I didn't win on the Japan Foreign Trade Council Essay Competition, 2017 (about "Free Trade"). Here's the essay I wrote for that competition (sadly, there haven't been such competitions in the subsequent years until now, 2022):
Limits of Free Trade
When talking about the future (for an "ideal future free trade system"), we should think about future at a specific point of time, as well as future in the long-term. When the future is not considered a long-term interval, it will mean an ever-changing dystopia which usually changes for it's usually unacceptable, or inevitably leads to something else by the laws of Nature like it did so far. That's why a good future system should also be a long-term one, somewhat like the cyclic models instead of the exponential 'explosions'. For example, the limitation of technological development could make a model more cyclic, or stable, where easier understanding leads to easier and better planning. Now what about free trade?
Free global trade is allied with Capitalism by default, which, as explained by the book 'Wage Labour and Capital' by Karl Marx [1], accumulates more and more money at less and less Capitalists, and diminishes the equality of chances among the people. Free trade makes international conquest 'by money' easier, and maybe that's why it's justified that Communists called the Capitalist countries 'Imperialists' (and probably not for their kind of Democracy). Thus, it seems that Capitalism supports large countries like the USA or Germany, e.g. look at the rise of German supermarket chains in the European Union, or the world market for Hollywood movies or Silicon Valley products (there are many more that conquered, e.g. fast food restaurants, PET bottled drinks or cars). This is probably not the best solution for smaller countries in the long-term, unless they also have products for the global market and never sell the firm which produces them. Individuals, however, might sell their firms (or even their lands) to foreign buyers, in case those buyers pay a lot of money to them. This way 'privatization' could easily lead to 'globalization', the kind of globalization that is better for one nation than another. It is hard to turn back from this direction, as the economic needs can control politics from the outside, and trade relations could be like double or nothing! It is also a national security issue to produce most essential products (like food) at the home countries instead of importing them from less reliable sources. Free trade could make it harder to accomplish this local manufacturing, for the imported goods may be cheaper (and thereby bought instead of the goods produced domestically). Also, this does not only mean availability, but also quality issues, when the international relations are non-trivial. It can be seen, therefore, that free trade among capitalist countries can increase differences not only between people in the same nation, but between people of different nations as well, making the global system unstable. Other drawbacks of free trade include over-specialization, which makes technological progress quicker than its political understanding, making the system unstable again. (That larger markets lead to more specialization, was already known by Adam Smith [2].) In summary, the main disadvantages of the current free trade systems look like different kinds of risks (that businesses depend on a lot of things), as well as the injustice of the Capitalism coming together with free trade. E.g. too large firms may belong to the disadvantages of capitalism with free trade in the long-term. Now what about the advantages?
Free trade can make international outsourcing possible, i.e. produce goods in poor countries for less wages, and as a side-effect, carry the competent technologies and skills from one country to another. This would diminish international differences in technology, and thereby, in power (even if control is held by the rich foreign owners). This equalization can be understood as a probably good thing. Otherwise, free trade is a natural law, for there is a lot of freedom in Nature, and it is easy to consider natural laws good (they are the default, others are non-trivial). Free trade is also natural law for it makes its actors more competitive (in the short term against any third party), i.e. they enter free trade for its mutual benefits (they can focus on the manufacturing of less products with more efficiency, and buy the other ones). There may also be personal arguments for free trade, e.g. for buying cool stuff by members of the former Soviet Union. (Would they be interested in a barter?) What is this Earth for, if not the human? Availability of things belongs to a better standard of living, at least for those who can also live economically (note the other family members and sustainability, however). When talking about the advantages of free trade, we should also think about its alternatives. Protectionism means a limitation of import, and this is the main issue here. Otherwise, the question of free export may also be important e.g. for weapons and robotics (i.e. trade secrets), but for that issue we can just say: 'if you do not want to export, just do not export'. In case of import, however, there may be a conflict: the seller comes here, and offers the trade for anyone who buys... but this way he would do wrong to other citizens... so can we prohibit the sale if it's the interest of our group (a.k.a. practicing protectionism)?
Well, if Democracy supports protectionism (which can easily happen), then there is the 'principle of lesser evil' to keep Democracy instead of free trade. Democracy is a natural law too, and more natural than many questions it decides. However, there might be different kinds of Democracy, some of which do no look like Democracy (or not even are), and some others are more and more Utopistic or Idealistic. For example, basic (or advanced) human rights or citizen rights can be companions of Democratic Constitutions to make sure that important things are not neglected in legislation for the sake of other laws. (Even if the majority of voters supported a new bill, it would not be valid when being in conflict with a more important law voted by another majority.) As even the type of Democracy is chosen Democratically, we cannot make final decisions or dogmas about free trade, but only make suggestions or ideas. This also means that our ideal future free trade system should include some possible protectionist countries as well as the others... unless we can prove that free trade is always better for everyone... but can we prove it? We cannot prove it, unless we make it! Otherwise, one counterexample is enough to refute, and this would be, for example, about the issue of GMO (genetically modified organisms), and its use in food or other products. It is possible that GMO is allowed in some Democracies, and prohibited by others. This difference in democratic decisions justifies protection(ism) against free trade! There may be other differences in democratic decisions that would be against global free trade, e.g. about fair trade (with 'unfair trade as a market for social injustice'), or Nature conservation by lessening the market for products harmful to the environment (e.g. against ivory trade, whale products or soy bean plantations), or about other ethics of this kind (with new issues coming up in the future). Therefore, those who want free trade thrive, should make it more attractive to the others (and to Ethics), too. This may be done by increasing the advantages of free trade and reducing its disadvantages discussed earlier. Let's see how it could be done...
As for Capitalism, it shall be reformed by some new (and better) Socialist thoughts, and it shall be Okay, but it's not the topic of this essay. As for the risks related to free trade, it shall be limited to non-essential products, and it shall be almost Okay, too (however, there are still not enough good ideas against trading harmful technological devices). As for Ethics, free trade shall also be limited to 'Ethical' (e.g. eco-friendly) products, and almost fine for the third time... but it's already not truly free trade, just free trade on the markets of some product categories. How broad the set of these categories shall be, is one of the questions concerning the limits of free trade. In the age of environmental perils, there might be more justification for the limits than for 'global free trade' economic schools of thought, or even groups of interest behind. Another question is whether the limits of free trade shall be set by simple prohibitions, or by some other means (too)... for example, high taxes (instead of ban) could make free trade possible for the luxury markets, by keeping the number or mass of the imported things low. Also, whenever a foreign country uses subsidies to make its exported goods (indirectly) cheaper, the protectionist could also use taxes on the import to counter-balance those sinister subsidies. Thus there would be free global trade on the 'ethical and also non-essential' product categories (as Democratically trivial), while the other categories could be decided Democratically (which could probably mean very high taxes on unwished imports, and even bans for the unlawful ones), and the general topic is discussed, except from specific ideas to make free trade easier in such a Democratic environment.
Let's begin with an idea closely related to the Japanese shosha companies [3]! They export on the wholesale level, instead of going as deep as retail like German supermarket chains. Why is it better? It prevents the feeling of 'international conquest by money', as they leave retail to national shops. Wholesale can be discussed more easily even with those countries that do not allow free trade. Thus they would fit into our imaginary future free trade system (and maybe also into many other Utopias) more easily than their Western counterparts. In order to increase their trade, they should focus more on those product categories which will probably be traded freely. As they mainly focus on wholesale, they can focus more easily (like the 80-20 rule, i.e. 80 percent of gain by 20 percent of effort; trying to focus on only the success stories). By the way, the shoshas could also trade essential products now and in the future, when they make small reserves of those goods for the case of crisis. Among the many countries, it's possible that there will be one that needs them. The non-trading (i.e. home production) of essential goods is just a guideline for planning (for all countries), not necessarily for implementation.
Otherwise, it is probable that luxury (and highly taxed) products will survive the possible restrictions on free trade, but they would only be sold in some unconventional shops in bigger cities. Planning such a luxury-taxed network could also mean a door to the future. If there were shops into which only the rich go, they would become a status symbol and therefore be popular. It's worth mentioning that luxury products are generally good for the environment, and only bad when they use more material or energy than their cheaper counterparts. However, luxury is luxury because it has usually more investment in working hours than in the raw materials. Working hours are like services, make something special. Luxury is about quality, not about quantity. The environment, however, is mostly harmed by quantity of waste, not the quality. (At least, 'other things being equal', in a real-world scenario where the quality is not too bad.) This luxury market was worth mentioning because in our ideal future free trade system, more products would fall in the luxury category, both for overpopulation predictions, as well as keeping free trade.
In summary, the world is changing very quickly, and technological developments cause a lot of joy and sorrow. Among the many parts of knowledge, it's hard to find a theoretically good (and therefore long-term) solution for future planning. In 2017 CE, national boundaries and the conflicts due to them still seem to be strong. This means that free trade will probably have restrictions as well, where theoretically it's best to produce essential products in each country, and only import those not so essential. This is just an advice, not a sure scenario, so a limited number of essential products can also be produced for export even if it's probable that less and less countries will import them. The masses buy products of giant firms, but there can be a way to get rich by selling to the luxury market. Free trade is projected to remain in the luxury markets, but the causes of the masses may be formed by new Socialist movements.
References
[1] Karl Marx - Wage Labour and Capital (by LibriVox recordings)
[2] Adam Smith - Wealth of Nations (by LibriVox recordings)
[3] JFTC Essay Contest website (www.jftc.or.jp)
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