Wednesday, January 4, 2012

Ron Paul on Free Trade

Jeffrey Miron is quoted on Public Radio International claiming that Ron Paul is a poor representative for Libertarianism.

While I have some disagreements with Paul, Miron is mistaken about one aspect of Paul's position:

Miron said the classical Libertarian wants government to stay out of your wallet and out of your bedroom. Paul, he said.....also opposes free trade, something virtually all Libertarians and most economists support.

During this campaign, Ron Paul has regularly responded to charges that he is an "isolationist" by explaining that he favors free trade. However, Miron's charge has an element of truth.

Ron Paul has opposed most existing and proposed free trade agreements, describing them as managed trade. Instead, Paul calls for unilateral free trade. That means that U.S. businesses and households should be free to buy or sell goods and services anywhere in the world. Plenty of libertarian economists support this position.

Unfortunately, trade protectionists are dead set against that approach, and as a practical matter, more politicians are willing to "accept" letting American households and firms buy imported goods if foreign governments simultaneously agree to reduce restrictions on U.S. exports. Firms that anticipate increased foreign sales provide political support. Most economists (including libertarian ones,) agree that it is better if the foreign governments reduce their restrictions on trade too.

Unfortunately, there are plenty of special interest groups who oppose reducing U.S. government restrictions on imported goods, even if foreign governments reduce their barriers to U.S. exports. They oppose these agreements. Ron Paul makes common cause with them, because rather than making these agreements, he thinks the U.S. should simply allow foreign imports without restriction. There is really no need to negotiate a complicated agreement.

Probably most libertarians, including libertarian economists, disagree with Ron Paul's approach. They believe that these sorts of real world, complicated free trade agreements, are better than nothing. For example, Ron Paul opposed NAFTA, while most libertarian economists favored the agreement.


  1. I guess the difference lies in that Paul is a "pure" libertarian on free trade; no compromise, no deals. While others are more willing to politically maneuver. My libertarian side agrees with Paul, but my political side agrees with the others.

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