Why have principles of free trade failed to become the norm across polities

Free trade is a buzzing concept in modern times, with most governments across the world proclaiming to promote it.  Indeed, the last thirty years or so of global economic integration is based on free trade principles – also referred to as laissez-faire capitalism.  Definitely, there are many advantages to be availed as a result of free trade arrangements.  At the same time, it also has its own set of drawbacks.  One should also make discernment in what exactly ‘free trade’ means.  This is because, often, politicians use the term for its rhetoric appeal while implementing policies that are protectionist.  So, while free trade is beneficent in its purest form, modern policymakers have hijacked the concept to serve the interests of select private businesses at the cost of smaller business enterprises and the majority of the electorate. (Dunkley, 2004, p.53)  The rest of this essay will look into how free trade, despite strong arguments in its favor, has not always been adopted in economic policy making.

It was by the start of 1970s that currents of change were detected in the global economic order, with nationalism and protectionism being replaced by neo-liberalism and free flow of capital. But there were also concerns that this new economic paradigm can lead to excesses and decadence. For example, the unsavory side-effects of free trade in this period includes “the appearance of a nearly feral form of entrepreneurship in which black marketers, drug barons, arms merchants, rackets bosses, Mafiosi, and other profiteers were emerging as the economic and political leaders of the social transformations underway in their respective societies.” (Buchanan, 2000, p.1) These developments acted as a disincentive for a few governments to draw up free trade policies.

Another reason why free trade practices are not uniformly accepted is due to the effect it has on workers and consumers.  Some believe that under this system, workers become helpless pawns of their capitalist masters, compelled to sell their labor power at sub-optimal costs.  The only theoretical alternative they have to evading this exploitation is to become destitute, which is a far greater misery.  Multi-national corporations (MNCs), which are the facade of free trade, are perceived as coercing citizens to unwillingly participate in the capitalist market system, while also leaving consumers with no choice but to buy their products. (List, 1997, p.51)  In the book titled Telling the Truth about History, author Joyce Appleby traces how MNCs came to be the dominant institutions of our age.  Here, the author makes some scathing observations about the nature of capitalist enterprise that is the back bone of prevailing free trade systems:

“One of the distinguishing features of a free-enterprise economy is that its coercion is veiled. . . . The fact that people must earn before they can eat is a commonly recognized connection between need and work, but it presents itself as a natural link embedded in the necessity of eating rather than as arising from a particular arrangement for distributing food through market exchanges….” (Joyce as quoted in Levite, 2002, p.32)

The free-trade system is also criticized for promoting ‘wage-slavery’, whereby human beings are reduced to mechanical automatons as they go through the drudgery of work each day.  Here too, the slavery is not so much express as it is veiled.  Instead of use of violent force, the threat of employment and attendant destitution serves as the whip. (Levite, 2002, p.32)

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