a hundred years of the harm done to them by free trade the British went socialist. China, which had free trade forced on them after the Opium Wars, went communist.

          • The problem is that you can’t prove the point with just historical data. In order to do that, nothing but tariffs would have to change and that has never been the case. There are no controlled experiments in economic history.

            But the main problem is that trade has always been a small part of the economy. It’s currently about 20% of GDP and that is about the largest it has ever been. For much of the 20th century is was 10% or less. So relatively small changes in tariffs aren’t going to have much impact on the economy.

            A few economists think trade is highly overrated, helping and hurting very little.

          • n6532l

            Ok apply the same standard of proof to the proposition that fee trade is good. Your argument is free trade is good and since i can not prove otherwise Ishould accept it. The game the real world forces us to play is what the academics call decision making under conditions of uncertainty.

            If free trade is good where is the prosperity promised?

          • “Your argument is free trade is good and since i can not prove otherwise Ishould accept it. ”

            No, that is not my argument. You clearly didn’t understand my post.

            “If free trade is good where is the prosperity promised?”

            As I wrote above, other things can overwhelm the benefits of trade. International trade is such a small part of our economy that it is easily overwhelmed. In the same way the devastation of protectionism is actually pretty small, making it easy for other sectors of the economy to thrive in spite of it. Investment, taxation and regulations have a far greater impact on the economy than does trade with other nations. Vastly increased socialism in the past generation has overwhelmed any benefit that freer trade might offer.