Thursday, March 06, 2008


Tibor R. Machan

Both Democratic contenders are NAFTA foes. And their complaints aren’t the valid ones, of which there are plenty--NAFTA is to free trade what mild arthritis is to good health. But NAFTA is a step in the right direction, which is to open all the borders and remove all tariffs and duties and other impediments to the free flow of commerce around the world.

So what’s the fuss all about? Mobility and foresight, that’s what. A free market requires some measure of willingness to move and to do this in several respects and one must also prepare oneself to move from profession to profession, job to job, vocation to vocation, place to place, etc., even when this is only a precaution. That is because a free purchasing public can choose different products and services, from one purchase to the next (although often people do remain loyal to some vendors, such as insurance providers, grocery stores, canned chicken soup producers, and so forth). But no one is required to stay with the same store, be it a barbershop, car dealer, spa, or drug store. The free market makes possible the greatest degree of freedom of association. Even in a less than free market this is mostly the case, especially for employees who are at liberty to change jobs if a better one comes their way. (Employers are now severely restricted in our mixed economy regarding whom they may divorce in the work force! This fact is a severe block to economic health in Europe and elsewhere.)

A free market, of course, does not guarantee job security--nothing can do that apart from a gun held to one that coerces one work (as in a labor camp) and that only for a little while. But because a free market constantly generates jobs--it promotes economic development which translates to more and better jobs--no jobs are lost; people do need to be flexible, adaptable, willing to change, just as they do when they act as customers in that same market place.

What the two Democratic candidates capitalize on is that a great many people want to have it both ways--they want their jobs to remain in place even while they go shopping and change their preferences all the time and thus cause job mobility. Change and permanence--most people want them both but at different locations in the market place. As buyers, change is what most people choose; as employees and even employers, they want permanence (except when innovations make things easier).

In Ohio, for just one example, there needs to be adjustments made to how people earn a living because other people, abroad, are now offering services and goods that compete with what Ohioans have been producing. This, of course, has also freed many people to create jobs in other parts of the economy because of their use of the moneys they saved through buying services and produces at lower prices than before. Even when they buy from producers abroad, they make jobs here because (a) those producers abroad buy and invest in the U. S. A. and (b) Americans spend savings on new products and services which are made in their own country.

Once again the ruse comes from what that genius 19th century French economists, Claude Frédéric Bastiat observed, namely that the market is teaming with both, what is seen and what is not seen. People tend mainly to react to what is seen and forget about the unseen, including when it comes to the impact of free trade and of the best elements of NAFTA.

And, of course, virtually all politicians, those interested mostly in obtaining power over other people, will capitalize on this fact. Instead of educating the citizens about the true nature of a free market, they take advantage of the misunderstanding about the free market that still pervades our culture, given how dismal economic education tends to be for nearly all high school and even college students.

Most members of the media aren’t helping either, since what they like to focus upon is people’s complaints, not on conveying the facts of economics. But, as the man said, the price of liberty is eternal vigilance!