Trade comes naturally in the single market

I have always been an advocate and supporter of the single European market in which people, goods, services and capital can move freely around the European Union. After all, it is not difficult to prefer the single market to most all of the other pan-European projects such as the social chapter and the single currency which involve European institutions intervening in markets to set prices. (See https://www.unorgan.com/europe.htm).

But I have recently had cause to pause and reconsider my support for the single market. It has been implemented through each member state passing countless regulations and directives from the central European institutions. Everything from the flavor of sausages to the sizes of servings has been carefully decreed and monitored. This is yet another example of the nanny state- with excessive regulation and micro-management of the way things get done.

I agree with the end that the single market has- trade and mobility free from impediment. But I decry the interventionist means to which this end has been pursued. Trade is a naturally occurring process. The European countries have always traded a lot with each other and other countries where mutual benefit ensued. There is a naturally-occurring incentive to find ways to develop this trade more widely and deeply. So why turn the natural process of trade into a dictatorial process?

The pan-European initiatives are especially unnecessary given the existence of supra-national bodies such as the World Trade Organization (WTO) that also seek free trade. These bodies use clever measures such as automatic reciprocity- as soon as one country opens up a market to one, it becomes open in both directions to all trading entities.

What is more, important impediments to trade (which are structural barriers caused by government interventions) such as access for non-European goods to European markets, excessive agricultural production and nationally-championed bureaucratic business organizations such as airlines and telephone companies have not been resolved by the creation of the single market. Instead, these trade issues have become political arguments, doomed never to be resolved at the level of the European institutions. Only business people looking to trade for mutual benefit can work out settlements to these issues. After all, as the author Dick Francis said, after wars, enemies trade. Why? Because that’s what comes naturally.

As such, the single market was just an excuse for the European socialists to intervene and interfere with naturally-occurring trade activities. It politicized a natural process and, as with all forms of intervention, the institution performed a coordination function that left to its own devices, the market would have performed more cheaply and effectively anyway.

 

Author: Simon Buckingham

What do you think?

To make a comment to the author, send e-mail to simon@unorgan.com