That Doha Feeling

Can Cancun Fulfill the Dream of Doha? asks the headline to a story about the World Trade Organization meetings getting underway in Mexico.

The short answer is probably not. For a longer take on free trade and the problems in achieving it, check out two recent review essays on the topic by Reason Contributing Editor Charles Oliver. They're here and here.

And stay tuned to Reason Online for dispatches from Science Correspondent Ronald Bailey, who will reporting live from Cancun this week.

Comments

[Anonymous]

Reporting from Cancun? How can I get that gig?

[Kevin Carson]

Soros’ comparison of contemporary globalization to the “nationalization” process a century ago is quite apt.

In both cases, it is a centralization of the economy imposed from above, by State subsidies and regulations. To borrow a Benthamism by way of Nock, “laissez-faire” is an impostor-term when used in reference to the nineteenth century.
The sorry history of the land-grant railroads, the tariff barriers behind which industry cartelized, the patents that promoted concentration: these don’t exhaust the account, by any means.

It’s a basic principle of economics that when the State underwrites the cost of something, more of it is used than otherwise. That applies in spades to all the political, financial and transportation infrastructure of so-called “free trade,” which has been organized from above and heavily subsidized by the State. The transaction costs of organizing these infrastructures from below, instead of having them imposed from the center, would have been much higher (the costs of buying airport and highway land from willing sellers instead of relying on imminent domain would be mind-boggling). And the ongoing costs of maintaining them do not fall primarily on those who profit from them. So “trade” is a much larger proportion of total economic output than it would be in a free market, and much less of total consumption is produced at home because the cost of transporting it halfway around the world is artificially cheap.

But costs cannot be destroyed; they can only be shifted. You may pay “low, low prices” at Wal-Mart, but you still pay for the State’s intervention elsewhere, as a taxpayer and laborer, and sometimes even as a consumer. TANSTAAFL.