If You're Anti-Free Trade, You've Never Lived Without It

"What is harmful or disastrous to an individual must be equally harmful or disastrous to the collection of individuals that make up a nation." - Henry Hazlitt, Economics In One Lesson

At the recent SALT Conference in Las Vegas, Michael Novogratz, the president of Fortress Investment Group, opened up his wide-ranging presentation with mention of his 76-year old mother. Novogratz talked about how she has never in her life paid retail. Even the mothers of billionaires search for bargains.

This likely wasn't Novogratz's intent, but he provided conference attendees with one of the better (but not best) endorsements of totally open borders to trade, and a strong endorsement of the Trans-Pacific Partnership (TPP). The purpose of our work is to exchange the fruits of our labor for what we don't have, and our production is tautologically our demand. One of the exciting aspects of free trade that Novogratz alluded to is that when our borders are fully open to the world's plenty, it means we have the most talented people in the world vying to serve our needs. Even better, those same talented people are competing with one another to give us the best deal. Those who love bargains intuitively love free trade.

Thinking about the Hazlitt quote that begins this piece, an economy is not a blob with a life of its own. An economy is just a collection of individuals. Those individuals who comprise the U.S. or any economy generally receive a paycheck in return for their work, and free trade logically enhances the buying power of those checks. In a free market, monopoly profits are gradually competed away thanks to the arrival of new entrants. Open borders naturally speed up the process whereby the greatest number of globally talented producers strive mightily to serve us at the lowest prices possible.

This is important because contrary to what you hear from Keynesian thinkers, savings are not only good for the individual, but also for the economy itself. We're told in economics classes that the economy will collapse if we're not constantly spending, but such fraudulent thinking is exposed as silly when applied to the individual. As individuals we know intuitively that a life without savings is brutal and scary. We know that it means we're one missed paycheck away from having to rely on the kindness of strangers, and a lost job away from the soul-destroying (J.K. Rowling) act of going on the dole. Worse, a lack of savings deprives us of long-term financial security. For lowering prices, free trade enhances the possibility that we'll be able to save more.

Notably, the savings we get to amass are very good for economic growth. Lest we forget, there are no entrepreneurs and the opportunities their genius creates without savings. Someone, somewhere has to delay consumption so that entrepreneurs can turn their visions into tangible realities. Absent savings, we'd still live in caves. Not only does free trade enhance the value of every paycheck we bank, but the savings made possible by trade are a form of capital for the commercial ideas that power us into the future.

Naysayers will argue that free trade destroys jobs, but then so does all economic progress. This is a happy development. If jobs are or were the sole purpose of economic activity, then the logical next step beyond closing our borders to foreign goods would be to abolish the car, the tractor, the ATM machine and the internet. All four were massive job destroyers, but as evidenced by the fact that we're not in breadlines as a result of their proliferation, economic advances that destroy jobs don't erase work; rather they reorient investment to new forms of commerce that simply change the nature of our work. This is good. Indeed, not much more than 100 years ago most Americans worked on farms. Thank goodness for the economic progress that free trade speeds up. How skillful and productive would most of us be with the backhoe?

All of which brings us to the least sung, but easily best endorsement of open borders to trade. The latter maximizes the possibility that we get to do the work that most animates our individual talents. Think about that for a second. An economy is once again just a collection of individuals, and free trade maximizes the possibility that we'll get to do the work that most accentuates what we individually do best.

If the above isn't properly understood, imagine a life that is the norm in much of the world whereby our daily work were solely directed at survival as opposed to building on our talents? What a cruel life. In the U.S. some become financiers, yoga instructors and film directors, while others pursue careers as chefs, accountants, and technology entrepreneurs. So rich and free trading is our economy that we have choices. As opposed to spending our lives surviving, we're able to focus on what we're best at.  Survival is a given. Figure more than a few Americans support themselves in a spare way (by American standards) such that they can devote the lion's share of their time to luxurious pursuits such as skiing. Readers may ask themselves how many ski bums hail from Myanmar, Peru and Zimbabwe.

Importantly, our varied lives are made possible by free trade. If you're reading this column you know exactly why, at least unwittingly. Figure the computer that you're reading this love letter to free trade on is arguably the biggest job destroyer in world history. The clothes you wear, the food you eat and apartment, house or office you're sitting in as you read this column are available in plentiful fashion thanks to a global division of labor that wildly increased individual productivity. Your ability to have time to hate this column and to send me an e-mail about your dislike is also the result of free trade.

If all of this is doubted, imagine what your life would be like if you had to provide for the computer you're reading on, raise the food you eat, sew the clothes you wear, and build the structure that you live in. Most of you would die an unemployed, emaciated, unclothed and unsheltered death. Thanks to free trade, however, you don't need to concentrate on what you're bad at. Instead, you can trade the fruits of your labor for all the consumer goods that you don't know how to make.

Readers should think about this in light of the looming TPP vote. Free trade is about bargains, consumer choice and career choice. Life would be grim without it. Life will be better with more of it. The TPP is a no-brainer.