To me, one of the greatest expressions of freewill is trade. I agree to buy something at a given price, and you choose to sell it to me. (Clearly I am ignoring the tax component of the price, for tax is an expression of someone else’s will). As long as the transaction and the rights of both the buyer and seller are guaranteed in law, there really is not much need for any more detail. Why complicate matters? Regulation is costly, encourages gaming, and favours the very large corporations, and is profoundly anti-competitive.
The European Union’s rule book, the AcquisCommunitaire, runs to some 30,000 separate legislative acts, and covers all kinds of regulation, on financial instruments, advertising, medical products, agricultural produce, accountancy, and so on. To be compliant costs money. To understand and implement the rules necessitates lawyers and accountants as well as in-house personnel. All of the money spent on these people and their procedures is a dead-weight loss to the economy, as none generate wealth.
The bigger the book of rules, the more loopholes are created. As an example I will use the EU-wide system designed to reduce Greenhouse Gas emissions, I wrote about it here, and the reader can easily see how the system, however well-intended it was, has been taken advantage of (in one isolated case) to the tune of €40 odd billion, and encouraged a vast ramp-up in ozone-depleting CFC production. All you need is a good accountant and a lawyer to find your way around the rules (which is also a very strong argument for flat tax). The loser will always be the less well off.
Nick Clegg spoke of how the motor manufacturing industry was in favour of EU membership, and the Liberal Democrat MEP Catherine Bearder was quick to repeat the love for it that the CEO of GKN has in my local paper, where they are the single largest private employer. But this should be no surprise. Only the large and wealthy (some might say monopolistic) corporations can afford the legal and accountancy fees, the cost of lobbying, and even the cost of the occasional fine that goes hand-in-hand with Club Membership. It is not in the interest of GKN etc. to have fewer regulations, because that would allow in smaller companies whose presence would drive down costs and inject efficiencies. In short, these companies fear competition, and welcome as many barriers to entry as possible. The prize that the larger corporations get once the country has signed up is the ability to shape policy, and policy direction will always point towards their own self-interests (something that Clegg called ‘clout’ but I call corruption). This rampant market-abuse must be stamped out.
The UKIP solution is an oddity. It wants to leave this one club and join another, be it EFTA or the EEA. UKIP want to strike Free Trade Agreements all over the place, with China, India, the Commonwealth, Brazil, and so on and so on. Why? Each new club will come with a rule book and create precisely the same problems as the EU. And no Free Trade Agreement is ever what its name claims. All FTAs come with rules, costs and conditions, and can never be accurately be described as ‘free’. In fact, FTAs will simply create the same anti-competitive economic environment as the EU does right now.
For free trade to exist you need an open marketplace as possible that offers price and product discovery, and a legal framework that upholds the contract. An understanding between countries for sanctions against any counterparty that fails to deliver as per contractually agreed is all that is required. If my rubber ducks do not float, then China gets me my money back from the factory owner. No need for a thousand page document defining what a rubber duck is. No need for the definition of rubber duck to effectively exclude the Indian rubber ducks. And if my rubber duck hurts me, the factory owner goes to prison, and he will not do it again, because it is worth more to him to stay free and sell me more rubber ducks.
So why do UKIP bang on about EFTA, EEA, and all the FTAs they will sign? Either because they are not true Libertarians, or have not really thought about what free trade really means, or, more likely, they do so to sound like they have a Plan B.
Photo by CHRISTOPHER DOMBRES