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Jewish World Review May 30, 2007 / 13 Sivan, 5767 The Double ‘Thank-You’ Moment By John Stossel http://www.JewishWorldReview.com | Some people hate me because I defend free markets. Once someone accosted me on a New York City street and said, "I hope you die soon." Why the hostility to commerce? What could be more benign than the freedom to trade with whomever you wish? I suspect ignorance about economics leads many to believe that when two people exchange goods and money, one wins and the other loses. If rich capitalists profit, the poor and the weak suffer. That's a myth . How many times have you paid $1 for a cup of coffee and after the clerk said, "thank you," you responded, "thank you "? There's a wealth of economics wisdom in the weird double thank-you moment. Why does it happen? Because you want the coffee more than the buck, and the store wants the buck more than the coffee. Both of you win. Economists have long understood that two people trade because each wants what the other has more than what he already has. In their respective eyes, the things traded are unequal in value. But this means each comes out ahead, having given up something he wants less for something he wants more. It's just not true that one gains and the other loses. If that were the case, the loser wouldn't have traded. It's win-win, or as economists would say, positive-sum. We experience this every time we have that double thank-you moment in a store or restaurant. It doesn't matter that you wish the price of coffee were lower. We want the price of everything to be lower (except the price of what we're selling, whether it's our products or labor). What matters is that you bought the coffee for a buck. The story doesn't change if you buy from someone in another city or another state. It doesn't change even if you buy from someone in another country. That's why I worry when I hear politicians say things like, "I believe in free trade, but it has to be fair trade" [http://tinyurl.com/2lawbm]. That particular quote is from a presidential contender, Mike Huckabee, former governor of Arkansas. "Fair trade" is code for protectionism disguised as retaliation against other countries that may or may not practice protectionism, and it's a bad sign when even Republicans talk about "fair" rather than "free" trade. We should practice free trade no matter what others do. Why? Because freedom is good in itself. If foreign governments want to hurt their citizens, it's no reason for ours to hurt us. People who live in different countries are divided by a political boundary, but boundaries are accidents of history or the results of politicians' arbitrary decisions. Political boundaries are economically irrelevant. When left free, people trade across them as naturally as they do across state lines. Trade is trade. Buyer and seller both benefit. "Thank you." "Thank you ." If you're worried about a trade deficit with, say, China, imagine that China became the 51st state. We'd immediately forget all about that so-called deficit. Who cares if New York runs a trade deficit with Pennsylvania? As Adam Smith wrote, "Nothing . . . can be more absurd than this whole doctrine of the balance of trade." Sheldon Richman expands on these ideas in The Freeman magazine, writing, "In reality, then, there are no imports and exports. There is only what I make and what everyone else makes. ... Few people would want to live just on what they themselves could make." Once we choose trade over self-sufficiency, we're just arguing about how big the free-trade zone should be. Since trade is always mutually beneficial, the answer is: The bigger the free-trade zone the better. Worldwide is best of all. Next week I'll report on the orgy of hand wringing and commerce-hatred fed by media reports of this month's new "record price" of gasoline. By the way, it's not a record. Every weekday JewishWorldReview.com publishes what many in in the media and Washington consider "must-reading". Sign up for the daily JWR update. It's free. Just click here. JUST OUT FROM STOSSEL Myths, Lies and Downright Stupidity: Get Out the Shovel --- Why Everything You Know Is Wrong   Stossel mines his 20/20 segments for often engaging challenges to conventional wisdom, presenting a series of "myths" and then deploying an investigative journalism shovel to unearth "truth." This results in snappy debunkings of alarmism, witch-hunts, satanic ritual abuse prosecutions and marketing hokum like the irradiated-foods panic, homeopathic medicine and the notion that bottled water beats tap. Stossel's libertarian convictions make him particularly fond of exposes of government waste and regulatory fiascoes. Sales help fund JWR. JWR contributor John Stossel is co-anchor of ABC News' "20/20." To comment, please click here. Archives © 2007, by JFS Productions, Inc. Distributed by Creators Syndicate, Inc.

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