Sunday, July 1, 2007

Leveling the playing field

"Today, there are certainly some people in rich countries who preach free trade to poor countries in order to capture larger shares of the latter's markets and to pre-empt the emergence of possible competitors. They are saying, "Do as we say, not as we did," and act as bad samaritans, taking advantage of others in trouble. But what is more worrying is that many of today's free traders do not realise that they are hurting the developing countries with their policies. History is written by the victors, and it is human nature to reinterpret the past from the point of view of the present. As a result, the rich countries have gradually, if often sub-consciously, rewritten their own histories to make them more consistent with how they see themselves today, rather than as they really were.

Global economic competition is a game of unequal players. It pits against each other countries that range from Switzerland to Swaziland. Consequently, it is only fair that we "tilt the playing field" in favour of the weaker countries. In practice, this means allowing them to protect and subsidise their producers more vigorously, and to put stricter regulations on foreign investment. These countries should also be allowed to protect IP rights less stringently, so that they can "borrow" ideas from richer countries. This will have the added benefit of making economic growth in poor countries more compatible with the need to fight global warming, as rich-country technologies tend to be far more energy-efficient.

there is a huge difference between saying that trade is essential for economic development and saying that free trade is best. It is this sleight of hand that free-trade economists have so effectively deployed against their opponents—if you are against free trade, they imply, you must be against trade itself, and so against economic progress."

Read this excellent essay in full, well worth it.

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