Throughout our political discourse, we continue to hear critiques of free trade from left and right, each of them ultimately aiming to prod us closer to an abstract notion of so-called “fair” or “fairer” trade. Even when the value of free trade is recognized, such admissions tend to be quickly accompanied by fuzzy, convoluted qualifiers, such as “free trade must also be fair.”
It’s a refrain that sounds agreeable enough on the surface, yet it bears an underlying ambivalence toward freedom and expresses little confidence in the fairness of such freedom, hinting at a moral dissonance between “free” and “fair” that doesn’t actually exist.
Indeed, trade that is truly free is also truly fair.
“Free trade simply means unimpeded exchanges between individuals over political borders,” writes Pierre Lemieux, an economist at the University of Québec in Outaouais. “It is the international (or interregional) equivalent of domestic free markets. In free trade, any individual or private entity can make deals, as opposed to the government’s making one deal for everybody (which will be good for some and bad for others).”
In a new primer, Lemieux seeks to address 7 key objections to free trade, most of which deal with the basic economics, showing how, contrary to the popular arguments, free trade is a positive force for job creation and growth in the national economy as a whole.
He concludes, however, by addressing those more basic objections about “fairness,” which Lemieux believes are, more often than not, “moral excuses” or narrow “material interests masquerading as ethics.” As Lemieux goes on to argue, we must first stop “defining freedom in terms of fairness,” and instead “define fairness in terms of liberty.”
“Trade is fair if it is entered into voluntarily by two private parties,” he writes. “As philosopher Robert Nozick argued, socialism needs to ‘forbid capitalist acts between consenting adults.’ Free trade is made of capitalist acts between consenting adults,” and “except for extreme cases, one can argue for the presumption that fairness is liberty and that free trade is fair by definition.”
Once we understand the fairness of trade itself, we move to the individual parties involved, recognizing that “every human being should be treated equally in a formal sense.” As Lemieux explains:
Protectionism can be in the interest of most people in a large country if—and only if—their government is able to change the terms of trade in their favor. As mentioned previously, this is the only serious argument against free trade—that a large country can manipulate the terms of trade in its favor with optimal tariffs. Even in that case, protectionism remains morally unacceptable in light of the usual methodology of economics and the foundations of a free society. It should be taken for granted, as proposed by the individualist methodology of economics, that all human beings have the same moral weight—whether they are nationals or foreigners, wherever they happen to have been born.
Whatever the temporary or targeted merits of a particular protectionist policy for a particular industry in a particular country, we must continue to ask ourselves: What about the particular people who happen to live outside those particular borders? Are they being treated “fairly” by protectionist and restrictionist policies?
Given how muddled our vocabulary and trade policy has become, it’s understandable that the ethics and economics would continue to get lost in the debate. So-called “fair trade” products are far too often haphazard manipulations of the market, even as our so-called “free trade agreements” are far too often not so free.
But though we may indeed live in a complex world that will continue to be filled with middle-of-the-road compromises and hazardous variations of managed trade, we’d still do well to nudge our needles in the right direction as to what is truly free, and in turn, what is truly fair.
“Free trade is fair trade,” Lemieux concludes. “The fair trade argument is usually an excuse for special interests or for state power. What is fair is to let each individual or private entity reach his or its own bargains. Even if domestic protectionism can favor some people in their own countries at the cost of harming foreigners, and especially poorer foreigners, it does not seem morally acceptable to do so.”