If it is Free…

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     The advertising industry has long been aware of the magical qualities associated with the word free and has used the word widely in advertising. “Buy one get one free,” “Free with purchase,” “Free samples,” and Totally free” all serve to get the attention of the would-be customer.  In fact, with the exception of freeloader, there are few examples of the use of the word free that are not positive.  Free is so deeply ingrained in our collective psyche that people are disarmed by its usage and are willing to stand in line, fight crowds and apparently spend money in order to get something for nothing.  Oddly, people have not yet figured out that nothing is free.  But beyond advertising, free speech, free press, and free enterprise, as used in our society, also serve to solidify the positive connotations of the word free.


     To cite just one example, free enterprise has proven to be a powerful positive influence on our republic. Free enterprise allows individuals to go into business for themselves and receive the profit or loss from their businesses.  A person may produce anything imaginable without restraint.  By releasing people’s imaginations, free enterprise has allowed the United States to develop and become a world power, unlike any other in history.  But is free truly magical?  Is everything free, good or even desirable?

     Consider free trade for example. Free trade in its simplest terms promises commercial trade without the fetters of borders, tariffs, regulation, and market manipulation.  In short, free trade promises a level playing field where supply and demand coupled with competition determine prices.  Consumer benefit from lower prices, and producers benefit from efficiency of scale, the proverbial win, win.  We have seen this play out in trade agreements such as, the North American Free Trade Agreement (NAFTA) and the European Union.


     Considering just NAFTA for the moment, consumers have seen a reduction in the price of consumer products, but there is more to the story. NAFTA is the result of cooperation between Republicans and Democrats in what is considered a bi-partisan agreement.  NAFTA was signed by Bill Clinton in December 1993 and became law in 1994.  The effects of the new agreement were not immediate, but by the time George W. Bush became president, the negative effects had become apparent in the form of job losses for the United States.  According to the Bureau of Labor statistics, in 2004, 2.8 million manufacturing jobs had been lost, and job losses were continuing at about the rate of 100,000 per year.  The irony of the situation could not help but be noticed, consumers got lower-priced products, but consumer income was less due to the loss of jobs, so they could not buy the new low-cost products.  I would be remiss if I did not point out that free trade proponents would claim that there is no net job losses, but rather the jobs were moved to a foreign country.  While this may be true, it provides little comfort to the unemployed in the United States if that is your concern.  It is apparently not the concern of free trade supporters.  But there is more to free trade than low prices and job losses.


     The European Union (EU) was established in 1999 and became fully functional in 2002. The EU is more than a free trade agreement; it is a hybrid political economic union with supranational powers and intergovernmental decision-making bodies.  The seven governing bodies are the European Council, the Council of the European Union, the European Parliament, the European Commission, the Court of Justice of the European Union, the European Central Bank, and the European Court of Auditors.  While free trade might be an objective of the EU, clearly there is much more to the organization.  It is not within the scope of this article to dissect the seven governmental bodies of the EU, but it should be obvious to any reader that the governmental bodies add significant cost to the EU and could well offset the benefits of free trade, but there is more to it.  It is the supranational powers that have caused people from the member nations to question the EU.  As it turns out, the member nations gave up their sovereignty by joining the EU.  For example, France could through its legal system determine that a refugee is a terrorist risk and decide to deport the refugee.  Based on supranational powers, the EU could overrule France and require that the refugee remain in France.  This has become a sore spot for the citizens of the member nations, as we have seen from the recent vote in Great Britain.


     While some would argue, that the EU is a unique and not purely a free trade agreement, it is important to realize that all trade agreements have the capacity to undermine sovereignty. A provision of the NAFTA agreement required that Mexico cancel Article 27 of its constitution.  Article 27 protected communal Indian land holdings from sale or privatization, and a revolution had been fought to gain this provision.  However, it was seen as a barrier to investment and incompatible to NAFTA, so Article 27 was abolished.  Sovereignty be damned.


     Free traders argue that sovereignty is not all that important and refer to it as nationalism in an effort to demean its supporters. They remind us that we have a global economy and that we must go along in order to get along.  Such arguments are nonsense, of course.  Sovereignty is the very reason for nations to exist.  Lacking sovereignty all nations would cease to exist, but of course, that is what free traders actually want.  Free traders long for a global government, a new world order or a world without borders.  George Bush, Sr. referenced the ”New World Order” in 1991, and on the eve of Operation Desert Storm in Iraq said, “We have before us the opportunity to forge for ourselves and for future generations a new world order – a world where the rule of law, not the rule of the jungle, governs the conduct of nations.”  Of course in the intervening years, “New World Order” has been replaced by the less offensive term “Globalism,” but the end game remains the same.  Free trade is but a stepping stone leading to that end.


     Oddly, I have heard people claim that free trade is a conservative issue.  That claim is false of course, perhaps they are dazzled by the use of the word free, or perhaps they are confusing it with free enterprise.  One thing is for certain, free trade is far from free.


     The power of the word free is best summed up by my friend, Stacie Kopecky, who is inclined to say, “If it is free, I’ll take three.”


     Until next time…