Friedman's Free Trade Environmentalism Paradox

November 13, 2008 11:59 AM

Does Thomas Friedman actually believe that Free Trade and Environmentalism can coexist? Or are they mutually exclusive beliefs of his? And if so is there a theory behind it?

I always assumed they were inherently incompatible, seeing as it forces countries to not put environmental restrictions on the goods they import. He seems to advocate both free trade and environmentalism very heavily, and I wasn't able to find much criticism of him for this in a cursory search.

posted by destro to law & government (12 comments total)

I would imagine, without doing any independent research, that it would require a free trade regime only between countries which have done a good job at imposing most of the (environmental) externalities created by the production and manufacture of their goods before they leave their manufactured country, possibly through cap-and-trade schemes negotiated as part of the free trade treaty itself.
posted by JakeWalker at 12:08 PM on November 13, 2008 [1 favorite]

Given the assumptions of perfect information, zero transaction costs, no externalities, etc., it seems to me that free trade (in its true academic sense, and not the bizarre version that politicians talk about) and environmentalism must coexist.

The problem is that when people these days say "free trade," they don't seem to have any idea what they're talking about. It does not (or should not) mean "unregulated trade" or "unbridled trade." The assumptions are the whole point of economics (or of Coase et al.), and if you take that into account, measured and rational environmentalism is a natural result of true free trade.

Now, as for what Friedman believes, I really cannot say. He apparently thinks that all cars should be hybrids, so the chances of him thinking rationally about either free trade or environmentalism are slim to none.
posted by The World Famous at 12:18 PM on November 13, 2008

JakeWalker; Yeah, I could see him saying that. Although it's very utopian since very few countries have stringent enough environmental regulations that would make that viable, and I'd have a hard time trying to defend that belief.
posted by destro at 12:22 PM on November 13, 2008

World Famous: What should Free Trade refer to then?
posted by destro at 12:23 PM on November 13, 2008

If you mean "environmentalism" as responsible stewardship of the environment, then there is no fundamental incompatibility with mostly laissez-faire trade across borders and between populations. If you mean "Environmentalism" as the sort of religiosity with which some people view lifestyle and government mandates that may or may not actually produce measurable environmental benefits, then that conflicts with virtually any conceivable trade policy. I also agree with the aforementioned point that Friedman's free trade doesn't match up with the way many other people read the term.
posted by Inspector.Gadget at 12:28 PM on November 13, 2008

The problem with the justifications for free trade and deregulation is that they're based on the idea that everyone's a rational utility-maximizer, which really isn't the case. For environmental protection, you need a combination of:
A] Natural resources to be unexploitable or unpollutable due to technological limitations
B] Laws with various punishments to legally prevent environmental degradation
C] Or there need to be societal norms and values where it is recognized that degrading natural resources isn't in people's best interest: People's perceived utility needs to line up with what's actually a good idea in the long run.

What the big problem is is that people are currently not good at being utility maximizers: What they do is based one what sounds good three hours, a week, maybe five years ahead. Slash-and-burn farmers are worried about eating next year, and can you blame them? The rich, who generally also shape policy, are the ones who have the greatest buffer between their actions and their negative effects through environmental degradation.

But yes, there's a real cognitive dissonance between free trade and environmentalism. I don't see the free hand of capitalism creating 'incentives' to protect the environment, because it's about profit- and the things that are profitable don't line up often with what's sustainable, especially in a consumerist culture.
posted by dunkadunc at 12:38 PM on November 13, 2008

"I'm here to talk out of two sides of my mouth...to conservatives from center right to Rush Limbaugh, I say I've got a plan to make America stronger.' To greens and liberals, I say 'I've got plan to take care of climate change, biodiversity loss, petro-dictatorship—and in the process it's going to make us respected, more entrepreneurial, make our capitalist systems work better." ('The Bright Side', New Yorker, Nov 10, 2008)

Note elsewhere in the article he describes himself as a progressive saying "I believe in free markets and in social welfare and I believe that only if you have a free market will you have the economic growth you need to have social safety nets to take care of people brutalized in the market place" so I'm not sure it's fair to describe him just as a believer in free trade. He also believes in tax breaks for alternative energy and as far as I can tell his plan is to unleash American entrepreneurship on environmental problems driven by government action in the form of tax breaks etc.
posted by tallus at 12:44 PM on November 13, 2008 [1 favorite]

I'm not sure it's fair to describe him just as a believer in free trade

It's fair.
posted by nicwolff at 12:47 PM on November 13, 2008 [1 favorite]

The problem with the justifications for free trade and deregulation is that they're based on the idea that everyone's a rational utility-maximizer, which really isn't the case.

Plenty of people also believe in free trade for moral reasons, not just because it is the most economically sound system.
posted by travis08 at 1:30 PM on November 13, 2008

what's actually a good idea in the long run.

The thing that a free market does is allow everybody to decide what is 'good' instead of a handful of activists, bureaucrats and politicians.

People act in (what they believe to be) their best interests, all of the time. They usually do not act in the way you wish they would and that is why Environmentalists use Congress and the courts to dictate to the rest of the country.

If enough people in this country will only purchase goods from countries that have rigid environmental controls then more countries will implement such laws. But then you have to provide people with solid reasons for such behavior and get them to agree and dealing with 300 million people is so much harder than convincing one judge.

And by 'you' I mean whomever wants to circumvent free trade.
posted by trinity8-director at 3:35 PM on November 13, 2008

There would certainly appear to be potential for some positive environmental outputs if many more economic externaliites were absorbed into the market. that is, if you make something, you have to pay for the full costs of doing so, because effectively if you don't do this then effectively you are taking something away from the rest of society which will have costs for them both economically and otherwise, for example, through additional health costs, clean up costs and many other area where mitigation of someone else's mess has an impact on others. Could such a definition be encapsulated by the term 'free trade'? This would require regulation to enforce but this can be seen as effectively enforcement of protection of common property from the acts of individuals or commercial entities, but then no-one would support not having regulation which protects property rights would they?
posted by biffa at 3:05 AM on November 14, 2008

RE: Ask MetaFilter Follow-up

I'm not sure the question was fully answered, as I was hoping someone might know Friedman's beliefs, not opinions on free trade, although there were some helpful and reasonable attempts at what Free Trade Environmentalism might be from JakeWalker and biffa.

It might be that Friedman hasn't actually thought out his response either and there may not be a sufficient answer to this question at all.
posted by destro at 6:56 AM on December 15, 2008