February 28, 2005

Imagine there’s no countries

By: AFF Editors

I don’t quite remember the first time I actually listened to John Lennon’s “Imagine,” but I was terrified:

Imagine there’s no heaven,
It’s easy if you try,
No hell below us,
Above us only sky,
Imagine all the people
living for today. . .

This is a world stripped of meaning. If we’re all living for today, why would my neighbor not defecate on my lawn? How could I convince the waitress at the Hawk and Dove to bring me my beer? I think this is what Kurtz imagined in Heart of Darkness that evoked his dying words, “The horror. The horror.” This is Satan’s temptation of Christ set to acoustic guitar.

The next verse of Lennon’s song, though, gets even scarier:

Imagine there’s no countries,
It isn’t hard to do,
Nothing to kill or die for,
No religion too,

After my first jaw-dropped study of the lyrics, I started to wonder how many liberals were that extreme, that they would abolish nations and religion if they could do it without a big fight.

Then I learned about Jack Welch. Welch was the CEO of General Electric, and arguably one of the most effective businessmen in recent history. In different circles, he is infamous or exalted for declaring, “Ideally, you’d have every plant you own on a barge.”

It’s a tempting idea. Who wouldn’t rather do business outside the taxing and regulating arm of the Leviathan state? But one needs to wonder how many of the global capitalists wish that national sovereignty would just go away.

I’m not talking about corporations who want their own country and other countries to drop their distorting subsidies and protective tariffs. That is promoting economic freedom and helping the consumer as well as the seller. The problem is with the folks who don’t just want to knock down the walls–they want to erase the lines, too.

Free trade, to the degree it means the right to dispose of your own property as you wish, is a pro-freedom idea. “Free trade,” when it involves international bodies and global regulations, is anti-freedom.

Look at it from the perspective of the multinationals. Selling, buying, and shipping into and out of dozens of nations involves a hodgepodge of rules, regulations, taxes. Things would be much better, and much less money and time would be wasted, if the situation were simpler.

There are two ways to simplify things. You could try to convince as many countries as possible to reduce their regulations and taxes as low as possible. Or, try to universalize the regulations, making them simpler to comply with, however onerous.

In an interesting way, the latter option–global regulation–is preferable to many big businesses. For one, working for “smart regulation” is more painless than convincing governments to mind their own business. More deviously, regulation adds to overhead, which creates a barrier to entry. The biggest guy in any industry might not like taking on a regulatory burden, but he’s willing to do it if the smaller guy also has to carry it–it’s far more likely to crush the little guy.

While the hodgepodge is actually more burdensome than the universal regulation, it has less of the effect of disproportionately hitting the little guy. If the little guy is less global than the big guy, he has to deal less with the mess of every country’s laws and regulations.

And so today, some big businesses are reportedly supporting the Law of the Sea Treaty, which would grant the United Nations authority over our oceans and grant taxing authority to the UN for the first time. On the upside if you do oil exploration around the world, it would “rationalize” the waters.

Free trade done wrong can be seen in Europe and the WTO. Begun as a common market, the European Union now tells Ireland to raise its taxes and Spain to abolish bullfighting. It’s a repeat of what our federal government has done with the Interstate Commerce Clause–using it to justify laws the founding fathers never could have foreseen, such as a federal ban on plastic toy guns that look too realistic.

Should we believe that the WTO, or the UN empowered under the Law of the Sea Treaty, will exercise more restraint than our own federal government?

A simplified global market would have a serious upside–driving down prices and possibly driving up quality and speed, but if its at the price of our national sovereignty, anyone who agrees that looking more like Europe is bad should keep a close eye on how we pursue free trade.

President Bush seems to have it right in most cases, generally pursuing bilateral talks and eschewing the bigger deals. Let’s hope he doesn’t join John Lennon and Jack Welch around the campfire.

Tim Carney is a Phillips Fellow and a free-lance journalist in Washington, D.C.