Irish philosopher Edmund Burke once shared how “free trade is not based on utility but on justice”, so is this still the case, or has it changed over the years? In the 1930’s, countries competed against one another to raise trade barriers, which then created disputes. Left to themselves, disputes will continue to grow and end up to become conflicts, which could potentially lead to war. As a result, the first international organization known to prevent such catastrophe was called the General Agreement on Tariffs and Trades (GATT), which was formed in 1948 and signed by 23 countries to facilitate International trade. In 1995, GATT was replaced by another international organization now known as the World Trade Organization (WTO), which is based in Geneva and whose purpose is to “policy free trade agreements, settle trade disputes between government and organizes trade negotiations”. Today, the WTO is the only international organization that oversees the international rules of trade. It aims to have zero trade barriers, which allows countries to trade freely. Despite this, the WTO still has over 30,000 regulations that go against free trade. The question arises whether the WTO truly enforces justice and serve its purpose of effectively reducing tariffs equally for all countries, as well as abide by healthy and fair and regulations that prevent conflict and biasness, or does the WTO still base trade on the utility of developed countries/parties?
New technology and the advent of mass production had so radically altered U.S. culture that capitalism and consumer markets came to been seen as synonymous with progress and civilization (Lears 202). The rise of industry resulted in rapid urbanization and an influx of immigrants seeking work opportunities in the burgeoning U.S. economy. Westward expansion on the continent was thus seen as imperative to provide cheap land for a growing population and room for the abundance of workers in the late 19th century (88). When the frontier was officially closed in 1890, American expansionists turned their attention to the establishment of foreign colonies and the creation of new markets to balance-out industrial overproduction (200, 201). Historian Jackson Lears writes that American capitalists sought “free access to foreign markets, raw materials and investment opportunities” (201). Such access gained legal justification through the 1904 Roosevelt Corollary to the Munroe Doctrine, which claimed U.S. interventionist rights in any nation deemed “unstable,” in est, resis...
The economic concept of protectionism dates back to Adam Smith’s idea of comparative and absolute advantage. The country with the ability to produce the same amount of a good or service with fewer resources than another country has the absolute advantage. However, if the other country has a lower opportunity cost of producing that same good or service, they have the comparative advantage. Smith argued that “If a foreign country can supply us with a commodity cheaper than we ourselves can make it, better buy it of them with some part of the produce of our own industry employed in a way in which we have some advantage” (Smith, 1904, IV.2.12).
According to them, the idea of free trade was the foundation for the expansion of influence into foreign areas like Asia and Africa. In essence, informal empires acted as the basis for nineteenth century European Imperialism. Not only did it remind powerful colonizers of the power of economic manipulation, but it instilled a greed within the minds of colonizers that motivated them to seek out more land and resources. The colonizer mindset that was so prevalent in the era of Cortes and Columbus maintained its influence in the 1800s, as well, leading to the formal empirical rule that shaped the modern era. Robinson and Gallagher’s theory holds much significance as it directly affects how territories are divided amongst countries and how government systems are built around the
On January 1, 1994, the North American Free Trade Agreement (NAFTA), the free trade policy linking the economies of Canada, the United States, and Mexico was officially implemented. Over the past decade, the policy has evoked a firestorm of debate involving neoliberal advocates, mercantilist critics, and radical critics, all of whom analyze and critique NAFTA in an effort to determine the success of free trade. Since NAFTA policies are evaluated by political economists with differing ideologies, the success of NAFTA’s first decade remains in question. After a decade, which economists herald NAFTA as a success and who disregards it as a failure? Which set of economic and political standards should be used to evaluate free trade? And ultimately, what policies should be implemeted in NAFTA’s second decade?
On October 4, 1988, Canada and the United States signed the Canada–United States Free Trade Agreement (FTA). The agreement phased out most tariffs and trade barriers between Canada and the United States over a 10 year period. Aditionally, it exporting reduced regulations, prohibited export taxes on energy, extended national treatment for US business operating in Canada and vice-versa, and created dispute settlement panels. The deal helped remove trade out of the growing protectionism among both US and Canadian politicians, while protecting Canadian “cultural, regional development and farm marketing boards.”
Roughly fifteen year ago the United States entered into an agreement with its neighboring countries Canada and Mexico. With the incarnation of this intercontinental free trade agreement; the United States acting as the conduit would not only increase trade productivity for itself but, allot its sister nations to the north and south the same advantages. The North American Free Trade Agreement (NAFTA) is beneficial to America because, it encourages the expansion of job opportunities, abolishes taxes and tariffs that can restrict the flow of imports and exports, and supplies the States with goods and services at lower costs causing profits to increase exponentially.
Many times in life, people get put into situations in which they have to make some kind of solution to a problem that they are faced with. One example of this is when I was faced with the choice to either call the police or not when I spotted shoplifting in Washington D.C. just the other day. I was just standing there, when I noticed two women scooping stuff into their giant purses and then they ran out of a store. I was in so much shock that I couldn’t say anything; although after the incident happened, I had the choice of either calling the police or not. In relation, there are two texts in this section that deal with people that have to make a choice on making a solution to a problem. In the text, Shooting an Elephant, by George Orwell, the speaker is faced with the decision to shoot and kill a rampaging elephant. In the text, No Witchcraft for Sale, by Doris Lessing, the character Gideon is faced with the decision on whether to give the white scientists his medicinal theories that saved a boy from going blind. In both of the texts, Shooting an Elephant, and No Witchcraft for Sale, the solutions are either good or bad.
Pickert, Kate. “What Choice?.” Time 181.1 (2013): 40. MAS Ultra – School Edition. Web. 5
Economists Leighton and Lopez were both students of James M. Buchanan, a pioneer of the public choice framework in economics. Buchanan succinctly described public choice in his essay Politics without Romance as “the economic theory of politics” or “the theory of government failure” as a response “to the theory of market failure” (Buchanan 45). When Buchanan uses the term economic theory, he is referring to the positive analysis of individuals interacting in markets. The center of economic analysis is exchange between individuals. This form of analysis is typically utilized to study producers and consumers, firms and industries, individuals and societies. Public choice extends this framework to how individuals act in political cont...
Paul Krugman’s article “Is free trade passé?” (1987) espouses the argument that free trade economic theory today is “more in doubt than at any time since the 1817 publication of Ricardo’s Principles of Political Economy” (p. 131, citing Ricardo, 1821). Ricardo was the first to put forth the theory that “[t]he value of a commodity, or the quantity of any other commodity for which it will exchange, depends on the relative quantity of labour which is necessary for its production, and not on the greater or less compensation which is paid for that labour” (Ricardo, 1821, p. 1.1). It was his theory that specialization, even to the point of eliminating certain industries in a country, optimized a country’s trade advantage (p. 31.17). As Krugman points out, governments’ strategic trade policy intervention in free trade, through import restrictions or quotas, export subsidies, tariffs, and other trade interventions, have substantively moved international markets away from free trade. As the course module emphasizes, “The Ricardian model of trade…is of limited application to the complexities and realities of modern trade because it provides no insight into the sources of comparative advantage” (Colorado State University-Global Campus, 2014, p. 2). Krugman argues that although free trade may not be passé, the theory has become the reasonable rule of thumb rather than the optimum result, as it is not always the right policy.
Economics becomes a large factor in the American imperialism; but more specifically that expansion in foreign markets is a vital part in the growth of America. As historian Charles Beard puts it, “[it] is indispensable to the prosperity of American business. Modern diplomacy is commercial. Its chief concern is with the promotion of economic interests abroad” (Kinzer 81). Williams provides that the people of United States wanted this change to culminate in the business. “A great many farm businessmen were in trouble, and if they voted together they could control national policy. There was, in truth, a crisis before the Cri...
Having no qualms of making enemies, Hobson points the blame directly at those imperialists’ businessmen whom, both at home and abroad exploit the situation at the expense of the average man. “Imperialism, as we see, implies the use of machinery of government by private interests, mainly capitalists, to secure for them economic gains outside their country.”
Free Trade is a beneficial idea if all parties involved, that is, the workers, the state, and the private sector, could be represented equally and justly. Until all three ingredients are given the same chances, each perspective will allow for different advantages and disadvantages. By examining the liberal, nationalistic, and Marxist perspectives individually and in contrast with one another, free trade can be seen as a completely different political economy from one region or nation to the next.