Did the importance of policy, regulation, and finance as supports for successful trade change at some point?
Trade has always required, and always will require, capital, which is why the Dutch were able to control it for much of the seventeenth and eighteenth centuries, and why global trade volume has suffered a steep decline in the past year. The essence of free trade is the very absence of regulation. Unfortunately, as we’ve already seen, free trade always produces losers, who must of necessity be bought off, lest they clog up the works. As John Stuart Mill first pointed out, and as Paul Samuelson and Wolfgang Stolper have reiterated, the benefits of free trade will always be sufficient to “bribe the suffering factor.” As a practical matter, free trade is joined at the hip with a generous social welfare system. When a worker loses his or her job to a better and/or cheaper foreign product, he or she not only deserves retraining, but should also not lose their health care coverage and all their income. Reasonable people can argue over the ethics of a generous social welfare policy, but there’
