For Unilateral Free Trade

Today, let us discuss free international trade. The ToI has a lead editorial on the China-India bilaterals underway. But here is something from BBC News I got thanks to Vipin Veetil – that our The State is refusing to open the old Stillwell Road that connects north-eastern India, via upper Burma, to south-western China. Opening up this road is crucial for the region’s development – and also for regional peace.

Remember: Where the local economy doesn’t exist, young men have no option but to carry a gun and join one predatory group or another. The BBC story says that many local politicians in the north-east are in favour of opening the Stillwell Road. I am on their side.

Note that they have opened the Srinagar-Muzaffarabad road (but refused to rebuild the old Mughal Road); that they have opened the Sikkim-China trade route; and that they are therefore being inconsistent by not opening up the Stillwell Road.

Of course, the ocean is the biggest highway – and they have not opened up our 5,500 km coast for free international trade.

Inconsistent thinking marks our The State’s actions.

Unlike our Chacha Manmohan S Gandhi State, John Prince-Smith was a clear thinker. He was the father of the German free trade movement in the mid-19th century. I discovered him last week in Detmar Doering’s great collection of liberal readings. My copy was published in Kabul in 2002. I hope many learned Afghans have read this important book.

In a nutshell: John Prince-Smith says that the issue of free trade is directly linked to ideas of the legitimate powers of The State. He says that “the demand for freedom of trade is the demand for unlimited division of labour between inhabitants of different states.” He goes on to show why political forces have no business in interfering with the “economic community” – which includes foreigners. This economic community transcends all national boundaries, its growth is good for all, and this is the best way to prevent war – which is always political. John Prince-Smith decries politics in international trade. He says: “Freedom of trade can become general only through unilateral action.” I agree. Let us get The State out of international trade. Let an international economic catallaxy flourish.

In this context, here is an interview with Jagdish Bhagwati I found thanks to Chandra, which speaks a different language, the language of “policy” – that is, trade policy.

In particular, Bhagwati recommends "export orientation" as a policy worth pursuing, which is something Peter Bauer dismissed long ago as nonsensical. In reality, imports are more valued than exports. There are huge profits to be made in importation - and these profits are always accompanied by huge gains for consumers.

What I say is No Trade Policy. In the latter scenario, the Consumer is King. John Prince-Smith would have agreed. According to him, the only role of The State is the "production of security." I wonder what he would have thought if he knew about the Indian State Police. Hear the Indian rap song, "Ban the police" by clicking here.

There is much on John Prince-Smith online – thanks to Googleda.

There is a Wikipedia entry here.

Ralph Raico has written a detailed essay on Prince-Smith, published by the Mises Institute. It is well worth a read.

And google books has digital images of a book by John Prince-Smith on – guess what? – MONEY. This book is dated 1813, so it must be by the father of the Prince-Smith we are discussing here, who was born in 1809.

Wonderful to find another great hero of Liberty, of Unilateral Free Trade. Of economics above politics.