Leonard Gomes. The Economics and Ideology of Free Trade.
Billed as a former Reader in International Economics at Middlesex University, Leonard Gomes is a niche scholar par excellence, his previous books mostly being about the historical aspects of international trade theory. This book is in the same vein, but with an impressive grand sweep of post-mercantilist thought which brings the debates more or less up to date. In the process he traverses much of the ground covered in his earlier book, Foreign Trade and the National Economy, but the result is a valuably integrated historical analysis of trade thinking from early 'absolute advantage' to contemporary 'new international trade' theorists who have finally acknowledged the importance of increasing returns and imperfect competition.
The very title of Gomes's book may puzzle, even dismay, many economists and all Free Trade ideologues who believe that the benefits of Free Trade are now scientifically proven fact, so that the Free Trade idea is 'truth' not ideology. But one of the main merits of this book is that, though a largely mainstream economic historian, Gomes clearly acknowledges the ideological side of the debate and analyses it accordingly. His approach is, therefore, admirably even-handed while also endeavouring to reach conclusions where possible.
Gomes's acknowledgement of ideology determines the structure of his book, which is in two parts, the first analysing debates about the economics of free trade and the second covering what he lists as 'rhetoric, events, policies and ideology', beginning with the Corn Law repeal debate in Britain. The latter part will be the more interesting for the layperson, to whom the whole book is nevertheless reasonably accessible.
However, both parts of the book are broadly historical and sequential, with Keynesian views, for instance, slotting into chapter 8 on the first era of globalisation. The final chapter looks broadly at contemporary globalisation debates and particular issues such as gains from trade and inequality issues. He concludes, analytically but mildly, that free trade probably has overall benefits along with some inequality and other costs.
Gomes's scholarly survey will satisfy the critical academic and even most Free Traders, who will probably say he merely tends to overstate the criticisms of their doctrine. But it will not satisfy more radical critics or anti-globalisation activists, and indeed Gomes could have gone further.
There is gradually accumulating evidence that free trade is not what it is cracked up to be. Much documentary evidence now suggests, for instance, that trade liberalisation was not a late nineteenth century boon, that the Great Depression caused protectionism rather than the reverse (as many bullish globalists still insist) and that global free trade would have mixed and modest benefits at best.
Gomes picks up some of this evidence but not all. He does cite work such as that of McCloskey and Bairoch, which showed nineteenth century free trade to be apparently inimical to growth, though he also quotes critics who deny that this means that protection caused growth. But he does not analyse this debate adequately, for Bairoch gives reasons why free trade clearly hurt European agriculture and protection stimulated industry, as well as showing, remarkably, that protectionist periods saw increased trade. This possibly confirms Keynes's (heretical) view that protection can boost employment, income and trade, thus improving the world economy in a catalytic way.
Also, Gomes's theoretical survey focuses largely on mainstream schools, whereas some heterodox schools are now having some interesting things to say. Post Keynesians and others, for instance, are exploring the far-reaching notion that with capital mobility trade occurs on a traditional Smithian 'absolute advantage' basis after all, not 'comparative advantage', and if true this could greatly reduce the importance of trade. Nor does Gomes appear to grasp the extent to which Krugmanite 'new trade theorists' draw on Post Keynesians such as Kaldor or Joan Robinson for their 'imperfect competition' theories, the latter pair reaching much more free-trade-unfriendly conclusions.
I have expanded some of these further issues in my Free Trade: Myth, Reality and Alternatives (Zed 2004), which I hope will be a handy supplement to Gomes's very informative book.
Graham Dunkley, 76 Hazeldene Road, Gladysdale Vic 3795, Australia.
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|Publication:||History of Economics Review|
|Article Type:||Book review|
|Date:||Jan 1, 2004|
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