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The Choice:A Fable Of Free Trade And Protectionism
MAKALE #5956 © Yazan Psk.Nazlı TUTAN | Yayın Kasım 2010 | 3,798 Okuyucu
PURGATORY- Free Trade or Protectionalism?

“ Defendant: Not yet,but in the time I believe... Magistrate:That will be all,Mr.Ricardo.You are sentenced to a period of wandering until further evidence is brought to the attention of this court. “

“Purgatory” is used as a symbol in the book to represent the aim of the book, and as a reference to the name of the book. Is there a deep gap between what free trade and protectionalism bring about to a country like the harsh distinction between hell and heaven? According to magistrate,to answer such a question,the best idea is wandering in purgatory, which is a neutral place for making good and efficient decisions for the future. But if you have your certain right in your mind like David has,the first thing to do is convincing others to choose the best alternative, that is,free trade which David Ricardo sees as the best way to create a heaven which is full of goods,services,leiusure to enjoy and pleausure; a place in which “The notions of the world become part of a 'universal society' united,not seperated by their national interests.” Although you have been a stubborn defender of protectionalism,the soft wind of David Ricardo carries you to purgatory and make you to see another alternative to which you were blind before. Now you are becoming able to see positive and normative effects of İnternational Political Economy and trade policy. Now you are making a “Choice”...

. DAVID RICARDO versus ED JOHNSON Free-Trade versus Protectionalism What is the meaning of “choice”in economy jargon? “ 'Choice' is selecting an item or action from a set of possible alternatives.Individuals must make decisions about desired goods and services because these goods and services are limited.This key term constitutes the substructure of this book. On the one side,Ed Johnson who is a fictional American television manufacturer seeking trade production from television manufacturers; on the other side the spirit of David Ricardo who was a particular champion of free trade,which made him part of the minitory in Britain's Parliament in his day. Each has different choices in their economic point of view and each has different reasons for their choices. The book is written in the question-answer format, which have a directive effect on readers which tries to make them a party close to the liberal view of international affairs. Although Ed Johnson is a protectionalist,he is a passive-supporter. He has very passive sentences generally in question format and weak defences to active and acute arguments of David Ricardo. David Ricardo tries to pursuade Ed via time tunnel: Firstly,depiction of America after free-trade, and then depiction of an America with protectionalism. David Ricardo's base point is his “theory of comperative advantage”which is “the roundabout way” to trade. At the beginnig of the book David explains his theory to Ed His arguments and numarical examples totaly aim to prove his theory's efficiency,logic and its framework.Numerical examples are generally based on television sector to attract Ed easily who is a television manufacturer. David tells the direct way and roundabout(indirect way) of making a television set.When direct way is used to built a factory, raw materials must be combined with people and machines to produce televisions. With the indirect way of making televisions,televisions are made by the means of something else like trading drugs for television. He gives a Japanese-America example which trade between them is based on the roundabout way. “Japan drug industry isn't able to efficiently create and supply all of Japan's demand for drugs,so Japan imports drugs and export televisions.”And he continues:” As a nation, they specialize in producing televisions and import drugs even though they could train their television engineers to be chemists.” This television example can be generalized to other examples he gave in the book because results are the same:”efficiency”. The theory proves that frree commerce makes nations efficient and it states that trying to do everything for yourself is actually expensive because it takes time away from those things you reletively do well. Another important point David was claiming that children of both Ed and his workers will be in better conditions after free-trade. Because dream of children was now changing. Instead of dreming to manage his father's factory in the future ,a child was dreming to be a chemist,engineer,pilot and so on so forth. This means,now America was using its most efficient resources: knowledge,know-how,creativeness and internet. The first time Ed gave up being an opposition to David was when he saw his children's(Steven and Susan) businesslife and dailylife succeses after free-trade of America. He could only say that:”I feel totally proud of my children,Dave!” David felt that he started to succeed in but that was not enough. He might also take away Ed to America of 2000, which has adopted protectionalism.It is important to focus on the terms of “tariff” and”quatas”which are related to protectionalism.(“Tariff”is a fee that must be paid by exporters to government whose country is doing the importing. Quatas are also used to restrict trade between countries.)David uses these terms very often in the examples he gave,while he is trying to tell what happened to and what changed in America after Frank Bates who was supporting self-sufficiency has become president of America. In the first sense,eveything was looking perfect. Ed saw that his workers had become able to barrow luxurious cars; Cadillac or Lincoln Continentalls; expensive clothes and they were constructing luxurious houses for themselves. Ed saw that now there were more labourers in his factory; production and sales has increased.But nothing was as it was seen. Anyway, the defense of Ed on protectionalism was always superficial,egoistic and sensitive. So,it was not so difficult to refute his choice.David was making Ed come to face to face with his conscience by the means of his rational and vivacious arguments. Ed was thinking that limitation on export by the means of quatas and tariff was preventing problems and troubles but it was not efficient in long term according to David. He was thinking that the absence of short-term troubles puts quatas on the creation of long-term advantages. David proves that lots of people(television buyers) in America will suffer from protectionalist interferences and a few people(laborers) will benefit from it and also he proves that protectionalism results in go up in both the price of domestic American televisions and importation televisions. David thought that protectionalism was creating inequality and injustice because the wealth of labourers wasn't increasing because of the reason that they produced more qualified televisions. Laborers were stealing from the pockets of television buyers:Because the only reason they earned more was the restriction of competition. In the lack of free-trade, television production becomes more appealing than desiring for being a chemist.As a result, children of labourers don't go schools for special training.So protectionalism also puts a quato on the desire for education and intellect. David also shows the negative effects of protectionalism in tourism life(less tourists),social relations(less communication),education in American universities(less foreign students come for education,)in importation commodities(black market) in America. Because tariffs and quatas effect American tourism in a roundabout way. David Ricardo also refutes the arguman of”level playing field”.He thinks that the most important think must be remembered about trade equlibrium is:They are not the “reasons” of economical factors,they are “outcomes”.The presence of tariffs and quatas in trade are not for benefit of America,also there is not a persuasive economical theory proves this. Protectionalism is only benefitical for local producers and self-sufficiency is the road to poverty. Although Ed Johnson doesn't say it openly,he is convinced by the means of David Ricardo's theory “the roundabout way to trade”and via time tunnel. So he makes a choice...When the day come,he throws the previous text which is promoting protectionism and Frank Bates. He makes a speech in a roundabout way promoting free-trade. Frank Bates looses elections. But the reason was not totally depending on the speech of Ed Johnson.It was the vergeance of “the roundabout way to wealth”. WHERE IS THE HEAVEN?- The only unchangable thing . is the “change” itself... As we can remember,the night before going to Los Angles,Ed Johnson couldn't sleep,he got up and started to listen an albume:Frank Sinatra,”Only The Lonely”.He was thinking. Was quata bill limiting all foreign imports was a good idea?Maybe it was good for his television factory,but how was it for the future of America? He was afraid of comig face to face with his consciousness because he was aware that limiting all foreign imports was going to drag America to be a “Only the Lonely” state,I mean, America could never going to be a part of the “universe society”. I think the aim protectionalism has a sensitive and nostalgic character which is not totatly rational. People can not be equal because they are different. People are core of a notion,so notions can not be equal,too. In every notion,resources are limited:raw materials,their people,the abilities of people,how hard people wish to work,their motivation. How can we wait for a society in which the intellect and abilities are distrubuted equally?It is contrary to science and the rational structure of world. Some people are better on doing,creating,dreaming,they have the motivation to earn more. How can any mechanism limit their creativess,dreams?Forcing them to equality,to be same with others,is the actual inequality!The aim of trade policy is not making all people to have the same opportunities but giving them the chance to live their life in a interesting way and giving them the chance for reinforcements,either negative or positive. The communism example in the book is very attractive.Communist societies never motivated their people to work hard,take risk,for creativeness and to be brave entrepreneurs.It is very natural for a clever person to give up working hard when he earns the same with his lazy neighbour! How a good example!This example make me to remember the period in which I made my obligatory internship in TRT. Reporter,cameremans,editors,also news manager were far away from creative ideas. “Risk” was like a foreign term for that kind of despot people. They were not working hard because they were bored and hopeless! Most qualified and hardworking reporter was earning the same with the most lazy one! All of these men were like “desperate houswives”! Is there any reason for such an inefficient institution trying to survive under state control? I think it is time for TRT to be changed to private sector,either by being sold to foreigners(German discipline or Japan miracle would be wonderful!) or Turkish enterpreneurs.!These interpreneurs might update their creativeness,motivation,risk-taking motives,knowledges,and their awareness and (işten çıkarmak)who are not useful for creating efficiency. Lobor force of the people who lack intellectual capacity or motivation may be used in other sectors. People who work hard would earn more,and that would motivate other more.I am sure that they they would shocked and want to change it when they saw the out-of-date technology of TRT which is used for recording,production and editing! State mustn't have the chance to change acute people into idiots under the name of equality or other names as we see in TRT example!Change is inevitable.But protectionalism of state is trying to prevent it. David Ricardo's theory on “comparative advantage”seems very attractive.It is better by specializing in a few things rather than trying to do eveything both for individuals and countries. His arguments on the misconceptions on supply and demand, mistakes in “zero-sum theory”are vey didactive. Also he made me to learn what imports and exports really are and trade deficit was not dangereous. But the most attractive thing was his talks as to the moral case against protectionalism! His against position to quatas and tarrifs are pursuasive and vey important for today's international economic affairs and arguments like local industry protection,qaotas,infant industries or bad-aimed foreigners...Protectionalist attempts are contrary to both Tariff Union Agreement and Kopenhag Criterion. These attemps are creating problems about Turkey's macroeconomic equilibrium. Free-trade creates opportunities for more wealth and a more dynamic world. It encourage people to dream more, to realize more, to gain more, and gives change for catching “the pursuit of happiness” more easily ,to reach the heaven.


Russel D.Roberts, Tercih-Bir Serbest Ticaret ve Korumacılık Öyküsü Professor David N.Balaam-Professor Michael Veseth, Introduction to Political Economy( pages 55-57) (http://en.wikipedia.org/wiki/Russell_Roberts_%28economist%29) (http://economics.gmu.edu/faculty/rroberts.html)
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