Politics

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Does America need free trade? No. History confirms that free trade is not necessary to create a prosperous economy. In Ancient Egypt, they were able to create prosperity without established trade routes to trade surplus grain. Instead, they endeavored to maximize the efficiency of the Nile River and were able to supply a large population with plenty to spare.

Free trade, as we know it today, was created to establish trade without tariffs and dissolve the monopoly Great Britain had over trade in the early colonies. Although, because gold had been the most widely accepted form of money between nations, gaining a greater quantity of gold was still a primary goal of trade between nations. Therefore, trade was not promoted the way it is today because trade could result in the loss of circulating capital (Smith, n.d). Consequently, trade might not be as necessary to a nation as we have been led to believe. Free trade is crucial to prevent exclusive trade, not to generate prosperity.

Today, we would call this protectionism and would claim that this type of thinking would have a negative impact on a global economy. However, because a primary motivation of free trade is to find the cheapest price, free trade may not be the same as fair trade. Investopedia describes free trade as trading with limited barriers like tariffs, which facilitates more efficient transactions between countries. They continue to praise free trade for the economic growth in China and India during the last 40 years (Investopedia, n.d.). Although, has this growth in China and India been the result of free trade or forced trade?

Although, according to Alan Greenspan in an interview given on "The Daily Show," the former chairman of the Federal Reserve Bank revealed that he did not believe that there was such a thing as a free market since the Federal Reserve began controlling interest rates in 1913. He went on to confess that a free market existed when the gold standard regulated the amount of capital that was circulating exchanged within an economy. If Alan Greenspan considers that there is no such thing as a free market because of the presence of the Federal Reserve Bank; and, if the Federal Reserve has the power to inflate the dollar at any moment, which would make bonds created in exchange for importing more goods than we export (Wheelan, 2010). Does this mean that there is no such thing as free trade either, and that recent growth in India and China is the result of exclusive trade with the Federal Reserve Bank?

Nevertheless, there are still benefits to trade and because we are able to trade more efficiently than ancient Egypt, we are able to increase our own utility through trade. Although, a nation should also not have to trade against its will. If a nation does not wish to trade, free trade should allow them the right to refuse and employ every auto worker in their own nation if that is what they wish to do.

Therefore, there are two sides to the subject of protectionism. On the one hand, protectionism can prevent competition and create a monopoly of the market within a nation. On the other hand, protectionism can be the effort of a nation to prevent harassment from foreign nations who wish to steal their resources through free trade. The latter may have resulted in the creation of fair trade, which is designed to facilitate fair wages for workers in foreign countries, especially agricultural workers (Business Dictionary, n.d.). Although, free trade and fair trade appear to be confronting the same wolf that is trying to protect himself with a monopoly of the market.

As a result, what we truly need is more than free trade, fair trade, or protectionism. We need what Michael Schluter from the Jubilee Centre refers to as relational economics. He suggests that a great way to begin building a relational economy, is to re-establish a Sabbath (2012). The fourth commandment would create more equality within the marketplace because everyone, including servants and animals required for the creation of revenue, are required to rest (Exodus 20:8-11). Albeit, a nation that holds power over other nations, does not eagerly hand over this power often (Smith n.d); but, if you are content with your own food and clothing on the Sabbath (1 Timothy 6:8), what can buying and selling actually protect you from (Nehemiah 10:31)? Therefore, the Sabbath is beneficial to everyone and would be a great way to establish fair and free trade between nations.

References
BusinessDictionary.com. (n.d.). Fair Trade. Retrieved from http://www.businessdictionary.com/definition/fair-trade.html

Investopedia. (n.d.). Free Trade. Retrieved from http://www.investopedia.com/terms/f/free-trade.asp

Schluter, M. (2012). Economic Renewal: Building a Relational Economy. Jubilee Centre. Retrieved from http://www.jubilee-centre.org/economic-renewal-building-a-relational-economy/

Smith, A. (n.d.). An Inquiry into the Nature and Causes of the Wealth of Nations. Public Domain. [Kindle Edition]. Retrieved from Amazon.com

Wheelan, C. (2010). Naked Economics Undressing the Dismal Science. New York: W.W. Norton & Company.

White, L. (2011). A Gold Standard with Free Banking Would Have Restrained the Boom and Bust. CATO Journal, 31, (3). Retrieved from http://0-eds.b.ebscohost.com.library.regent.edu/eds/detail/detail?vid=1&sid=19ebf3ea-9bca-4a96-b138-b153b6f5dd7c%40sessionmgr115&hid=121&bdata=JnNpdGU9ZWRzLWxpdmU%3d#db=bth&AN=67075492

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