Republican and Conservative political analysis and commentary

John Stossel's latest column, "The Double 'Thank-You' Moment," is on the wisdom of free trade, is a must-read. Real Clear Politics has it here. Here's an excerpt:

Economists have long understood that two people trade because each wants what the other has more than what he already has. In their respective eyes, the things traded are unequal in value. But this means each comes out ahead, having given up something he wants less for something he wants more. It's just not true that one gains and the other loses. If that were the case, the loser wouldn't have traded. It's win-win, or as economists would say, positive-sum.

We experience this every time we have that double thank-you moment in a store or restaurant.

It doesn't matter that you wish the price of coffee were lower. We want the price of everything to be lower (except the price of what we're selling, whether it's our products or labor). What matters is that you bought the coffee for a buck.

The story doesn't change if you buy from someone in another city or another state. It doesn't change even if you buy from someone in another country.

That's why I worry when I hear politicians say things like, "I believe in free trade, but it has to be fair trade". That particular quote is from a presidential contender, Mike Huckabee, former governor of Arkansas.

"Fair trade" is code for protectionism disguised as retaliation against other countries that may or may not practice protectionism, and it's a bad sign when even Republicans talk about "fair" rather than "free" trade.

We should practice free trade no matter what others do. Why? Because freedom is good in itself. If foreign governments want to hurt their citizens, it's no reason for ours to hurt us.

People who live in different countries are divided by a political boundary, but boundaries are accidents of history or the results of politicians' arbitrary decisions. Political boundaries are economically irrelevant. When left free, people trade across them as naturally as they do across state lines. Trade is trade. Buyer and seller both benefit.

I never quite understood all the hand-wringing about "trade deficits" with other countries. The concept is flat illogical...

A few years ago when the media was filled with stories and Congress was wracked with angst over the huge "trade deficits" with Japan thanks to Americans buying boatloads of Hondas, Toyotas and such, I often laughed at the illogic of it.

For illustration purposes, if the only trade between the U.S. and Japan was Japan sold two Tokyo-built Toyotas to Americans at $30,000 apiece, and we sold them one $30,000 Chevy truck, the media and the government statisticians would describe it as a $30,000 "trade deficit."

But it's also a "One Toyota Surplus," isn't it? I mean, sure, Japan got our $30,000, but we got their Toyota. An exchange was made. And Japan only wants our $30,000, after all, because, ultimately, it can be used to buy stuff from America.

And that's a fair trade.