Wednesday, October 19, 2016

"The Money" or "The Citizens"? The Results in France

History matters, quite a bit, while discussing "free trade" and its effects.

...France and Britain were longtime rivals and both countries were committed to Mercantilism, yet they struck one of the first “free trade “deals or at least the first deal premised on philosophy of free trade. Even today, many free market types will argue that trade can overcome even the bitterest of rivalries. People like making money more than they like making trouble, so the theory goes. This trade deal is proof of that.

The most notable part of the deal is that it was a disaster for France. Soon after the deal was signed, there was a flood of British manufactured goods into France. Importation of British goods doubled. This put enormous pressure on the already distressed French industries, setting off riots and revolts. Naturally, this put pressure on the already strained relations between the provinces and the crown. Most historians count the Eden Treaty as one of the contributing factors leading up to the French Revolution.

What the French government did not understand when negotiating the treaty is that trade is not a static thing. Even if the French could vastly increase their sale of wine and linens to Britain, in order to offset the import of British manufactured goods, there would still be significant economic dislocation in the French economy. The wine merchants would be happy, but the French cotton mills in Normandy would be devastated, which is why riots broke out there soon after the deal was implemented.

Trade between nations can be a very good thing for both nations. It can be a terrible thing too. It’s not always easy to know in advance....

(You really should read all of the linked essay, which has lots of other useful information!)

Umnnnhhhh, yah.  When one of the effects is a revolution, well,....

Last week, another pundit (regrets--I forget which one) noted that 'economics' must be governed by 'politics,'--not the other way around.  IOW, while Gummints can make all sorts of trade deals on behalf of their moneyed-interest friends, demolishing the livelihoods of vast numbers of citizens is NOT in the country's best interests.  Or, as the Froggy King found out, not in the best interests of the regnant rulers.

We would not, of course, suggest that the guillotine is a remedy.


1 comment:

Anonymous said...

Trade deals are only part of the part of Hillary Clinton's plan.
Say good buy to the 401K and Individual IRA

Hillary Clinton’s Ally Hopes for Wall Street ‘Obamacare’ of Americans’ $25 Trillion Retirement Kitty