Previous post Next post

In an Age of Pandemics We Need More Freedom to Trade, Not Less

There are many who use the coronavirus crisis to blame freedom to trade for the current epidemic. And, of course, there are those who are already arguing for autarky, closing our borders, and producing everything locally.

But we have been living in a world that relies on trade between different populations since the birth of civilization.

For example, eight thousand years ago, there was an intense trade in lapis lazuli, a semiprecious blue stone, between what is now Afghanistan and the first agricultural civilizations of Mesopotamia, in present-day Iraq. Lapis lazuli was one of the most important symbols of high social status.

Five thousand years ago, Ötzi (“the Iceman”) was killed in the Alps in what is now Austria. He carried a hunting ax cast from copper from southern Tuscany, in the Italian Peninsula.

In the first century AD, Pliny the Elder, adviser to Roman emperor Vespasian, complained to his ruler that through trade with India the empire’s gold was pouring out of Rome at a rapid rate in exchange for lavish Chinese products, such as silk and other vanity items. Marco Polo’s published recollections about China inspired generations of explorers to find their way to the land of fabulous riches. Columbus had accidentally discovered the American continent while searching for a Western route to China through the Atlantic Ocean.

But there was not only trade in physical goods. For centuries, an uncountable number of people traveled for spiritual reasons to holy sites, ranging from Santiago de Compostella in Spain to Mecca in Saudi Arabia, or Tibet.

Others traveled for fun, curiosity, or out of a desire for discovery and knowledge.

There were also those who set out on foot, on horseback, or aboard a vessel, because in the familiar world of their homes there was no room for them or they were persecuted, and sought to conquer a new land to continue their lives. And there were some who set out to prey on foreign peoples.

Free trade and voluntary interactions between various villages, cities, and countries are part of our human nature, not merely a peculiarity of our time. Nor does all this occur in the name of “chasing profit,” as is so often claimed.

Certainly, many real-world barriers limit these interactions. The lack of human knowledge and technical capabilities have long limited the depth and scale of trade and travel. It is no coincidence that deadly epidemics repeatedly caused enormous damage to ancient societies. A plague that killed between a third and half of the population ended the rejuvenation of the Byzantine Empire under Emperor Justinian in the sixth century. In Europe, the bubonic plague pandemic of 1347 (the Black Death) caused massive destruction in the most developed areas of the continent, killing as much as 50 percent of the population. There are countless similar cases throughout human history. The novel coronavirus is just one of them.

There is a big difference between previous epidemics and the current outbreak of COVID-19; the virus has struck humanity in a comparatively free world. We are now living in a world that is in many ways more commercially free, a state of affairs whose origins can be traced back to at least the eighteenth century.

Free trade and the abolition of legal constraints on economies has allowed ordinary people—instead of just the wealthy, as in ages past—to improve their own lives through economic exchanges, either materially or otherwise. In a world with freedom to trade, a craftsman such as George Stephenson, tinkering with technical problems, could become the inventor of the steam locomotive, and a clever and talented telegraph operator, such as Thomas Alva Edison, could become to one of the world’s most respected inventors and the founder of Edison General Electric, which would become General Electric after a merger.

It is due to this freedom of thought and action that we now have many more resources at our disposal for the treatment and prevention of disease, including COVID-19.

The lesson to be learned is not the failure of trade to offer countless benefits, but that many governments reacted late, and then in a destructive manner. China suppressed information about the new epidemic.  The state-run healthcare systems of the world also performed poorly in reaction to the emergency. Italy is a prime example of this failure, whereas the South Korean healthcare system, one of more market-oriented ones in the world, has been one of the most successful in dealing with the virus because of its flexibility.

Autarky offers few solutions. We need more freedom to allow for research cooperation across countries in case of epidemics. We need more markets in order to develop a flexible healthcare system, one that seeks to serve the customers—the patients—and is not solely responding to government orders.

What we don’t need is governments that withhold information and then in a last-minute panic order the rushed closure of whole countries while also cutting local populations off from essential goods and services produced worldwide.

Full story here Are you the author?
András Tóth is the Director of the Carl Menger Institute, Budapest
Previous post See more for 6b.) Next post

Permanent link to this article:

Leave a Reply

Your email address will not be published.

You may use these HTML tags and attributes: <a href="" title=""> <abbr title=""> <acronym title=""> <b> <blockquote cite=""> <cite> <code> <del datetime=""> <em> <i> <q cite=""> <s> <strike> <strong>

This site uses Akismet to reduce spam. Learn how your comment data is processed.