Freeing trade
I recently acquired a bag of Cuban coffee beans. In case the Trump administration wants to make trouble over this, I found it on the street, and I’m not changing my story. Nevertheless, and with the understanding that I’m not an expert, I have to say that whatever the soil of that island provides, it’s great for plants, um, for coffee. All rights, yes, it’s also good for cigars.
As I said, Cuban soil makes great coffee. To my taste, it’s as good as Kona, and that’s my current favorite. Now the flavor may be the result of the roasting and other factors that have nothing to do with where it was grown, but that doesn’t matter for the point I’m going to make here. Whatever makes that bag of beans so good, I want more.
In other words, it’s time for the embargo to end. Not just to provide a tasty delivery method for caffeine, one of the essential food groups (the others being sugar, fat, and alcohol), and I’ll get to the important policy reason in a moment, but also because of the insanity of what we’re doing at present.
We’ve tried to cut Cuba off from the rest of the world for decades, and it’s resulted in many harms to the people of that island, while doing nothing to remove the Castros or the dictatorship. Surely by this time, more than five decades after the Cuban Missile Crisis, we’ve sufficiently punished the island for whatever offenses we hold against them. And we’re still holding on to Guantanamo Bay. We also haven’t accounted for the effects of our support of Batista and the previous dictatorship.
What is the answer? As suggested above, I’m a supporter of free trade. I’m a reluctant, uncomfortable supporter, but I still believe that liberalizing trade policy is good for the world — with qualifications.
One piece of evidence is provided by statistician and physician, Hans Rosling. His analysis of income distribution over time shows a gradual trend from the middle of the twentieth century when most of the world’s population was concentrated around the dollar a day level, while a handful of countries were well off to a bell shaped curve with the peak at some ten dollars a day in recent years. This doesn’t mean that we’ve solved the problem of poverty around the globe, but things are going the right way.
Nor does it mean that people aren’t being left behind. And this is where we have to take the costs of free trade into account. Without barriers, jobs will go where they cost producers the least. Shirts get made in Bangladesh, for example. When the wages for those jobs are higher than what existed before the manufacturers arrived, the result is a rising average income for the population, at least for a while. Higher incomes lead to more consumption, and if the corporations are allowed to manage things on their own, the temptation is ever present to turn things into a company town in which the workers are essentially slaves.
And we also have to be concerned about the environmental effects of trade. The more goods are moved, the more energy must be consumed to do the transportation, the manufacture, the use, and the disposal. This illustrates one of the potential good points about liberal trade policy. As Gretchen Bakke discusses in her book, The Grid, renewable energy generation and storage is within reach. The countries that will lead in the twenty-first century will be the ones that are selling the new technologies in that field to the rest. Trump’s pushing of coal would seem like a conscious choice to surrender to China if it weren’t for his incompetence making it more likely that he’s just blundering.
China is a good challenge to the benefits of free trade. The government there has stalled the movement for democracy that has arisen after the improvements in standards of living, but it remains to be seen how long capitalism can tolerate authoritarian rule there. But the essential tenet of liberalizing trade policy in terms of general freedom is that when people around the world interact with each other, bad ideas have a harder time surviving, and bad leaders lose control over their populations. And this is the humanitarian reason for more trade with Cuba.
To make free trade work, the key requirement, though, is that wealthy people who benefit directly from such policies have to pay for them. If they want trade to flow without impediments, they’re going to have to take care of the people whose jobs are a part of that current. As the populism that supported Bernie Sanders and swept Donald Trump into office shows, the people of America are in no mood to be left behind. Trump is exploiting that sentiment for his own ends, but if we continue the short-sighted choice to make wealthy people ever richer, political control could easily swing hard to the left.
America avoided communism in the 30s, thanks to Roosevelt’s reforms. If today we pay for free trade through income taxes — especially if we emphasize education, thereby allowing workers to climb the ladder to higher-level jobs — we can remain open to the world. And we can encourage other nations to open up, including Cuba with their delicious coffee.
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