Free markets vital for a free world, The Age

There’s plenty more at stake if the Doha Round of trade talks fail, writes Tim Wilson.

THE Cairns Group — which represents 18 of the world’s largest agricultural economies — met in Cairns last week to discuss the ailing state of the Doha Round of negotiations in the World Trade Organisation. The aim was to provide impetus to restart talks following their indefinite suspension in late July.

The group’s message is clear: it does not want the round to fail. Free trade brings wealth creation and provides the most powerful force for economies to develop and meet the material needs and expectations of the poorest. The five-year anniversary of the September 11 terrorist attacks should help refocus the developed and developing world on the benefits of free markets and our ailing commitment to one of its pillars, free trade.

On September 11, planes flew into the symbols of America’s success. American 77 flew into the Pentagon, a building that represents America’s military strength. The precise destination of the doomed United 93 remains unknown, but it was almost certainly heading for symbols of America’s mature democracy, the Capitol building or the White House. When flights United 175 and American 11 flew into the World Trade Centre, they were attacking the symbols of the United States’ economic wealth, a wealth built on the foundations of free markets and a wealth enjoyed by other free-market economies, notably allies of the US.

Al-Qaeda wants Islamists to gain control of the levers of government, like the mullahs of Iran, the Taliban of Afghanistan and the Hamas of the Palestinian Authority. Their aim is to impose their will on people, resorting to the legitimate use of force that government provides. Free markets remain an anathema to this agenda. Free markets represent the empowerment of the individual against the excesses of government power. They stand for voluntary exchange over coercion. They provide the material abundance government cannot provide.

Meeting people’s material needs can be achieved either by a central authority or by encouraging individuals to take responsibility through the marketplace.

Through central direction, government becomes responsible for meeting the material needs of people and, in the process, must gain control over our lives to ensure that outcome. Where it needs to, it can rely on the legitimate use of force to impose its will.

Free markets keep checks on the excesses of government regulation. Where government becomes too large, it discourages the flow of investment capital necessary for economic development. In the process, it undermines the capacity for it to meet the needs of the population.

Free markets ensure a free media that can remain critical of the excesses of government authority. The absence of a free market places the media in the hands of government that can use and abuse its authority to impress its ideas on people. Communist dictator Joseph Stalin once famously said: “Ideas are more powerful than guns, we would not let our enemies have guns, why should we let them have ideas?”

The spirit of Stalin’s quote is representative of the challenge that oppressive governments now face in trying to control our thinking. We now live in an age of super-empowered individuals where the internet has provided each person with the opportunity to produce websites and blogs that can command the readership of newspapers.

The tragedy is the licence it also gives to terrorists and their sympathisers. It is little wonder that oppressive governments are working hard to limit the reach of the internet because of its capacity to empower individuals and expose them to new ideas outside the government-sponsored line.

Free markets are the foundation of the wealth and decadence terrorists so despise. Our wealth and success embarrasses them and the false hope they promote through religious servitude. Perhaps, most importantly, free trade promotes peace. In the past, countries have gone to war to accumulate resources and land. Free trade enables goods, services, skills and technology to be acquired through voluntary means, undermining the justification for conflict.

When al-Qaeda and its sympathisers gain control of government, they can abuse the legitimate use of violence and authority that comes with it. Iran and Afghanistan provide ample evidence of how it will be used. Mistreatment, torture and execution through the judgement of moral police will follow.

The victims will be the same as all the victims of the abuse of government power, those most vulnerable, including ethnic and religious minorities, women and homosexuals. Free markets promote wealth creation and empowerment of the individual and that undermines these excesses. Yet July’s suspension of WTO talks shows how little we understand of the benefits of free markets for building and maintaining social and political freedom. The fate of millions of the world’s poor lies dormant while trade ministers debate how the round can be saved to help enrich their countries.

The anniversary of September 11 should remind us there is more at stake than just poverty eradication. If we want to live in a world that stays on the offensive against terrorism, it is time we got the Doha Round back on track.

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