Enter Stage Gabbing

Free trade and democracy are one

By Steven Martinovich

(April 23, 2001) Although it's in vogue to describe U.S. President George W. Bush as a dim bulb, the same man who graduated Harvard University with a MBA, he was entirely correct on April 17 when he told the Organization of American States that free trade was necessary to end poverty and strengthen democracy in Latin America.

"Democratic freedoms cannot flourish unless our hemisphere also builds a prosperity whose benefits are widely shared, and open trade is a foundation for that prosperity and that possibility," Bush said.

"We must affirm our commitment to complete negotiations on the trade agreements of the Americas by January, 2005. Nothing we do in Quebec will be more important or have a greater long-term impact."

Other leaders agree and a democracy clause is likely to be added to the agreement, one that will force member nations to respect individual and human rights if they wish to remain a part of the free trade pact. Although nations like Haiti and Peru are shaky democracies at best, they are marked improvements from what they used to be.

Opponents of the free trade pact, however, believe that it will undermine democracy, impoverish blue collar workers, destroy the environment and strip jobs from North America, that giant sucking sound that Ross Perot famously warned about and never occurred. While their desire for the negotiations to take place in the open is entirely sound, their basic assumptions about free trade itself are entirely wrong.

What few people - both those pro and con freer trade - seem to realize is that capitalism, ostensibly what a hemispheric trade agreement would promote, is a social system that recognizes individual rights - including property rights - and is not primarily a system of competition. This is a definition that shouldn't surprise anyone given that most societies, even tyrannies like Cuba, witness some form of competition. Capitalism is different because its competition flows from freedom of action. Capitalism is the freest form of exchange between individuals. No one is forced to enter this relationship if they do not agree with the terms.

In a nation like Cuba, notably excluded from the Summit of the Americas, a human being is ruled by force and they cannot act on their conclusions. In a capitalist state, a person can think and act on those thoughts. As philosopher Leonard Peikoff wrote, "[a] free market ... is a corollary of a free mind." Every other social system in the world, no matter how benignly marketed clashes with a person's freedom to act on their rational thoughts.

"The richest country in history was the United States at the time when it was also the freest. As to the other direction, look around the globe. Virtually no one, not even the highest ranking Ivy League professors any longer, tries to pretend that dictatorship leads to prosperity," wrote Peikoff.

Critics of free trade agreements, and by extension capitalism, should realize that the most stable workforces, cleanest environments and strongest democratic institutions are those who practice greater and unencumbered trade with their neighbours. Freedom of action allows individuals and nations like those in North America to promote the very things those critics of free trade agreements want. They would be hard pressed to argue that North America is worse off by any measure with the free trade agreements signed by Canada, the United States and Mexico.

Those three nations today are cleaner, more prosperous and their democratic institutions are better off with more accountability - not only to their citizens, but citizens of other nations as well. It's time to bring those benefits to the rest of the western hemisphere as well.

This editorial originally appeared in the Kitchener-Waterloo Record on April 21, 2001.

Thanks for reading,

Steven Martinovich


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