Wednesday, July 05, 2006

Political Dogma and Trade

Let the state dissolve

The latest trade talks (the Doha round) are in trouble because of a longstanding stalemate: Poor countries won’t open their borders enough to rich nations’ manufactored goods and rich nations won’t open their borders enough to poor country agricultural products. This has been going on for longer than I can remember.

When elephants fight it is the ants that get crushed (or something like that). It’s been proven since David Ricardo’s Principles of Political Economy and Taxation book of 1817 that trade creates wealth for the traders (and that means cheaper goods for everyone, and poor people most of all need cheaper foodstuffs clothing transportation and communications). You would think that governments would have gotten it right by now. Poverty is alleviated not by taxing the rich and making them poorer, and everyone else along with them, but by making the poor richer through trade.

Politicians are usually the rich in both poor and rich countries, so who is truly looking out for the poor? Societies in general would gain if free trade would be allowed to flourish, but this would then take away the power of politicians, from which political donations flow, thus the dogma.