Can There Be Free Trade in a Mixed Economy?
To the Editor: Although I don’t see any flaws in your arguments about the theory of free trade in your column for the April 2004 issue of The Freeman, you should at least acknowledge the distortions in most any nation’s economy because of government intervention and direction. Because of that government involvement, I question whether we really can have free trade in the world today. Just because jobs move to other countries where tasks can be done more cheaply than in this country does not necessarily mean that it’s because of the working of the free market. In fact, that is certainly not the case. Most, if not all, countries subsidize their industries so that they can compete with American companies or, in some cases, overtake and replace them. . . . For example, Japan set up national industrial policies to subsidize their electronics and steel industries specifically so they could overtake the U.S.’s. . . . [T]hat’s also why Japan’s economy has been stagnant for the past ten or so y
