Free markets encourage free societies

Opening up trade with other nations is a powerful first step towards bringing about political and individual freedoms, according to a new study by the Cato Institute.

This influence can come about through commercial communication and the sharing of ideas, exposure to media with political and social content and the development of a politically confident middle class. By dispersing economic power, free markets create space for non-governmental organisations and private-sector alternatives to political leadership. Though free markets cannot guarantee the establishment of free societies, both the evidence and the historical trends indicate that opening up trade can be a powerful force toward that goal.

The most economically open countries today are more than three times more likely to enjoy full political and civil freedoms as those that are relatively closed.

Moreover, those that are closed are nine times more likely to completely suppress civil and political freedom than those that are open.

Given this favourable link between economic and political freedom, the study offers the following foreign policy recommendations:

The United States should open its market to farm and manufactured goods from qualified Middle Eastern and other Muslim countries, as well as push for comprehensive free trade agreements with these nations.

The embargo on Cuba should be lifted, as it has repressed economic opportunities that nurture political freedom.

The Central America Free Trade Agreement should be approved by Congress.

Source: Daniel T. Griswold, Trading Tyranny for Freedom: How Open Markets Till the Soil for Democracy, Cato Institute, January 2004.

For text http://www.freetrade.org/pubs/pas/tpa-026es.html

For more on International (Free Trade Agreements) http://www.ncpa.org/iss/int/

FMF Policy Bulletin\24 February 2004