THE DISADVANTAGES OF NATIONAL TRADE BARRIERS AND RESTRICTIONS

In Japan, a shortage of raw materials, combined with a highly skilled work force and a large amount of capital, created an economy that currently produces and exports many automobiles and electronic goods, while importing comparatively little.  But this state of affairs has nothing to do with the fact that Japan is a separate nation, directed by its own individual government.  Nor should its status and existence as a separate sovereign nation-state be given the credit for Japan's having entertained a trade/payment surplus, or having become an economic competitor with a number of other nation-states, including the United States, during recent years.  That is to say, it is the underlying nature of the people and of the place--not the government or its politics--that created the economic conditions that have come to exist there.

Likewise, cheap exports from China, which have been blamed for having caused unemployment in a number of other countries, are again in no way related to the fact that China happens to be an independent nation-state.  They are instead a consequence of the fact that this region of the world happens to contain an exceedingly great number of people, who comprise a surplus of labor.  This oversuppoy of available workers, coupled with the fact that most of them are unable to escape to other places in order to seek more lucrative conditions, results in pitifully low wages, correspondingly low production costs, and resultant low prices.

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It is, of course, quite easy to realize that a world composed of a large group of nation-states constitutes an antithesis to free trade.  Where nation-states are involved, economic policies are frequently wasteful, inefficient, and fashioned mainly for the purpose of producing an illusion of control.  It is simple for such economic policies to readily become oriented toward the welfare of bureaucrats and special interests within a particular nation, often resulting in needless subsidy and protection.  Decisions favoring the general community, or logical from a global standpoint, are consequently seldom arrived at.  And the final results are tariffs, quotas, and export subsidies, that result in higher prices and more limited consumer choices for the people who live in the very nation wherein such policies are originated.

Even more painful is the effect that protectionism on the part of major industrial countries inflicts upon people in other, developing, parts of the world.  For example, in parts of Africa and Latin America, purchase of as humble, but necessary, an item as a bicycle may require several months' wages, due at least in part to exceedingly high import tariffs in place upon their components.

On the other hand, as if to pour salt into the wound, vested interests in some industrial countries may pretend to assist developing areas by convincing them to open their markets to said industrial nation's products--while continuing to keep their own markets protected via high tariffs.  Under this arrangement, the rich get richer, and the poor more impoverished.

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As long ago as the latter part of the eighteenth century, the rationalist theory of society emerged in Europe.  Recognizing institutions such as monarchy, the class system, and the established church to be merely results of force of habit and the self-interest of certain groups, thinkers concluded that in commerce, clear and simple business sense and accounting would provide a better way.  It was concluded that free trade and a single tax would be the best road that the ongoing expansion of the world of business should be made to follow.  It came to be realized that taxing successive  steps in the import, manufacture, and export of goods constituted an impediment to the natural flow of the world's products.  Such a system of export bounties and import duties, labeled the "mercantalist system," was condemned as an evil "born of the needs of war and the selfishness of merchant groups," and as comprising a hindrance to peace and wise government.  Moreover, it was simple to perceive that such encumbrances raised prices and diminished the purchasing power and prosperity of all.  However, not much was actually done about it.

Proceeding forward to the present day, the traditional nation-state has continued to be criticized as "unnatural," and even "impossible," as a business unit component or regulator within our twenty-first century global economy.  In today's global market, the hulk that is the nation-state seems to "merely get in the way."  Solutions to economic issues are said to flow naturally to beneficial conclusion without the intervention of nationsal governments; and their "traditional middleman function" is described as largely unnecessary.  In fact, undue attempts on the part of the governments of nations to demand from, or dictate to, the participants in today's global capital markets only induce diversion of the flow of capital to other places--resulting in unfavorable outcomes, such as an impairment of the national currency, and shortages of investment funds, within those countries. (Kenicki Ohmae, The End of the Nation-State)

Most economists agree that free trade is superior to any and all forms of trade restriction or protection; and that if protectionism were abandoned or reversed, benefit to all the world would ensue.  In fact, the foregoing is described as one of the few tenets that virtually all economists agree on.

In a single united world, we would hear no terms such as "production surpluses" or "trade deficits" among nations.  For there would be no nations--only regions of our world, which would produce or manufacture more, or less, than other regions. This would precipitate no specific economic effect upon the residents of that, or any other, particular area.  Instead, an "averaged" effect would ensue, regarding the totality of a single world economy.  Negative effects, if any, would be milder when considered within the context of the entire world; and be more easily remedied or corrected, if worldwide conditions and resources were applied to their relief.

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