Best of the Week
Most Popular
1. Market Decline Will Lead To Pension Collapse, USD Devaluation, And NWO - Raymond_Matison
2.Uber’s Nightmare Has Just Started - Stephen_McBride
3.Stock Market Crash Black Swan Event Set Up Sept 12th? - Brad_Gudgeon
4.GDow Stock Market Trend Forecast Update - Nadeem_Walayat
5.Gold Significant Correction Has Started - Clive_Maund
6.British Pound GBP vs Brexit Chaos Timeline - Nadeem_Walayat
7.Cameco Crash, Uranium Sector Won’t Catch a break - Richard_Mills
8.Recession 2020 Forecast : The New Risks & New Profits Of A Grand Experiment - Dan_Amerman
9.Gold When Global Insanity Prevails - Michael Ballanger
10.UK General Election Forecast 2019 - Betting Market Odds - Nadeem_Walayat
Last 7 days
UK House Prices Most Accurate Predictor of UK General Elections - 2019 - 5th Dec 19
7 Year Cycles Can Be Powerful And Gold Just Started One - 5th Dec 19
Lib Dems Winning Election Leaflets War Against Labour - Sheffield Hallam 2019 - 5th Dec 19
Do you like to venture out? Test yourself and see what we propose for you - 5th Dec 19
Great Ways To Make Money Over Time - 5th Dec 19
Calculating Your Personal Cost If Stock, Bond and House Prices Return To Average - 4th Dec 19
Will Labour Government Plant More Tree's than Council's Like Sheffield Fell? - 4th Dec 19
What the UK Economy GDP Growth Rate Predicts for General Election 2019 - 4th Dec 19
Gold, Silver and Stock Market Big Picture: Seat Belts Tightened - 4th Dec 19
Online Presence: What You Need to Know About What Others Know About You - 4th Dec 19
New Company Tip: How To Turn Prospects into Customers with CRM Tech - 4th Dec 19
About To Relive The 2007 US Housing Market Real Estate Crash Again? - 3rd Dec 19
How Far Will Gold Reach Before the Upcoming Reversal? - 3rd Dec 19
Is The Current Stock Market Rally A True Valuation Rally or Euphoria? - 3rd Dec 19
Why Shale Oil Not Viable at $45WTI Anymore, OPEC Can Dictate Price Again - 3rd Dec 19
Lib Dem Election Dodgy Leaflets - Sheffield Hallam Battle General Election 2019 - 3rd Dec 19
Land Rover Discovery Sport Brake Pads Uneven Wear Dash Warning Message at 2mm Mark - 3rd Dec 19
The Rise and Evolution of Bitcoin - 3rd Dec 19
Virtual games and sport, which has one related to the other - 3rd Dec 19
The Narrative About Gold is Changing Again - 2nd Dec 19
Stock Market Liquidity & Volume Diminish – What Next? - 2nd Dec 19
A Complete Guide To Finding The Best CFD Broker - 2nd Dec 19
See You On The Dark Side Of The Moon - 2nd Dec 19
Will Lib Dems Win Sheffield Hallam From Labour? General Election 2019 - 2nd Dec 19
Stock Market Where Are We?  - 1st Dec 19
Will Labour's Insane Manifesto Spending Plans Bankrupt Britain? - 1st Dec 19
Labour vs Tory Manifesto Debt Fuelled Voter Bribes Impact on UK General Election - 30th Nov 19
Growing Inequality Unrest Threatens Mining Industry - 30th Nov 19
Conspiracy Theories Are Killing This Nation - 30th Nov 19
How to Clip a Budgies / Parakeets Wings, Cut / Trim Bird's Flight Feathers - 30th Nov 19
Hidden Failure of SIFI Banks - 29th Nov 19
Use the “Ferrari Pattern” to Predictably Make 431% with IPOs - 29th Nov 19
Tax-Loss Selling Drives Down Gold and Silver Junior Stock Prices - 29th Nov 19
We Are on the Brink of the Second Great Depression - 29th Nov 19
How to Spot REAL Amazon Black Friday Bargains and Avoid FAKE Sales - 29th Nov 19
Central Banks’ Gold Buying and Repatriation Spree - 28th Nov 19
Another Precious Metals’ Reversal Coming Right Up! - 28th Nov 19
Stock Market 100% Measured Moves May Signal A Top - 28th Nov 19
Don’t Look for Investing Advice in the Media - 28th Nov 19
Why You Should Buy Trailer Park Stocks - 28th Nov 19
Will YouGov General Election Forecast 2019 be as Wrong as their REAL Forecast was for 2017? - 28th Nov 19

Market Oracle FREE Newsletter

UK House prices predicting general election result

The Fallacy of Free Trade

Economics / Economic Theory May 01, 2009 - 05:54 PM GMT

By: Christopher_Quigley

Economics

Best Financial Markets Analysis Article"The causes of wealth are something totally different from wealth itself. A person may possess wealth i.e. exchangeable value; if, however, he does not possess the power of producing objects of more value than he consumes, he will become poorer. A person may be poor, if he, however possesses the power of producing a larger amount of valuable articles than he consumes, he becomes rich.


The power of producing wealth is therefore infinitely more important than wealth itself; it insures not only the possession and the increase of what has been gained, but also the replacement of what has been lost. This is still more the case with entire nations (who cannot live out of mere rentals) than with private individuals."

Freidrich List "The National System of Political Economy"

Any serious national economist who objectively reviews the reality of free trade must eventually come to the conclusion that it is ruinous to a nation. Granted it may seem to work short term in providing "cheap goods" but in the longer perspective it destroys the productive wealth-creating base of a community. The British Empire knew this fact, and while it ostensibly lauded the teachings of Adam Smith and his "Wealth of Nations", under no circumstances did it carry out Smith's doctrine in its actual trading policy. The mandarins from the East India Company, that owned and ran the Empire, had no time for economic nonsense. Whatever they produced in England could not be imported, yet it shoved lower cost goods from India and the Indies onto the new American Colonies, thus destroying fledging industry in the new territories. Again to quote List:

"England was unwilling to found settlements in Asia in order to become subservient to Asia in manufacturing industry. She strove for commercial supremacy, and found that of two countries maintaining free trade between one another, that one would be supreme which sold manufacturing goods, while that one would be subservient which could only sell agricultural produce. In her North American colonies, England had already acted on these principles in disallowing the manufacture in the colonies of even a horseshoe nail, and still more, that no horseshoe, made there, could be imported into England."

It is clear that developing home industries provides jobs, productive capacity and enhanced purchasing power. The opposite policy, advocating the destruction of industry, is ruinous to a nation or empire. When one looks at the current arrangement being entered into by the US government, vis a vis China, it is axiomatic that this policy cannot suit America as a nation and is therefore being adopted to suit a trading elite. The free trade fallacy is utterly destroying American industrial capacity, hampering technological development, ruining real jobs and undermining social stability. Until this modality of executive government is reversed it is a foregone conclusion that America, as a nation, will continue to decline.

The longer this reality is ignored the more serious the problem will become. Eventually, if it progresses too far, the system will manifest such instability that it will fail from the bottom up through bankruptcy of households, small businesses and communities. This insolvency will eventually force change at the top through lack of a viable tax base. As diagnosed by Carroll Quigley, in his "Oscar Iden Lecture Series", the end result will be a reversion to community to provide for the necessities of life. Such a trend is starting because governments are losing the respect of people. Policy makers no longer possess the rigour of honesty and rational truth: they speak in bombast and sophistry. In other words, they no longer know what they are talking about. You cannot fool everybody all of the time. Nothing focuses the mind like unemployment, sickness, homelessness and starvation.

These realities are beginning to allow Americans to become enlightened about the free trade error. More and more folk are starting to question the logic of this economic suicide with China. How can a free democracy do "business" with a tyrannical dictatorship that forces abortions on women if they have more than one child; where travel is restricted; where much labour is forced; where the environment is being despoiled; where free speech is banned and where there is no respect for spirituality and religion? This communist dictatorship is allowed provide "cheap" goods to Wal-Mart who then floods the American market, supposedly for the benefit of the American consumer. However, in essence, this model destroys all indigenous American retail and manufacturing infrastructure as no home corporation can compete with this China/Wal-Mart  business/political model. The fact that no American worker can adequately provide for life, limb and family on Wal-Mart wages simply completes the travesty and inequity of the system.

This free trade model is a fallacy and until this fact is owned up to and faced down all other problems facing America pale into insignificance.

By Christopher M. Quigley
B.Sc., M.M.I.I. Grad., M.A.
http://www.wealthbuilder.ie

Mr. Quigley is 46 years of age and holds a Batchelor Degree in Management from Trinity College/College of Commerce, Dublin and is a graduate of the Marketing Institute of Ireland. He commenced investing in the Stock Market in San Francisco, California where he lived for 6 years. Now based in Dublin, Mr. Quigley actively trades utilising the principles set out in the modules above. This Wealthbuilder course has been developed over the last 9 years as a result of research, study, experience and successful application.

Disclaimer: The above is a matter of opinion provided for general information purposes only and is not intended as investment advice. Information and analysis above are derived from sources and utilising methods believed to be reliable, but we cannot accept responsibility for any trading losses you may incur as a result of this analysis. Individuals should consult with their personal financial advisors before engaging in any trading activities.

Christopher M. Quigley Archive

© 2005-2019 http://www.MarketOracle.co.uk - The Market Oracle is a FREE Daily Financial Markets Analysis & Forecasting online publication.


Comments

Smack MacDougal
02 May 09, 15:05
Confusion Leads to False Beliefs about Fallacies

Wealth advantage goes to the innovator who produces wanted things (wealth) in sufficient surplus to yield a profit regardless of where such things get swapped for other others, usually money of a currency.

Never should anyone confuse managed trade (what the British had during colonialism) with free trade.

Never should anyone confuse internal politics of a people, however reprehensible (the Chinese and their politics) with economics (the science of exchange of one thing for another).


Post Comment

Only logged in users are allowed to post comments. Register/ Log in

6 Critical Money Making Rules