Wednesday, 29 April 2015

Trading with Saudi Arabia

Moving on from hairpulling yesterday, I’m told that Mike Hosking opined on John Key visiting Saudi Arabia to sign a free trade deal, arguing he should be free to go, that it didn’t stop Phil Goff and Helen Clark signing deals with China – despite their own appalling human rights record and treatment of Tibet – and with Indonesia – despite their own appalling human rights record and penchant for executing folk for victimless crimes.

Hosking argues that trade engages only with the values of the market and should not therefore engage with moral matters.  What goes on in Saudi Arabia is none of our business, he says, and who is little New Zealand to say anything.

Let me engage with that error in a moment. Because David Slack is making what’s seen as the other argument, the argument for Key not going:


Seems fair enough, right? Much of what goes on in Saudi Arabia  is disgusting – executions, the subjugation of women,  an essentially medieval society -- and much of what they promote outside is even worse – especially their export of Sunni and Wahhabi terrorism.

But here’s something that’s strange. Many of the usual suspects noisily opposed to trade with Saudi Arabia because of their barbaric culture are just as noisily opposed to telling other cultures what to do. It’s not our place, they say. Yet they insist Key tell Saudi Arabia what to do.

So the usual apostles of moral equivalence become of a sudden the apostles of moral propriety.

And yet their new doctrine of moral non-equivalence has some strange omissions.

The same folk who oppose a free trade deal with Riyadh for being Islamofascist thugs who sponsor Sunni and Wahhabi terrorists and execute women are generally okay with Tehran having a nuclear bomb, despite Tehran being Islamofascist thugs who sponsor Shia terrorists and execute homosexuals. They'd be okay, I should think, with a free trade deal with Palestine, despite the ruling Hamas training up youngsters to be suicide bombers and executing people for “collaboration.”  And nothing about Indonesian executions this week, or Chinese human rights abuses in general, has raised calls for us not to trade with these places.

So what's the difference? They're not against fascist thugs - they're just against a certain type of fascist thug…  Just a wild stab in the dark here, but my guess is that the type of thug they’re okay with is anti-American, and the type of thug to whom they’re opposed is not.

That’s a very, very strange king of moral non-equivalence to harbour for apostles of moral equivalence.

As is, on a different front, that of Mike Hosking.

Hosking argues that trade does not engage with moral matters; that it engages only with the values of the market place

Read that again: trade does not engage with moral matters; it engages only with the values of the market place. 

This, ironically, is the very opposite argument to that made by the great nineteenth-century free traders, who argued that it is precisely the values of the marketplace that promotes the spread of moral matters.

Richard Cobden, for example, in 1846, advocated for free trade not just because it brings greater prosperity, which it does, but because it is the primary force in spreading peace and real freedom:

I have never taken a limited view of the object or scope of this great principle. I have never advocated this question very much as a trader.
But I have been accused of looking too much to material interests. Nevertheless I can say that I have taken as large and great a view of the effects of this mighty principle as ever did any man who dreamt over it in his own study. I believe that the physical gain will be the smallest gain to humanity from the success of this principle.
    I look farther; 
I see in the Free-Trade Principle that which shall act on the moral world as the principle of gravitation in the universe,—drawing men together, thrusting aside the antagonism of race, and creed, and language, and uniting us in the bonds of eternal peace.
    I have looked even farther. I have speculated, and probably dreamt, in the dim future—ay, a thousand years hence—I have speculated on what the effect of the triumph of this principle may be. I believe that the effect will be to change the face of the world, so as to introduce a system of government entirely distinct from that which now prevails.
    I believe that the desire and the motive for large and mighty empires; for gigantic armies and great navies—for those materials which are used for the destruction of life and the desolation of the rewards of labour—will die away; I believe that such things will cease to be necessary, or to be used, when man becomes one family, and freely exchanges the fruits of his labour with his brother man.
    I believe that, if we could be allowed to reappear on this sublunary scene, we should see, at a far distant period, the governing system of this world revert to something like the municipal system; and I believe that the speculative philosopher of a thousand years hence will date the greatest revolution that ever happened in the world’s history from the triumph of the principle which we have met here to advocate.

This is not mere cant. The spread of the Free-Trade Principle following the efforts of Cobden and his colleagues did change the face of the world: the prosperity of the industrial revolution was spread around the globe, and freedom with it; further, and despite occasional eruptions, the late nineteenth century was described as an oasis of peace midst a mountain of war: Wars, saying Cobden, being “another aristocratic mode of plundering and oppressing commerce,” when what commerce most desperately needs is the spread of freedom and the maintenance of peace.

The great difficulty, in the nineteenth-century world -- as in Saudi Arabia today -- is pulling the aristocrats from the levers of power so that peace and real freedom can spread.

But unless you’re selling your enemies the rope with which to hang you, a free trade deal is a start.


  1. Always thought the US should have offered to trade with Cuba years ago. Fidel wouldn't accept I guess, but if he had the central/south american situation would have settled. Even if Fidel hadn't accepted, the flow would have changed throughout the area.

  2. Yes, very true. Compare still-authoritarian Cuba with Vietnam, where the values of the marketplace permeate the place.

  3. I think there's two other reasons the usual suspects on the left are against this. One is that it's being initiated by Key (and they're against whatever Key does, now trying to twist the knife and finish him off on the back of hair-gate). The second is that it's potentially a free trade deal (and they're against free trade). The barbarity of Saudi culture are just convenient points to base their argument on.

    As you point out, opening trade up will generally (in the long term) work against rather than encourage barbarity - but that's something most on the left are incapable of recognising. A similar principle applies when you open up immigration from non Western cultures - but that's something many on the right are incapable of recognising. Both fail to recognise that when you have freedom the power of the good trumps the power of evil.

  4. Saudi Arabia has been very wealthy and trading with many countries for a long time; the culture is fundamentally the same as it always was. How long should it take to get their act together?

    There is a lot more to a culture than free trade or economics. Believing that open trade will change barbaric cultures is a naïve pipe dream. Those 19th century economists quoted probably never visited a non-European country.

  5. Sam - I think you're missing the point. No-one is saying that trade is a silver bullet that fixes all ills. But trade certainly exposes a backward society to outside influences and pressures that gradually erodes away at the worst of them. The fact we are even talking about the Saudi brutalities in the context of the trade deal is an example of exactly that. That erosion can be a very slow process, especially when the political elite control the worlds biggest oil source as they do in Saudi Arabia. But you can only evade reality for so long. I liken it to a drip from a tap falling into a bucket. Each drip may seem to have no affect, but eventually the bucket will overflow.

    If you doubt this than consider the precarious grip the Communist Party now has in China as a result of opening their economy up in recent decades to compete in the international market place, and the greater freedom the Chinese now have compared to say 40 years ago as a result.


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