Free markets and free trade

Empirical evidence that free markets make people NICER

Viscount Ridley comments from England:

The “ultimatum game” is a fiendish invention of economists to test people’s selfishness. One player is asked to share a windfall of cash with another player, but the entire windfall is cancelled if the second player rejects the offer. How much should you share? When people from the Machiguenga tribe in Peru were asked to play this game, they behaved selfishly, wanting to share little of the windfall. Not far away, the Achuar in Ecuador were much more generous, offering almost half the money to the other player — which is roughly how people in the developed world react.

What explains the difference? The Machiguenga are largely isolated from the world of markets and commerce. The Achuar are used to buying and selling to and from strangers at markets. The same pattern emerges throughout 15 small-state societies all over the world, in a fascinating study done by the Harvard anthropologist Joe Henrich and his colleagues. The more integrated into the commercial world people are, the more generous they are. As one of the authors, the economist Herb Gintis, summarises the results: “Societies that use markets extensively develop a culture of co-operation, fairness and respect for the individual.”

This would not have surprised Montesquieu, who spoke of “sweet commerce”, or Voltaire, who marvelled at the friendly collaboration of “the Jew, the Mahometan and the Christian” on the floor of the London stock exchange, or Adam Smith, David Ricardo and Richard Cobden, the radical champions of free trade in the early years of the industrial revolution.

Cobden said: “Free trade is God’s diplomacy and there is no other certain way of uniting people in the bonds of peace.” He was right. Recent studies have confirmed that commerce is the main cause of peace. “Within the developing world, economic development leads to interstate peace, whereas democracy does not,” concludes Faruk Ekmekci of Ipek University in Turkey. The evidence is overwhelming that markets do not just make people richer, they make people nicer too, less likely to fight and more likely to help each other.

So why on earth has it become accepted wisdom that every move towards free markets and free trade is towards selfishness, conflict and greed, whereas the state is the source of all kindness? When Daniel Hannan launched the Institute for Free Trade at the Foreign Office last week it was attacked by critics as an inappropriately “hard Brexit” initiative, even though free trade has been the British government’s ambition on and off since 1846. As Liam Fox put it at the launch: “Long before Brexit and long before the EU, the United Kingdom was the champion of global free trade.”

Hannan’s critics, such as the misleadingly named campaign Open Britain, imply that free trade is unkind in another way: it leads to lower standards of welfare provision, but this is demonstrably nonsense. Is welfare worse in free-trading New Zealand or protectionist Venezuela? In South or North Korea? In Singapore or Burma? The correlation between free trade and high living standards, including high welfare standards, is tight and causal. Government intervention in social policy goes hand in hand with economic development.

The astonishing enrichment of the world in the past 50 years, when extreme poverty has fallen from more than 50 per cent to below 10 per cent of the world population, could not have happened without free commerce and the innovation it delivers. No serious economist denies this. The liberalisation of world trade since the Second World War has been responsible for making the world not just wealthier but healthier, happier and kinder too. If that sounds incredible to millennials, then perhaps they should ask their professors to give them some less Marx-inspired reading matter.

Ah yes, say Remainers, but look at the Bombardier case. With the help of mercantilist American regulations, big Boeing bullies a rival Canadian aircraft manufacturer with a vital plant in Belfast, reminding us that we need to stay in the European Union so that we can resist such tactics. There are four problems with this argument: first, we are in the EU now; second, being inside the EU has not shielded Airbus from similar disputes with Boeing; third, Britain with its strong defence links to America can lean on America more than Brussels; and fourth and most convincingly, small countries have outperformed big ones in world trade. Look at New Zealand, Iceland, Singapore and Switzerland.

Remember that the EU and the US have been discussing a free-trade agreement for a third of a century. It always falls foul of protectionist interests on both sides: Italian textiles, French films, American aircraft. Outside the EU, Britain, the least protectionist of all major economies, would long ago have done a bilateral deal with America and made illegal the imposition of unilateral tariffs on manufactured goods.

The Bombardier case shows that the old approach to anti-dumping does not work in a world of integrated international supply chains, where the effects could be spread all over the globe, damaging consumers all along the way. It does nothing to justify trade blocs, but underlines the need to revive the impetus towards world free trade, which is stalling. According to the OECD, the G20 countries were running about 300 non-tariff barriers in 2010. Five years later that number had quadrupled.

As for domestic politics, the champions of markets and enterprise need to recapture the radicalism of Cobden, Ricardo and Smith. Somehow in recent years we have let the authoritarians redefine free commerce as a regressive step, oppressive on the workers, yet free trade creates jobs and raises wages. It is the most radical and liberating idea ever conceived: that people should be free to exchange goods and services with each other as they please, whether they live in different villages, cities or countries, and without governments being able to stop them.

The Conservatives cannot compete with Labour by offering pale imitations of its patronising paternalism. They should offer the young something more revolutionary, liberating, egalitarian, disruptive, co-operative and democratic than stale statism. It’s called freedom.

SOURCE

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Universal Coverage? My Fourth Health Care Plan Just Died Thanks to Obamacare

Michelle Malkin

Two weeks ago, my husband and I received yet another cancellation notice for our private, individual health insurance coverage. It’s our fourth Obamacare-induced obituary in four years.

Our first death notice, from Anthem Blue Cross and Blue Shield, arrived in the fall of 2013. The insurer informed us that because of “changes from health care reform (also called the Affordable Care Act or ACA),” our plan no longer met the federal government’s requirements.

Never mind our needs and desires as consumers who were quite satisfied with a high-deductible preferred provider organization that included a wide network of doctors for ourselves and our two children.

Our second death knell, from Rocky Mountain Health Plans, tolled in August 2015. That notice signaled the end of a plan we didn’t want in the first place that didn’t cover our kids’ dental care and wasn’t accepted at our local urgent care clinic.

The insurer pulled out of the individual market in all but one county in Colorado, following the complete withdrawal from that sector by Humana and UnitedHealthcare.

Our third “notice of plan discontinuation,” again from Anthem, informed us that the insurer would “no longer offer your current health plan in the state of Colorado” in August 2016.

With fewer and fewer choices as know-it-all Obamacare bureaucrats decimated the individual market here and across the country, we enrolled in a high-deductible Bronze HSA EPO (Health Savings Account Exclusive Provider Organization) offered by Minneapolis-based startup Bright Health.

Now, here we are barely a year later: Deja screwed times four. Our current plan will be discontinued on Jan. 1, 2018.

“But don’t worry,” Bright Health’s eulogy writer chirped, “we have similar plans to address your needs.”

Riiiiight. Where have I heard those pie-in-the-sky promises before? Oh, yeah. Straight out of the socialized medicine Trojan horse’s mouth.

“If you like your doctor,” President Barack Obama promised, “you will be able to keep your doctor. Period. If you like your health care plan, you’ll be able to keep your health care plan. Period. No one will take it away. No matter what.”

Is pathological lying covered under the Affordable Care Act?

Speaking of Affordable Care Act whoppers, so much for “affordable.” Our current deductible is $6,550 per person—$13,100 for our family of four. Assuming we can find a new plan at the bottom of the individual market barrel, our current monthly premium, $944.86, will rise to more than $1,300 a month.

“What’s taking place is a market correction; the free market is at work,” says Colorado’s state insurance commissioner, Marguerite Salazar. “[T]his could be an indication that there were too many options for the market to support.”

This presumptuous central planner called federal intervention to eliminate “too many” options for consumers the free market at work. Yes, friends, the Rocky Mountain High is real.

This isn’t a “market correction.” It’s a government catastrophe.

Premiums for individual health plans in Virginia are set to skyrocket nearly 60 percent in 2018. In New Hampshire, those rates will rise 52 percent.

In South Carolina, individual market consumers will face an average 31.3 percent hike. In Tennessee, they’ll see rates jump between 20-40 percent.

Private, flexible preferred provider organizations for self-sufficient, self-employed people are vanishing by design. The social-engineered future—healthy, full-paying consumers being herded into government-run Obamacare exchanges and severely regulated regional health maintenance organizations—is a bipartisan big government health bureaucracy’s dream come true.

These choice-wreckers had the arrogant audacity to denigrate our pre-Obamacare plans as “substandard” (Obama), “crappy” (MSNBC big mouth Ed Schultz), and “junk policies” (Sen. Tom Harkin, D-Iowa).

When I first called attention to the cancellation notice tsunami in 2013, liberal Mother Jones magazine sneered that the phenomenon was “phony.” And they’re still denying the Obamacare death spiral. Liberal Vox Media recently called the crisis “a lie.”

I don’t have enough four-letter words for these propagandists. There are an estimated 450,000 consumers like us in Colorado and 17 million of us nationwide—small business owners, independent contractors, and others who don’t get their plans through group coverage, big companies, or government employers.

The costs, headaches, and disruption in our lives caused by Obamacare’s meddling meddlers are real and massive.

But we’re puzzles to corporate media journalists who’ve never had to meet a payroll and don’t even know what is the individual market.

We’re invisible to late night TV clowns who get their Obamacare-at-all-costs talking points from Sen. Chuck Schumer, D-N.Y.

We’re pariahs to social justice health care activists and Democrats who want us to just shut up and subsidize everyone else’s insurance.

And we’re expendables to establishment Republicans who hoovered up campaign donations on the empty promise to repeal Obamacare—and now consider amnesty for immigrants here illegally and gun control higher legislative priorities than keeping their damned word.

We’re the canaries in the Obamacare coal mine. Ignore us at your peril, America. You’re next.

SOURCE

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For more blog postings from me, see  TONGUE-TIED, EDUCATION WATCH INTERNATIONAL, GREENIE WATCH,  POLITICAL CORRECTNESS WATCH, AUSTRALIAN POLITICS, and Paralipomena (Occasionally updated),  a Coral reef compendium and an IQ compendium. (Both updated as news items come in).  GUN WATCH is now mainly put together by Dean Weingarten. I also put up occasional updates on my Personal blog and each day I gather together my most substantial current writings on THE PSYCHOLOGIST.

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