Unforeseen Contingencies

In Cato Institute’s most recent Policy Report, Liu Kin-Ming argues that free trade with China is bad – it doesn’t foster liberalization, and only empowers the authoritarian regime. The U.S. government continues to enforce prohibitions on trade with Cuba. George W. appears to be pushing for trade sanctions against Iran.

What’s wrong with these people? All sensible observers know that free trade enriches people. And the wealthier people are, the less people believe they need tyrannical government to protect them. Independently wealthy people never think they need big governemnt to tell them what to do. (Of course, the independently wealthy sometimes do favor dictatorial government, all too often, but never to dictate to themselves. It's only the poor who are willing to be governed with an iron rod.)

Liu Kin-Ming is simply wrong – the Chinese people are much freer now than they were under Mao. Although China does take a step back for every two forward, China is still moving forward. And in fact, the Chinese government has lost control of public discourse there – Chinese are now online, and free speech reigns. The government still blocks connections to foreign websites dealing with the forbidden 3 Ts (Taiwan, Tibet, Tianamen), but the blocks aren’t effective (my students and I could get around them when I was in Beijing), and more importantly, there are no effective controls over the internet within China. Free speech reigns -- thanks to the West-to-East flow of technology and wealth that free trade brings.

Meanwhile, Castro has benefited from the U.S. embargo against Cuba. First, everyone rallies around the flag when a foreign power stands in opposition – it’s a measure of how awful Castro is that there were boat people regardless. Second, the embargo reduced the amount of information that flowed to Cuba. Information is the enemy of totalitarian states – that’s why controlling information is job number one for them. The free exchange of ideas, of merely a few foreign ideas, this is enough to induce people to question a dictatorship, which in turn is enough to make them bring it down. (When North Korea goes down, as it soon will, take note of the role of ideas. And take note of what the North Korean people say about their ideas, before and after.)

Iran – well, no one in the middle east is more pro-west and pro-American than the Iranians. Even the leadership there (e.g. the ruling clerics, not Ahmadenijad) are vaguely interested in good relations with the west. (Maybe even Ahmadenijad is; he did send a letter explaining himself to Bush, after all.) Full free trade with Iran will do two things: it will put more western ideas into Iran, and it will enrich Iranians, in turn making them more adamant on good relations with the west, and less willing to listen to Ahmadinejad’s populistic crap and the ayatollahs’ preaching.

We have the best weapon in the world. It makes everyone richer, it breaks their dependency on local dictators, it gives them prosperity that makes them resist local demagogues. Let’s let them have it – give the world completely free trade, both barrels!