| As I noted above, true "free trade" relies on an enormous level of trust between states, if the "comparative advantage" model is adopted. One of the things which is often parroted is that the neoliberals are more "pragmatic" than others: they claim to be working with the grain of human nature, and that is illustrated by the much repeated refrain that "communism is a lovely system but it just can't work" because of that same human nature. Such statements pass virtually unchallenged it seems.
But it is obvious that the free market, with comparative advantage, is at least as utopian as any alternative. So for this part of the complex of assumptions which we are asked to take on faith, there seems to me to be a problem. That problem arises from the fact that the propositon relies on a conception of "human nature" which is as false as any other. In this case the difficulty arises from reductionism, I think. "The invisible hand" depends on the idea that everyone pursues their own interest selfishly and rationally; and their interest is wholly economic. That is reasonably explicit in the theory as propounded by Adam Smith, I think.
That reasoning excludes the actions of groups, and pretends that each person is always and only an individual: the social effects are unintended and unconsidered. They arise from the sum of individual decisions each directed towards the interest of the people making them. A moment's reflection reveals that as inadequate: people do cooperate, and they do sacrifice their own economic interest for other values, at least some of the time. To sustain the notion they don't one has to recast the behaviour as something else: and so we get the denial of the possibility of altruism, for example. It is explained away, since it cannot be ignored: and that is necessary to the model.
More seriously it denies fear. In reality no group of people who identify as "us" is going to accede to a situation where their food supply is wholly under the control of "them", if they can possibly avoid it. Yet that is an inevitable outcome of this theory if it is applied in pure form.
Thus the notion of free trade is impractical, and this is what we see. The current conception of " free trade" is nothing of the sort. What we actually see in practice is not free trade: it is mercantilism. It is interesting to me that that word is out of fashion, at least in the press, and is seldom encountered. The impression is that it was an older theory which proved to be wrong and was discarded, in the same way as theories in the hard sciences are abandoned when they are proved wrong. But economics is not a hard science: it is not a science at all, or so I think.
One feature of mercantilism was that the conditions of trade were regulated by the state, very largely. It is for this reason that the neocons can legitimately say that it is not a part of their model: because state control is explicitly rejected in their world view. For them, the "invisible hand" produces the best outcomes and any attempt to interfere will necessarily produce less than optimal outcomes. That is the surface argument. Once again it is a cover for something quite different. As I have argued in other contexts this only works if the focus is on the activity of government and the state. A convenient, but ultimately misleading, dichotomy: for the issue is power and control: not fundamentally about which body wields it. Corporations and financial institutions can also wield that power, and can do so either directly, or covertly through usurping the power of the state. And this is what has happened, I suggest.
Free trade will not be achieved because of the level of interdependence it requires. In theory the nation state could wither away and we could all be citizens of the world happy to accept that the most basic needs will be met through efficient production of essential goods in lands far far away, of which we know nothing. Thus we would accept that the middle eastern countries produce all the oil, since their reserves make that economically rational, and will lead to the best outcome. In your dreams! I contend that that will neve be allowed to happen, because we cannot afford to be at the mercy of an outgroup for something so crucial to our lives. And so with food, and many other things. The idea is laughable if you lift your eyes above the economic parapet and face the facts of human interaction. That is not to say that a unified world is impossible: nor to say that it is undesirable and should not be pursued. Thus the idea of globalisation is attractive to many, including those on the left: only they call it internationalism, and they sing songs about it. The globalisation of the neocons is nothing like that internationalism. The cooperation which underpins that idea is foreign to their analysis, because it depends on accepting that our existence as social animals is at least as important as individualism. And that is at odds with their narrative. Once again ideas which have a surface congruity mean very different things and it is important to be clear about what we mean.
In practice the notion of "free trade" as outlined in the theory, has no part in what we are actually doing. It is, rather, mercantilism disguised as something altogether more noble. Indeed the need to disguise it tells us a great deal about the status of the theory of human nature as wholly selfish: few actually believe it, though many will display the faux realism they think it indicates. The lie is apparent in such notions as "trickle down": we have to pretend that in the end our selfish behaviour will lead to betterment for all: and that is essentially what Adam Smith and his successors did. Smith may be forgiven since there was little experience at the time: and we should remember that he explicitly warned against exchanging one master for another: he was opposed to excess profit and over-powerful corporations. But that is glossed over and I imagine he would be horrified by the use made of his theories today.
That what we have is not free trade, but rather mercantilism, is demonstrated in many ways, I think. As an example, the IMF and the WTO exist to promote and maintain the principles of "free trade", it is claimed. Yet there is an obvious problem. The IMF can only impose its prescriptions where a country requires its help: that is, needs loans from it. So when a country is in trouble it bounces in and demands austerity measures. It cannot do that if there is no lever in the form of financial assistance required. Thus there are enormous subsidies paid to rich farmers in the western world: but such subsidies must be abolished if IMF help is requested. "Dumping" and "quotas" and "subsidies" direct and indirect are a universal feature of the rich world. They gained their wealth through mercantilism, and they have not changed one iota. But poor countries (many who are poor precisely because of the history of mercantilism and the imperial past which underpinned it) are not allowed to do the same thing. They must accept "free trade" in terms we would never accept for ourselves: their food and water and power must be controlled or supplied by outsiders, and they are to have no objection to that because of the theory which masks the reality of what we are doing. This is rank hypocrisy, no matter how you slice it.
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