In The Times of March 31st we have an extraordinary attempt from Noreena Hertz (a Fellow of the Judge Business School at Cambridge University) to bring free trade down to size (“Let’s shake off the shackles of free trade.”) Her main prongs are that our politicos at the G20 summit this week are “in uncharted waters” (they are not), that they “acknowledge that the credit crunch was man-made” (indeed it was, but not by “a complacent blindness to the to the downside of untrammelled free-market economics”) and that “all the absolutism of the key tenets of neoliberalism (privatisation, deregulation, balanced budgets, have been rejected by all but the most dogmatic. Apart from one – the primacy of free trade”).
How wrong can one be? What planet is she on? Politicos will always blame anyone but themselves, of course, but where exactly are these untrammelled free-market economics, when government spending alone is almost certainly at an all time high and state regulation is still rising having reached it long ago? Put the two together and you’re miles over half the national income.
It gets worse. Like Gordon Brown, she doesn’t even understand free trade.
In my book I quoted Gordo thus: “In the 19th century Britain led the world in equating free trade with liberty only when business and politicians came together for that shared purpose. In this new century the same kind of joint effort is required from government and business before the last window closes to restart the talks.” (Gordon Brown, reported in The Times, 6 November 2006).
Just a little word left out, Gordo. In the 19th century the defining feature of Britain’s free trade was its unilateral nature. Trade treaties didn’t come into it. We knew then that the practice of free trade in just one country, (to the extent that it was allowed any trade elsewhere), brought gains. Treaties are just an excuse for stalling.
With or without treaties the “Gospel of free trade” which Noreena describes as “What an extraordinary thing to say” is actually unassailable by logic; a simple economic truth. Don’t truths count any more? If so, why don’t we practice a little protectionism between London and Birmingham, say?