Sunday, February 24, 2013

Trade & Charity

When I talk to my friends about international trade someone often raises (more or less) this objection:
If we're going to trade, that's fine, but where we can we should buy from our own country first. Why do we really need to buy something that's made all the way across the world when we can build (grow, provide, etc.) it here?
The economist's answer: restricting purchases to domestic goods make lives of consumers worse (they would have purchased imports for a reason - typically because it means they can afford more) and removes the incentive for producers to reach their full competitive potential. While some people can certainly afford the luxury of purchasing based on country of origin, those who live paycheque to paycheque cannot.

But if what we want is to ensure that purchases are made from Canadians first there are ways to address the problem of increased poverty - when we restrict trade we can compensate the worst off with more generous social supports to ensure they can afford the more restricted and expensive lifestyle we're imposing on ourselves. If we're OK with this trade-off, the economist's answer falls short for many people.

But we shouldn't want to ensure Canadians have first right to exchanges with one another. 

We might decide that we would rather live in a more restricted world, but we can only enforce it by dictating that people who are struggling to build better lives with much less than we have must also live in a world that is smaller, poorer and offers fewer opportunities. It is arrogant to believe we can make this choice for others. It is irresponsible to make it through neglect. (We certainly get that point when it happens to us.)

How interesting that many of those concerned by international trade favour providing charity to foreign nations, receiving nothing in return, or buying hand-made trinkets from entrepreneurs in developing countries, fully understanding that this is a tremendous help!

Why does this feeling of global community and goodwill fade away when it comes to, say, tomatoes? To beef, chickens or milk? To cars, furniture or clothes? Why are we willing to let the developing world provide us with trinkets but not willing to accept them as equals?

I love living in a global marketplace. I love walking to the store up the street and buy something grown on the other side of the planet. I love knowing that just by buying something that I want I'm interacting with and improving the lives of people all the way across the world.

If you ask me to choose between seeing entrepreneurs around the world as adversaries or peaceful neighbours, I'll choose peace every time.

I know it's not normal for me to think of the person who grows roses in Kenya as equally deserving of my care as a strawberry farmer only a few kilometers away, but the world would be a better place if it was.

By the way, if you want to support businesses in the developing world as equal partners, check out these shoe companies I learned about at a talk by Magatte Wade at last weekend's International Students for Liberty Conference. Move over TOMS - these shoes are made by Africans in Africa and help to create the jobs that they need to create lasting improvements in the lot of the developing world.

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