C_steam

Economics is not my strong point, but I've been wondering about this 'free market' stuff - you know, pull out of the EU but still trade in a free market and also extend our trading links with the rest of the world, in particular the old commonwealth.

On the other hand, we've moaned here about the destruction of the fishing industry, boat building being done in Poland, apples from all over the world EXCEPT britain, IT jobs going to India and so on - all of which (unless I've got this dead wrong) are the effects of a free market in a global economy.

So how to balance protection for our industries V the free market? Is UKIP calling for free trade the right approach?

Paul Birch

You've got it dead wrong! Most of this is down to government interference in the economy. In the case of the fishing industry, to Britons being prevented from fishing our own waters, while foreigners are not only permitted but encouraged, through grants of British taxpayers' money, to steal our fish. Not even remotely a free market or free trade.

C_steam

Told you economics wasn't my strong point! But how would - say - farming - survive without import tariff, as its dying on its feet now?

John Carter

Farming is easy. Just introduce a law which says "if we can grow it here and we have enough capacity to supply our needs, you can't import it".

Obviously we need to maintain internal food supplies in case there's ever another war - the last thing we need is imports blocked and country full of people who've forgotten how to farm.

As for the rest, I'm not so sure. Part of me says that the free market is best. But then part of me says that the free market is best employed within protected national boundaries.

__________________
There are three kinds of people in this world: Libertarians, fascists, and those who haven't been paying attention.

Aardvark

What we have is hardly free. The subsidies that some countries receive make it impossible to compete. France gets so much subsidy for its sugar production that it dumps 1.5 million tons on world markets each year at prices that even Carribean growers with cheaper labour can't match. The sugar is actually sold at less than its real production cost.

The WTO also interferes with trade and subsidies.

The people who suffer are the small farmers, subsistence growers who take their surpluses to local markets and the consumers who receive the same packaged material on a world wide basis. The people who gain are multi-nationals and industrial producers who can drive down their costs to a level that makes it impossible for anyone to compete.

To do this they destroy the very fabric of the world. The rain forests are now disappearing to make way for soya beans to make cheap animal feed - cheaper now to keep animals in sheds that in fields. There has been no slowing down in the rate of destruction of the environment and already half of Spain and Portugal have become classified as desert. Southern France is going the same way. The crises in Sudan and Niger ar part of a regional crisis that has seen the Sahara spread across whole countries as farm land dries up.

This is the result of unbridled international co-operation in industrial levels of production that are destroying fair and balanced trade and with it the world in which we live.

Andrew

That’s from the Tory Reform Group’s website.

Basically I do believe that free trade is the best answer. As Conservative Way Forward says: The most effective system of wealth creation. Free markets are blind to gender, race, class or religion.

I don’t believe in radical liberalisation of the economy, and embracing free trade and free markets without constraints. We mustn’t forget that businesses never think of their own people – they think of their own profits.

It’s due to this that sometimes the government must intervene.

arden forester

Sweeping Statement, Andrew!! :wink:

Some companies are profit driven only, but others do look after staff concerns. My beef with the Government is that they turn a blind eye to corruption, pension raiding, illegal trading, and trading insolvently.

The Rover story shows how a group of slick corporatists can con their way through five years of trading, then get a whole barrowful of cash from a pre-election twitchy government, then say the "game's up"!

Are we as voters in a democracy so stupid? I feel at times we supinely allow the "people at the top" to get away with it.

The one thing that Kilroy did that momentarily got me thinking about Veritas was his assertion that there was a better way, by more truth telling.

There are many people in this country suffering from the fact that their pensions are hopelessly inadequate, their companies are floundering, and that they are dumped on from on high!

We have success stories in this country, yes we do, and we should shout about it and be rightly proud and supportive. But then there are the crooks, and these we need to deal with much harder!
Yes, Andrew, quite right, but not constraint but incentives to do better. Positive rather than negative.

Paul Birch

We've been through all this before on another thread. Domestic food production is one area in which most countries have a net comparative advantage, because the cost of shipping and distribution markedly outweighs the cost of production. In a free market almost every country would produce enough food to feed itself.

But even if they didn't, so what? It's easy enough, in a free market, to boost production in an emergency, so there are no serious national security implications. Otherwise it simply doesn't matter who does what. Free trade cannot hurt the economy of any free market country, because in a free market you only make trades that benefit you.

Perhaps it's worth repeating the obvious yet again. Foreign suppliers cannot possibly out-compete all local production; if there are lines in which they have a comparative advantage and sell you imports, there must be other lines in which they have a comparative disadvantage and buy your exports. (With a few minor caveats) you can't get one without the other. The combination benefits both of you.

C_steam

Bear with me on this Paul - I can't see then why so much food which is capable of being grown in this country is imported - unless it is subsidised at source. In which case a free market has to be genuinely free - of tariff and subsidy at all ends, yes?

Paul Birch

We import food (and lots of other goods) for variety. We also export huge amounts of food to other countries (because they like variety too). This is good.

Yes, a lot of what we import is subsidised. So what? If it's being subsidised by foreigners, that's to our benefit and at their expense. Stupid of them, but it's no skin off our nose. On the other hand, if, as in the CAP, the subsidies use money taken from British taxpayers, that does hurt us - but that's nothing like free trade and no free trader or free marketeer would defend it.

Certainly a genuinely free market has to be free at both ends. Nonetheless, even if the foreign markets are unfree, it is still in our best interests unilaterally to free our internal and external markets. If we constrain free trade we hurt ourselves whatever other countries may be doing.