The case for free trade

Economic history isn’t the most interesting of topics, especially when you’re 13 (I’m selling this article in the intro aren’t I?) but the UK government’s insistence on me learning about the Corn Laws means one thing: I know why tariffs are a bad idea.

I can also tell you, 32 years later, that Peel repealed the Corn Laws in 1846 (I did have to look the year up).

Before this happened, Britain imposed tariffs on imports of corn and other food (you can see where the name came from now). It meant food was expensive, and when we experienced poor harvests, people starved.

A study published in the Economic Journal in 2021, found that abolishing the Corn Laws benefited 90% of the population. Only the top 10% of earners lost out.

The repeal of the Corn Laws partly led to Free Trade, the system we were generally used to until this week. It means we can form trading agreements with partners. You can sell in my market and you can sell in mine. Some restrictions are put in place, but they need to be fairly applied. If you’re not in the shared market, you don’t get the competitive advantage. Which is why Brexit hurts.

Economics shows that when you impose tariffs, even if they benefit producers, consumers are almost always worse off. And whichever way the numbers go, there is a negative impact on society. The losses outweigh the gains.

It’s a topic that economists have studied in depth, at length, repeatedly, and the free trade argument is the one most agree on. Not every one. But most.

If you’re interested in geeking out about world issues, then you might like to read my article about tackling ‘wicked problems’ over on my business blog.