Two thoughts on trade

Tariffs and subsidies have one thing in common. They need to be dropped.

Unilateral dropping of tariffs is in India’s interests, argues Sauvik Chakraverti. It is unrealistic to believe that the Indian government will yield on this one. Sauvik has a bold prescription:

Fifteen years of ‘liberalization’ have convinced Indians of the need for free markets. Those who want free trade are upset that WTO talks are stuck. They have long endured protectionism at the hands of the Indian state. To these people, my message is: don’t expect free trade as a result of government initiative. The government will only try to sell favors and Indian businessmen are notorious favor-seekers. Call for free trade as a removal of all state interference in the global market. That is, call for unilateral free trade. The rest will fail to follow at their own peril. [TCS]

Russell Roberts points to an article by Pete Geddes and an old op-ed by George Will, on subsidies and government intevention.

When we subsidize things that trade in the market, we benefit the well off and well organized at the expense of the most vulnerable members of society. This holds true whether in Bozeman, Boston, or Birmingham. Princeton Ph.D. George Will said it well: “The world is divided between those who do and do not understand that activist, interventionist, regulating, subsidizing government is generally a servant of the strong and entrenched against the weak and aspiring.”[Pete Geddes/FREE]

The world is divided into two kinds of people, those who want to prosper by competing and those who want to prosper by getting government to cripple their competitors.[George Will/Cafe Hayek]

And the UPA government just chickened out on its bid to cut food subsidies.

2 thoughts on “Two thoughts on trade”

  1. With regards to food subsidies, this time Congress I apologists don’t have commies to beat up on for their own do-nothing policies for almost two years after coming to power – except of course spending more money on mega social projects that achieve little.

  2. Tarrifs and subsidies have one thing in common. Once taken out, you cant re-introduce them. Therefore before removing them, we need to adequately safegaurd the poorer sections. I think ultimately what is right is what is good for India’s poorest and most oppressed. Everything else is plain wrong.


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