The Trouble with Trade

Abstract: Free trade for many constitutes the ultimate in libertarian thinking. However, this article suggests to go one step further, arguing that free trade is to some extent a myth, as the practice of trade incorporates many values that do not rhyme with optionality. Free trade often calls for restrictive legislation, e.g. on copyright. Trade goes hand in hand with the concept of ownership, of legally enforceable contracts and of luring people into agreeing to what they don't want to do. The article warns that a continued focus on free trade and on free trade pacts and treaties may well set the stage for a unified World Government. The article concludes that trade fits into the what DonParagon refers to as the Era of Government that is now coming to an end. A related article is DonParagon's Vision of the Future.



A. Trade and Dictatorship

Trade is often defined in terms of mutual exchange of goods and services. From most perspectives, trade is preferable to the violence of a dictator who takes things by force; trade assumes that parties agree to exchange what they are trading. Trade is often regarded as beneficial for those who participate in trade, i.e. the parties that trade things are each better off, as they each end up with something they like more than what they gave in exchange.

But how much is everyone in agreement? In any deal between two parties, one of the parties may get second thoughts and renege; or an outside party may protest, claiming to be unfairly disadvantaged by the deal.

Many therefore believe that trade should take place within a legal framework. Protection of the environment and of people deemed to be disadvantaged by unscrupulous traders is often put forward as an argument that justifies regulation of trade.

The point is that if trade apparently invokes the rule of the law, with all its dictatorial might, then it is hard to accept that trade is the exact opposite of dictatorship.

Apart from this, trade has many intrinsic dictatorial aspects. One of them is that trade goes hand in hand with the concept of ownership. A trade constitutes a transfer of ownership. Such a transfer is a binding contract; parties may negotiate for a long time, but at some stage the deal will be concluded and the trade will take place, i.e. the goods and services will change hands and from then on parties are expected to abide by it. The conclusion of the negotiated deal may take place symbolically, e.g. with a shake of hands or signing of documents. If one party gets second thoughts about the deal, the other party(ies) can then legally enforce the deal as a binding agreement, even if it is clear that parties no longer agree. As such, trade fits into a dictatorial world that is ruled by the law, courts and judges.

This means that trade incorporates some outright dictatorial values. The practice of trade dictates that parties abide by what has been agreed upon at a single moment in time. If any of the participants in the deal has second thoughts, the court will stick to the contract, even if terms do not make sense in hindsight. The court enforces that single moment at which parties sign the contract as the one and only true expression of all the deal is about. This singularity and its dictatorial enforcement make that trade has an inevitable built-in element of dictatorship.

Trade also is not that far away from coercion, as it is a compromise for all parties involved. The negotiations taking place before that the deal is concluded look very much like pushing parties to do what they would not do by themselves.

Things are only handed over in exchange for other things, not out of generosity or for ideological or other reasons. The deal requires all or at least some parties to do something that they wouldn't otherwise do. This again rneans that trade cannot be regarded as the opposite of dictatorship.

B. Trade part of a Culture

Most people find it difficult to understand this. They cannot reconcile the fact that on the one hand trade has some dictatorial aspects with their preference on the other hand for the so seemingly peaceful practice of trade that compares so well with the violence and coercion that has been such a prominent feature of the distant past and often also of the not-so-distant past.

DonParagon has put all this in perspective. For DonParagon, trade is not the opposite of dictatorship, but rather an intermediate phase in the shift from a past world ruled by force towards a future time when people will be able to freely participate in many activities, initiatives, events and movements on the basis of voluntary argreement and because they fully want to do so. In Don's Vision of the Future, trade is part of the current Era of Government which encompasses cultures that emerged when people first started to settle down and became prone to territorial ideologies (see appendix).

In today's world, all the cultural values asssociated with the Era of Government are rapidly becoming obsolete. Success in business is more and more determined by intangibles such as creative inspiration, goodwill, advertising, contacts and system of management. Whoever owns, say, the building from where business is being conducted, becomes increasingly irrelevant.

C. The Free Trade Myth

Many people advocate free trade and at the same time call for stricter regulation, e.g. on copyright. Why does free trade not focus on the law itself, on the rule of Parliament, the court system, judges, military force and other coercive forces in society? Why free up trade, if it is clear that such 'free trade' appears to require a coercive regulatory framework? As discussed, trade is not exactly the ultimate in freedom and if freedom is the aim of the exercise, why then not focus directly on more dictatorial aspects of our current society, e.g. on police and military forces, jails, etc?

There are many trends that make trade increasingly a global matter. Globalization of trade accelerates as easier ways are developed to ship goods from one continent to another, as people can travel faster, as marketing, ordering and other administration associated with trade become computerized, as computer technology allows for encryption and for sophisticated ways of communication and as deregulation of telecommunications makes such communication ever cheaper. As Don Paragon argues, all this makes it increasingly difficult for the Government of any given country to present its laws as the one and only rightful way to go. If the Government of one country forbids its residents to obtain certain information, they will simply obtain that information from another country where it is more freely available. This is an inevitable development that, according to Don, will shake the foundations of the Government as an institution that derives its power from its control over a specific territory. The 'Mobile Revolution' as Don calls it, is about to upset the Government as an institution that rules society, to the extent that the Government will soon become virtually irrelevant.

D. Beware of 'Trade Pacts'

The current answer of the Government is to negotiate 'trade pacts' with other countries, in order to 'harmonize' legislation. The Government hopes that if legislation is the same between countries, the rule of government can be preserved. Many advocates of 'free trade' do not seem to realise that they are not so much freeing up trade, but are helping to establish a single 'world government'. Such 'Free Trade Agreements' are nothing but centralization of legislation between countries and they have little to do with freedom, except that they at least accept the inevitable developments more than the protectionists who rather stick their heads in the sand. Instead of free markets, let's focus on optionality!


Appendix: DonParagon's Vision of the Future

In DonParagon's Vision of the Future, the practice of trade started back in history when people settled down and claimed to own specific territory. It started with bartering, e.g. trade in cattle, the produce of the land, buildings and other things were traded by handing them over simultaneously. Possession was ownership.

Gradually, money became popular. As services became an increasingly important activity for the economy, what was to be exchanged in the trade was no longer handed over all at one specific time. Contracts became popular to preserve that single moment at which the deal was supposed to take place; in that sense, contracts are merely an effort to preserve values of the past, i.e. values that come with ownership of property. Trade is part of an era dominated by the concept of government, as it evolved from the first claims of ownership of land and physical goods. Trade is merely the transfer of ownership; contracts, money and financial transactions are in turn instruments that facilitate such trade.

This 'Era of Government' is now coming to an end and instead of trade, appreciation is becoming the key to success. People will increasingly participate in all kinds of movements and initiatives, not as a trade or for ulterior purposes, but because they want to. Things will happen as and when people want it, not because money dictates it.




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