Wednesday, January 28, 2009

The End of the Bush Era: Free Trade

This is the fourth in a series of essays, "The End of the Bush Era." It is a list of what I believe are the most prominent successes and failures of this prolific politician who, for better or ill, is going to become an indelible part of history.

Thinking of something that George W. Bush did right is something of a brainteaser, but there are things he did right.

Bush signed more free trade agreements in his 8 years in power than any other president before him.

Free trade allows for the transfer of wealth between the rich and the poor through the means of commerce, and I find that fundamentally something very agreeable.

It has lifted millions out of poverty and has created a new international middle class all over the world, and holds more promise yet. In principle, it is noble without wanting to be noble. Fundamentally, it is mercantilism which is amoral but not necessarily immoral.

George W. Bush was a great proponent of it. Speaking at Lima, Peru at the APEC summit in November 2008, he summarized his thoughts on the matter: "free trade, free markets, and free people."

Of course, free trade isn't the panacea that's going to solve poverty around the world.

Bush's dogmatic adherence to free-market ideology partly sparked the global credit crisis in 2008, but it wasn't all his fault.

He was merely running with the baton Ronald Reagan and Margaret Thatcher started in the 80s: the trend of government deregulation and privatization. Smaller government, controlled spending, more power to the market to make its own decisions.

Every president in the US has been carrying on that mantra since, and not just in the US. Deregulation and trade liberalization is what brought China out of the doldrums to face a brave new world. India's "Hindu rate of growth" of 2% is now a distant memory. These economies now "slow down" at 6 to 9 percent GDP growth.

As far as the promise of alleviating poverty goes, it fairs decidedly mediocre. Despite almost three decades of this ideology slowly spreading, the only country in the world that can boast an absolute reduction in the number of people living in poverty is China.

India has a decreased proportion of people living in poverty, but it has a swelling population and so roughly the same number of people are suffering this scourge.

In addition, a lot of the countries with whom a country may trade freely with may not truly be "free" themselves. It is no small thing that China keeps its currency the Yuan, artificially weak compared to other currencies, or that it has lax rules on compensation for employees, or that it generates most of its energy from cheap and dirty coal power or dammed rivers at the expense of local ecology.

But it is part of the solution. Free trade encourages people-to-people contact. It encourages engaging with people, even if you may differ with them. It opens new horizons and business opportunities, and offers new perspectives. And last but not least, it offers people a good chance to make some moola.

In this George W. Bush was where it's at. It is truly unfortunate he wasn't right more often.


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I write essays in my spare time on things that are important to me. The ones that I feel are any good, or make any sense, I put them up here. :)