EFN Asia 59, Conference 2014 in Hong Kong, part 4

Continuation of notes made by Karthik Chandra during Conference 2014. The full 25-pages notes are posted in http://efnasia.org/wp-content/uploads/2015/10/EFN-Asia-2014-Conference-Report.pdf

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Day 2: November 7, 2014

Session 5: ‘The most radical form of egalitarianism is equality before the law’

Dr. Tom Palmer

Executive Vice-President for International Programmes

Atlas Economic Research Foundation, USA

• Introduction about the Occupy Wall Street – background and the demands behind this movement – started by a group of disgruntled students mostly from privileged backgrounds and having incoherent demands and philosophy. In particular, their demands were based on the concept of ‘99% and the 1%’, which proved to be a very popular meme and this entire Occupy Wall Street movement quickly caught popular imagination.

• Focus on the meme ‘99% vs. 1%’ - originally started by the students who were essentially anti-globalization. The irony of it is that it quickly became popular across the globe as the rallying cry of the Occupy Wall Street.

• The global inequality has consistently reduced over the past 20 years and is still falling. But, within countries, the inequality is increasing/at elevated levels.

• Impact of immigration on inequality within countries should be carefully understood and decoded: for instance, the US allows lot of immigrants (from poor Latin American countries and especially those with poor education and hailing from very poor economic backgrounds) and therefore the income inequality within USA is much higher (i.e. Gini coefficient is much higher for USA). In contrast, the European countries (eg. France, Germany, etc.) have much lower immigrations (due to comparatively more restrictive immigration policies vis-à-vis the USA) and also have lower inequality i.e. lower Gini coefficients. The lesson from this is that we can have (a lower equilibrium) equality by making others lives worse.

• But, the current debate on inequality (Eg: Thomas Piketty’s Capital) never focuses on global inequality but mostly on inequality within countries. Tom Palmer pointed out the conceptual faults and defects in his book’s thesis.

• Made a strong case of why people like Piketty are less egalitarian than someone like himself who is a ‘hardcore capitalist’. In essence, the question is why does inequality in possessions still amount to more egalitarianism?

• The reason he says is that those who advocate equality usually are advocates of unequal political power. “egalitarian societies” (socialist/communist) survive on unequal political power (eg: communist Soviet Union’s ‘blat system’ or communist China ’guanxi’ system) : putative equal allocation of resources in such systems is not through free market pricing but through exercise of unequal political power. Paradoxically, this results in final unequal allocation of resources and all consequential harmful outcomes. This is true of all totalitarian systems whether they are rightwing or leftwing.

• Usually, the state’s interventionist policies in the name of egalitarianism (Eg: subsidies to special interest groups) serve to transfer wealth from the unorganized majority to the organized minority. This is nothing but predatory and rent-seeking behavior by the organized minority. That is why capturing political power assumes so much importance, especially in heterogeneous societies; the powerful few control the levers of redistribution to favored groups.

• On the other hand, and paradoxically, the so called unequal/capitalist societies actually give a greater opportunity to achieve equality/egalitarianism in outcomes by allowing a freer, more open allocation of resources based on market prices.

• At the heart of creating a more just and egalitarian society is the concept of equality before the law – where we have ‘rule of law’ and not ‘rule of men’. Only such a system would allow the less privileged to get a chance to move ahead in life.

• Therefore, aspirational claims to equality would be realized only with market-based provisioning of equality of opportunities. Eg: The rise of Dalit entrepreneurs in India. Prior to 1991, they had notional, paper based equality rooted in Indian Constitution and the law. But only after free markets expanded are they having a real shot at prosperity.

• Equality of opportunity, equality to access, equality to power, equality before law…this is the real equality that we should aspire for and not mere notional equality that attempts not just redistribution/reallocation of resources: ostensibly, from rich to the poor, but actually by tearing down the rich – and not lifting the poor.

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Session 6: Special Session

‘The ASEAN Economic Community (AEC): Opportunities and Challenges for SMEs’

Organized by SEANET (Southeast Asia Network for Development)

‘Why SEANET is needed?’

MC: Wan Saiful Wan Jan

• The AEC is coming up in 2015. But, there are growing calls for protectionism and also not much demand for pro-market policies and concerted effort by forces. Most pro-trade  organizations are focused on local and national issues. But anti trade organizations are well organized. SEANET hopes to fill this gap and meet this requirement.

Yam Tunku Zain Al Abidin ibni Tuanku Muhriz

President, IDEAS, Malaysia

• IDEAS organisation is committed to promoting free market policies and pro growth approaches in the ASEAN region.

• Overview of the history and background of the ASEAN group.

• Among these countries, fears among SMEs and labour group exist that big corporations would dominate the AEC region. However, they actually would greatly benefit from greater opening of the markets in various countries. Eg. SMEs would benefit from greater access to institutional finance, greater ease of doing business and accessing larger markets thanks to lesser regulations and hurdles and better property rights.

Dr. Kriengsak Chaeronwongsak

President, Institute of Future Studies for Development, Thailand,

Senior Fellow, Harvard University

• The benefits of AEC are multiple and spread across various sectors: (1) unified, single, huge market and production base, (2) coherent and integrated external policy.

• The benefits of AEC for entrepreneurs are clear. The most to gain from AEC are the large, established businesses. However, SMEs too would need to be ensured better opportunities; for this, several steps must be taken (none of which are protectionist and anti-markets and therefore lack fidelity to principles of liberalism and free market economics). It is important that the potential benefits to SMEs are articulated effectively.

• In general, among the SMEs, after the AEC is formed, the small and the large enterprises would survive; but it is difficult to foresee how medium enterprises would survive in this new, changed world. Small-scale enterprises can leverage their competitive advantage of mobility, nimbleness and flexibility (i.e. lack of inertia) in this new system and then be better prepared than medium enterprises to face the changed market.

• On the opposite spectrum, large companies would have deeper pockets and greater access to capital. But the medium enterprises are neither fast-and-nimble nor have access to huge capital. Hence the threat to medium enterprises in the new AEC dispensation: they should either scale up or scale down to survive.

• At the same time, there should be a concerted effort to ensure that SMEs and small players do not “lose out” in the new, liberalized market dispensation. They justifiably need hand-holding and capacity building so that they are prepared for the new, upcoming market scenario.

• One key aspect is access to institutional finance by the SMEs: we need to ensure that banks are free from political interference and nepotism/favouritism so that they are not forced to end up with the burden of non-performing loans after lending to undeserving candidates. 

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See also: 
EFN Asia 44: Day 2 of Conference 2014, November 10, 2015 
EFN Asia 45: Growth, Inequality and the Philippines, November 14, 2015 
EFN Asia 56, Conference 2014 in Hong Kong, part 1, March 28, 2016 
EFN Asia 57, Conference 2014 in Hong Kong, part 2, March 29, 2016 
EFN Asia 58, Conference 2014 in Hong Kong, part 3, March 30, 2016

EFN Asia 55, Presentation by Tom Palmer in Bhutan 2015

Among the theoretical presentations during the EFN Asia Conference 2015 in Bhutan was made by Tom Palmer of Atlas. Reposting some slides and other discussions, in italics, below.

Happiness and Satisfaction.

Happiness, if understood as joy or contentment, it may be present today and gone tomorrow.

Life satisfaction, on the other hand, seems both more stable and easier to compare across cultures.

“The poor man's son, whom heaven in its anger has visited with ambition, when he begins to look around him, admires the condition of the rich.. ... He thinks if he had attained all these, he would sit still contentedly, and be quiet, enjoying himself in the thought of the happiness and tranquillity of his situation. He is enchanted with the distant idea of this felicity. …. To obtain the conveniencies which these afford, he submits in the first year, nay in the first month of his application, to more fatigue of body and more uneasiness of mind than he could have suffered through the whole of his life from the want of them. … With the most unrelenting industry he labours night and day to acquire talents superior to all his competitors. … he makes his court to all mankind; he serves those whom he hates, and is obsequious to those whom he despises." -- Adam Smith, The Theory of Moral Sentiments

There are some problems with their analysis

• The distinction focuses on broad participation and constraints on power, but constraints need not be participatory, e.g.:

– Independent judiciary

– Independent central bank

– Division of powers, federalism, etc.

• Political institutions can be extractive and broad based at the same time

• The biggest logical problem they miss is that extractive is not the contrary of inclusive; exclusive is the contrary of inclusive

• And the biggest concrete problem they miss is populist cronyism

• Populism promises mass predation on the middle classes, “plutocrats,” or economic minorities

• And inevitably – Results in cronyism and empowered elites

The damage of extractive regimes can be undone, however, with a program of inclusive economic growth

• Democratic and broadbased reforms that make clear promises of shared prosperity can succeed

• Inclusive politically because they are broadbased and pluralistic, &

• Inclusive economically because they “allow and encourage participation by the great mass of people in economic activities” 

Inclusive Growth Requires Economic Freedom and Limited, Effective Government.

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See also:
EFN Asia 51, Draft program, Day 1 of Conference 2015, November 05, 2015 
EFN Asia 52, The 5 fishbowls of economic freedom in Asia, November 20, 2015 
EFN Asia 53, Successful Conference 2015 has ended, November 25, 2015 
EFN Asia 54, On Hong Kong and China, free trade and CEPA, January 27, 2016 

FNF forum with Tom Palmer, July 15, July 23, 2010
UP Forum with Tom Palmer, July 15, July 23, 2010

EFN Asia 44: Day 2 of Conference 2014

It was a dynamic start on Day 2, November 7. A speed dating where participants and speakers were lined up on chairs facing each other and talk to each other for about three minutes and when  the bell rings, move to the next chair and talk to the next person. This way, participants are "forced" to talk to other people whom they may be shy or unwilling to talk to :-)

One of the key questions to discuss was, what do you think of the sessions and topics the previous day. For new faces participants, the immediate questions of course were the names, institutes or groups in their countries, what they are doing, and so on.

Not enough time to spare, the speed dating was stopped after several rounds and the hosts asked for volunteers what they can share from this experience. I was among those who volunteered and I said that while I agree with Dr. Razeen Sally's conclusion the other day that the "good news" is that materially and healthwise, we are better off today compared to our predecessors a century or many decades ago, I disagreed with his "bad news" that continued restrictions and bureaucratism by many governments may also limit and restrict innovation and individual freedom. I think that freedom has already gained enough momentum that as governments regulate more, tax and control more, civil society and average individuals will resist more because they are better informed, better networked with other friends and sympathizers around the world, thanks to modern technology and social media.

I shared this opinion to the  participants that I talked to during the speed dating, so far many of them agreed with my observation.

Fred McMahon of Fraser Institute (Canada) was one of the other guys who volunteered to share.

The next session was a Keynote speech by Tom Palmer of the Atlas Economic Research Foundation (USA). He talked about "radical equality" and that is equality before the law. He also criticized Thomas Pikkety's book and his arguments for more forced equality. That we should work for a world where the poor can  rise up instead of tearing down and demonizing the rich.

The next panel was a special session launching the South East Asia Network for Development (SEANET) initiated by IDEAS in Malaysia. Wan Saiful Wan Jan, IDEAS CEO introduced and moderated the panel. Speakers were the young President of IDEAS, Yam Tunku Zain (left) and Kriengsak Chareonwongsak of the Institute for Future Studies for Development in Thailand (right). Dr. Kriengsak focused on the potentials of the ASEAN Economic Community (AEC) coming by the end of 2015.

Then delegates and participants of the Council for Asian Liberals and Democrats (CALD) and Liberal International (LI) came and joined us for the special EFN-CALD session.

Opening speeches were given by Dr. See Soon Juan of the Singapore Democratic Party, Bill Stacey of LRI, Markus Lonning, a former German Federal Commissioner for Human Rights, Olaf Kellerhoff of FNF Asia and Human Rights Department, and Emily Lau (below) of the Democratic Party of Hong Kong. She is a very articulate, warm and passionate speaker and she shared her experience when she and other leaders were arrested by the HK government for many hours and the protesters were teargassed by the HK police. It was the first time that I heard her and I became an instant fan of her.

Then a panel discussion was briefly held. From left: Jules Maaten, FNF Philippines Country Director, was the moderator. Parth Shah of CCS-India, Jay Kun Yoo of Uri Party in S. Korea, Saumura Tioulong of Cambodia National Rescue Party, Sin Chung Kai of Democratic Party of HK and MP member, and Sethaput Narueput of Thailand Future Foundation.

A group photo before we went to the HK Legislative Council (LEGCO) for a tour and meeting by some delegates. Then a dinner gala sponsored by FNF and LI.

Good conference and networking, as usual. Thanks to EFN and FNF.
That night there was a farewell gala dinner. Here with Martin Lee, a known HK opposition politician along with Emily Lau, others. With Tony Abad of FEF in this photo.

Meanwhile, a former FNF official, Stefan Melnik, noted in fb that

reducing inequality is not a prime concern of liberalism, reducing poverty is. the reduction of inequality might be a side effect of liberal policies promoting growth, but there's no guarantee. to GUARANTEE a reduction of disparities you would need massive state intervention. this would undermine the prospects for economic growth and we know that the less state intervention we have, the better the prospects for growth. and we know that economic growth in most cases leads to a reduction of poverty. this is what empirical research tells us. Like this one.

Amen to Stefan's observation. I highlighted in my brief talk during the Asian Cafe on Day 1 of the conference, that it is not inequality per se that is the problem, but the condition of the poor if they have not risen up after decades of economic growth, especially in fast-growing economies in Asia. I will discuss that in my next blog post.

All photos from FNF East and SEast Asia fb page. Also from Jadranco Brkic. Thanks.

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See also: 

EFN Asia 40: Liberalism, Growth and Reducing Inequality, August 1, 20149, 2014

EFN 41: Program of Conference 2014, Hong Kong, September 30, 2014

EFN 42: Other Speakers in Conference 2014, November 04, 2014

EFN Asia 43: Day 1 of Conference 2014, November 06, 2014

Hayek in Asia 2: Shanghai Austrian Economics Summit 2012

Friedrich Hayek, an Austrian scholar in economics and legal/political philosophy who died 20 years ago, is famous among many free market-oriented scholars in Asia. Friedrich Mises, another Austrian scholar, is famous too.

The International Society for Individual Liberty (ISIL, http://www.isil.org/), a US-based libertarian organization, is co-sponsoring and financing a big conference in Asia, the Shanghai Austrian Economics Summit this coming July 20-23, 2012, in Double Tree by Hilton Hotel, Shanghai, China.

There will be 24 speakers, see the list here, http://shanghaisummit.wordpress.com/speakers/. Seven of them I personally know and have met at least once. From left to right:

1. Xingyuan Feng, CIPA-Unirule, China; 2. Barun Mitra, Liberty Institute, India

3.Hiroshi Yoshida, IPSA, FEI, Japan; 4. Rainer Heufers, Siap Solutions, Singapore

5. Ken Schooland, GIH, Hawaii, USA; 6. Tom Palmer, Cato-Atlas, USA; 7. Mary Ruwart, ISIL, USA

Barun and Xingyuan, I see them yearly since 2004 in different regional and international free market conferences and meetings. Sometimes I see them twice or thrice in one year, Barun especially as he would come to Manila as a speaker in other conferences here.

Hiroshi I've met in 2005 during the round table discussion on Hayek's book "The Constitution of Liberty" in Phuket, Thailand. Since then, I'd bump into him from time to time, but not yearly. Rainer worked at the Friedrich Naumann Foundation for Liberty (FNF) for many years, he helped organized the Economic Freedom Network (EFN) Asia annual conferences, and I have met him several times there.

Ken Schooland I've met twice, in Hawaii in 2007 then in Jakarta I think in 2010. He is the author of The Adventures of Jonathan Gullible: A Free Market Odyssey. Mary I've met only once, in Hawaii in 2007, while I've met Tom Palmer several times since 2008. He also came to Manila in 2009 and Minimal Government Thinkers helped organized four lectures for him in three universities here plus FNF Manila office.

I cannot attend this conference as I do not have a sponsor to pay for my plane fare and hotel, but I wish the organizers of this important event great success in terms of attracting more participants, especially from China. ISIL noted that Chinese scholar, Kenli "Li" Zhao Schoolland, has successfully organized Austrian Economics lectures in the past few years, so they have made this year's conference an international event.

I also hope that my other Chinese friend there from CIPA, Liu Junning, who at one time was considered the "Hayek of China" because of his deep intellectual discourse on liberty, rule of law, and other themes that Hayek discussed, would be able to attend. I heard a few years ago that the China communist government has marked him as a "dissident" and hence, is monitoring his movement.

Fellow defenders of individual liberty, free market and rule of law, in Asia and elsewhere, let us keep the torch burning.
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See also:
Top Asian free market think tanks, January 26, 2009
Hayek in Asia, September 20, 2010
Hayek 12: Friedrich Hayek's 20th Death Anniversary, March 26, 2012
(it has links to Hayek 1 to 11, discussion on some chapters of Hayek's book, "The Constitution of Liberty")
Why is Harry Thinking About Going to China? from HarryLeaks blog

On the recent US housing bubble

The recent housing bubble burst in the US was mainly caused or created by the US government itself, not by the private enterprises. Why?

The US government -- through the Federal Housing Administration (FHA), Federal National Mortgage Association (Fannie Mae), and the Federal Home Loan Mortgage Corporation (Freddie Mac) -- forced home ownership even to those who have no income, no job or asset (NINJA), the so-called "NINJA loans".

Dr. Tom Palmer of the Atlas Economic Research Foundation showed how the crisis built up, in his 23-slides powerpoint presentation at the University of Santo Tomas (UST) here in Manila last July 2010, Liberty, Limited Government, and the Rule of Law in the Wake of the Global Financial Crisis:

The Economist magazine produced this chart. See the figures for the US -- ratio of house price to rental from late 2008 to 2010 was below 100. Implication: why rent when it is cheaper to get a new house.

And we still hear many people blaming capitalism for the recent financial turmoil in the US, when it was a US government-induced crisis in the first place.

Government cannot just force NINJA loans and expect that it can get away with it. Government cannot just meddle with private pricing of private goods and services and expect that no crisis will happen in the future.

Free Trade 12: Trade and World Peace

Last April 02, 2009, I wrote this:

Today, leaders of the world’s largest economies, both rich and developing, will meet in London to "save" the world economy in general, and their respective economies in particular.

The G20 summit is a high profile meeting; there are lots of demands and expectations, lots of lobby interests to be resolved and pleased. Among such groups are the protectionists and anti-free trade interests.

This group reasons out that since the economy is bad and lots of jobs have been lost and are threatened to be lost further, consumers should patronize locally-made products and services. The group further posits that governments should reduce, if not prevent, huge importation of competing goods and services made from other countries. This way, local jobs will be preserved and/or created, and the economy will recover.

There is one huge fault in this kind of reasoning: It does not recognize that people trade with each other voluntarily because they realize there are "net gains" for them. By choosing the best quality product (raw material or final consumer item) at the lowest price possible, a consumer benefits. By having huge number of potential buyers, a producer continuously improves on his product or service to please consumers who want the “best product at the lowest price possible”.

The International Policy Network and the Atlas Global Initiative teamed up to launch the Freedom to Trade Coalition (F2T) and the Free Trade Petition to pressure G20 leaders not to give in to strong protectionist moves in their respective countries and regions.

When the Petition was launched in London yesterday, it has attracted more than 2,000 signatories from many countries around the world. The Petition categorically declares the following, among others:

“Trade’s most valuable product is peace. Trade promotes peace, in part, by uniting different peoples in a common culture of commerce – a daily process of learning others’ languages, social norms, laws, expectations, wants, and talents.

Trade promotes peace by encouraging people to build bonds of mutually beneficial cooperation. Trade unites the economic interests of the peoples of all nations who trade with each other.

A great deal of rigorous empirical research supports perhaps the most tragic example of what happens when the proposition that "trade promotes peace" insight is ignored is World War II.

International trade collapsed by 70% between 1929 and 1932, in no small part because of America’s 1930 Smoot-Hawley tariff and the retaliatory tariffs of other nations. Economist Martin Wolf notes that "this collapse in trade was a huge spur to the search for autarky and Lebensraum, most of all for Germany and Japan."

The most ghastly and deadly wars in human history soon followed.”

A number of leaders of member-institutes of the F2T Coalition – including this writer – believe that for free trade to succeed, it should be done unilaterally. Problems arise when people accept the idea that countries should first restrict trade, and then negotiate for some alleged reciprocal benefits, because this legitimizes the role of the State in trade. Countries and governments do not trade with each other; people do. So governments have no legitimate role in restricting or negotiating trade.

Unilateral free trade means that business and political leaders of an economy simply declare, "We want more choices of goods and services from anywhere. Come bring them here, zero (or near-zero) tariff, zero or near-zero non-tariff barriers, and very little bureaucracy (trade facilitation)." Hong Kong does that. North Korea and Myanmar do not do that.

Meanwhile, the US President, the British Prime Minister, and other G20 leaders are busy convincing each other and the public that the world needs now more deficit spending, more borrowings, and more government debts, to "save" the world economy. Huge debts of the past were not enough; they need even bigger debts and bail-outs.

But some European leaders prefer equally threatening moves like the creation of a new global financial regulation framework or mechanism. One such mechanism is large-scale harassment of so-called "tax havens". The US, EU, Japan, and other rich countries that are on the "more-debts-more-bail-outs" train know perfectly that they are heading to the "more-and-higher-taxes" direction, to pay past and present debts. Hence, economies that offer some "tax relief" to global corporations should be pounced. Everyone should pay the high cost of "saving" the global economy, now and in the future.

At the end of the day, people around the world only need free trade, bigger choices of which products and services they will buy or not buy, of which type of employment arrangement they can accept or reject, and of which technology they will need or ignore. People do not need more deficit spending and more debts by governments. They do not need more financial and economic regulations. They do not need more aid or government-to-government transfer of taxpayers’ money.

People need greater control of their own lives. They need global peace to allow them to pursue their professions, to pursue their business and consumer interests, with the least taxation, regulation and intervention by governments and bureaucrats possible.

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Today, writing this in Los Angeles, California, USA. 

Free Trade and Liberty Forum

Trade is the process or mechanism by which people can sell their extra output of goods and services, use the money from such sale to buy the extra goods and services by other people that they need for their household and work needs. Thus, a rice or chicken farmer can sell their extra rice or chicken to other people, they use the money proceeds of such sale in order to buy fuel or spare parts for their hand tractors or fertilizers or animal feeds, to buy new dress, shoes and school supplies for his children, to build a new or repair and old house, to buy beer and pork barbecue, and so on. This important and common sense function of trade and voluntary exchange, is the main reason why trade should be left unrestricted, why trade should be as free as possible. 

Unfortunately this thinking is not shared by certain sectors of our societies. There are many alibis against free trade, foremost of which is that it steals local jobs. By buying goods made abroad and imported into the country, local manufacturers are deprived of additional revenues, some of them will close shop, resulting to job lay-offs and hence, higher unemployment, higher poverty.

Fighting trade protectionism is among the panel discussions tackled in the recently concluded “Atlas Liberty Forum” held at Hyatt Regency Century Plaza, Los Angeles, California, April 24 to 25, 2009. It was sponsored by the Atlas Economic Research Foundation. Atlas gave me a travel scholarship and hotel accommodation, that is why I was able to attend this event, and I was the only Filipino among nearly 300 participants from more than 30 countries around the world. 

The speakers from this panel were Alec van Gelder from International Policy Network (IPN) in London, Dan Grisworld from Cato Institute in Washington DC, and Seyitbek Uzmanov from Central Asia Free Market Institute (CAFMI) in Kyrgyztan. The panel moderator was Tom Palmer, the new Atlas VP for the Atlas Global Initiative.

Mr. van Gelder talked about the global campaign for free trade initiated by Atlas and IPN, the Freedom to Trade coalition that has attracted the participation of about 70 independent institutes and think tanks from nearly 50 countries, among others. Mr. Grisworld talked about the various tariff and non-tariff barriers that the American protectionists have put up against certain imported commodities, to the disadvantage of American consumers who have to pay higher for otherwise cheaper goods made abroad. And Mr. Uzmanov talked about the free trade coalition they are building in Kyrgyztan with a single mission: to make their country the “Dubai of central Asia” within the next 2 to 3 years. 

This goal by CAFMI is indeed laudable and ambitious, despite the fact that it is a very young think tank and its two top leaders are young too, only in their mid-20s. I asked them why they chose Dubai as their model for free trade when Hong Kong is more famous in having a unilateral free trade policy, they replied that many people in their country do not know Hong Kong much while Dubai is more known to them. Hence, the “Dubai inspiration” for a unilateral free trade project.

There were many other interesting panels in the Atlas Liberty Forum, like “The financial crisis and the attack on sound money” and “Fund raising” for free market think tanks. 

Trade protectionism is one aspect of dictatorship. The protectionists and their implementers in government dictate to the consumers what goods and services they can or cannot buy from abroad, if allowed to import, by how much quantity, from where and at what price. People just do not realize the dictatorship aspect of trade protectionism.

There is a new shade of protectionism that is recently shaping up: green or eco-protectionism. This type of protectionists argue that while rich countries keep their environment clean and refrain from using dirty and highly polluting technologies, the producers from poorer countries do not. Thus, the goods are produced cheaply there because they are using old and dirty technologies, they do not strictly control air quality in manufacturing plants, and such production processes emit plenty of carbon dioxide into the atmosphere, which contributes to greenhouse gases (GHGs), which contributes to global warming and climate change. 

The solution therefore, is to impose a “carbon tax” on imported manufactured goods from poorer countries that do not strictly limit their carbon emission. This tax is meant to “compensate” for the use of dirty manufacturing technologies that “contribute to global warming”, resulting in lower amount of importation (since the imported goods have become more expensive), lower amount of carbon emission in the world.

This reasoning is faulty on two counts. One, it is wrong to restrict international trade because it reduces or kills the right of choice of the local consumers. And two, it is wrong to blame carbon dioxide as the “cause” of global warming. See my article last week on this, “Cooling reality vs Warming politics.”

It is important that Atlas continues holding its annual Liberty Forum because the forum helps not only to discuss and clarify certain issues that affect the world, issues that affect the individual liberty of people around the world. The forum also allows liberty fighters to network with each other, to learn from each other.
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See also:
Free Trade 6: Counterfeit Drugs Worldwide, December 21, 2007
Free Trade 7: Class War, Eco-protectionism and Climate, April 02, 2008
Free Trade 8: Global RIce Price, May 13, 2008
Free trade 9: Parallel Importation of Medicines, May 22, 2008
Free Trade 10: More on Unilateral Trade Liberalization, July 15, 2008
Free Trade 11: Global Petition, Keynes, March 19, 2009