Expanding Free Trade: An Idea Whose Time Has Come?
The lead article for the year-end issue of the Economist (subscription required) offers a simple recommendation to improve economic prospects in 2013: expand free trade, especially between rich-world countries. The editors argue that the world is less economically integrated than most people realize. Opportunities for another global free-trade agreement are slim. On the other hand, in some regions and especially among the rich-world countries, the time may be right for political change. The Economist outlines three potential trade agreements:
The three big barrier-bashing opportunities are the Trans-Pacific Partnership (TPP), a free-trade agreement that straddles the Pacific; an Atlantic-spanning free-trade deal between America and the European Union; and a true single market in services within Europe. Each of these initiatives has recently moved from the politically fanciful to the just-about plausible, with serious progress possible over the next year or two.
How did these projects become “just-about plausible” at this time and in these regions? The article doesn’t say. And yet recognizing this opportunity — and seizing it — is the essence of political entrepreneurship.
The editors of the Economist are playing the role of “intellectuals” — as Ed and I define them in Madmen, and as Hayek defined them in his 1949 essay, “The Intellectuals and Socialism.” They are the traders and promoters of ideas. And in the case of the Economist, this publication’s origins trace back to the promotion of free trade and a corresponding opposition to the Corn Laws in the 1840s in Britain. It is an impressive history of political entrepreneurship in the marketplace of ideas. (The Corn Laws were repealed in 1846.)
And now, for these modern trade initiatives to go forward, political entrepreneurs must emerge among the madmen in authority.