 So good afternoon everybody. As you can see our numbers have dwindled from yesterday. I was warning you that we're competing today with the judge Napolitano and a graduate seminar. I have discovered however that Professor Sloaner instituted a quota both on the graduate seminar and judge Napolitano's class. I have to start with a disclaimer that I did not ask for the quota. I did not ask for protection from competition. Just so you know, I did not go lobbying for it. It just happened. Had I done that it would have been completely against what I'm going to tell you today in today's lecture. So that's as long as you're clear on that. If you have any issues, obviously take it up with Professor Sloaner. So what I thought we were going to talk about today is, as you can see the topic seems fairly broad free trade versus protectionism and I will focus primarily on the subtitle, the idea of the differences between ideology and bureaucracy. Now if you've attended yesterday's lecture on the division of labor, you know that I focused on the economic principles that underpin our understanding of international trade, our understanding of this phenomenon of exchange, whether it's within borders or across borders. In past years Professor Herbner used to give a lecture on free trade and its enemies, which is available on YouTube in various iterations. And in that lecture he used to focus on all sorts of economic arguments against protectionism. He used to tackle the idea of the balance of payments as a reason, the balance of payments deficits as a reason for protection. He focused on mercantilist and neo-mercantilist arguments on the infant industry argument and so on. I thought that for this lecture I'm going to try to compliment both the lecture that I gave yesterday and Professor Herbner's past lectures and that I would focus more on the history of free trade, some of the salient points in history of how free trade developed. Did we actually have free trade at any point in time? When did we, when was it that we came closest, you know? How prevalent has protectionism been over the last two or three centuries? And then I thought I would also speak to you a little bit about how to be strategic about promoting free trade, because I noticed in a lot of my students thinking that well, my multilateral free trade agreements might be the best way to go about it. And I personally disagree with that and I thought I would present you my view on how to best get to global free trade. So keeping that in mind, I thought that today we would start, as I said, with the historical part, looking at free trade before and after the two world wars. If you remember yesterday, we were talking about the importance of both the sound monetary system end of peace for voluntary exchange and for the division of labor and you can imagine what kind of impact the two world wars had on the global division of labor. It led, Mises used to call it the international destruction of global division of labor happened within the two world wars. And then we're going to talk a bit about the trends that are happening right now in international trade in the 21st century. And whether there are any trends that are promoting free trade or rather going against free trade. And then I thought I would do with you something that I do with my students as well, which is compare a little bit the academic discussion, the rhetorical discussion on free trade with what actually happens when a trade policy is drafted, how trade policy looks like, how tariffs look like in practice. You'll see in a minute what I mean. And then we're going to conclude the lecture looking at why trade agreements don't work. And when I mean trade agreements, I mean intergovernmental trade agreements, multilateral, bilateral. Yeah. And what can be done again from a strategic point of view? So how do we get to that point where we would have global free trade? So if you were to take a snapshot of the way the international trade looks like today, both in international trade theory and international trade policy, I think Frank Tausig's statement still stands. Frank Tausig was one of the leading international trade theorists in the early 20th century. And he said that the doctrine of free trade, however widely rejected in the world of politics, holds its own in the sphere of intellect. So that tends to still be true today. The doctrine of free trade is generally a lot more accepted in academic circles than it is in political circles and in public circles as well. Now, that being said, free trade is a very debated topic, both in academic circles and in public opinion. As I was saying, scholars tend to have very well-defined opinions. They will, you will have a very hard time finding an international trade scholar that would say they're not pro-free trade. Paul Krugman is pro-free trade just to kind of give you an example. I got a phone call about two months ago when the discussion on Trump's tariffs at its height from the spectator in the UK for an interview. And obviously I felt very flattered, which, you know, my feeling of flattery went away in a few seconds when they said, you're the 40th person we're calling, we're trying, we're trying to find someone to give us an interview that would be in agreement with Trump's tariffs. So I was about the 40th person on the list that they had tried because all the other 39 before me had said, no, Trump's tariffs are not going to work. So you may be tempted to say, looking at this, that, well, there's definite agreement amongst academics that, you know, the free trade is the best thing for the world economy. But you would be wrong. Yeah. A lot of mainstream economists are very inconsistent in their view. First of all, what they understand by free trade is not what Austrian economics understands by free trade. So on the one hand, they see free trade as referring solely to international free trade. They don't apply the same principles that they applied to international trade to domestic exchange. Yeah. So they make this distinction and this colors the way they view free trade as well. So they don't understand, by free trade, they don't understand the absence of government intervention. Yeah. They understand the way of managed trade, free managed trade by the government. And on the other hand, they also, scholars are also inconsistent in not accepting the principles of the principles of comparative advantage to its full consequences. So they will, again, what they understand by free trade is some level of tariffs. But the problem here is, as Mises used to point out to his students, if tariffs are good, then they cannot be high enough. If tariffs are bad, then they cannot be low enough. Yeah. But what most scholars will say, well, no, definitely free trade doesn't mean zero tariffs. Free trade means some sort of like mutual understanding on a good level of tariffs. Yeah. So they're very inconsistent. On the other hand, the public is very ambiguous themselves and their opinions about globalization. I was hinting at this yesterday. You have to understand that we have never experienced purely free trade. We have never experienced unhampered globalization. So I was trying to explain to you that, for instance, if certain groups will lose their job after we open the borders to foreign competition, that is a loss that they feel directly. Now, the benefits that come from opening the borders in terms of increasing the standard of living, access to a lot more goods and so on, those benefits tend to be, in a way, taken away from them by other government interventions, by their domestic government interventions, by a poor monetary policy, for instance. So in a way, the public never gets to fully feel the benefits of free trade. They feel a great amount of them for sure, but they never tend to feel them fully as fully and as directly as they feel, like, for instance, a job loss. So that's what I think that you compound about with the lack of education about these issues. And that's why you get this sort of ambiguous view about globalization in the public. Now, as I was saying, free trade debates usually encompass only international exchange. This is true for scholars as well as for the public. But Mises said that there's absolutely no difference between domestic exchange and international exchange, between domestic trade and international trade. It's only a difference in the data, only a difference in the way we collect the data. It's the arbitrary border that is drawn between countries. And finally, it's worth remembering that when we do talk about government trade policy, and we will talk about this today, is that we tend to assume that they're motivated by a certain type of ideology, by a certain kind of theoretical framework, which might be true, depending on the advisors that they have. But at the same time, trade policies always motivated primarily politically. And what I mean by politically is I mean interest groups that are lobbying for protection, like myself with Dr. Salerno, yeah. That's where the trade policy really gets its motivation from. And I think no matter what you call it, free trade, fair trade, managed trade, the ultimate reason of a trade policy is for both companies, yeah, like the crony capitalists lobbying for protection, as well as for the government to gain power and to gain benefits at the expense of others. John Stuart Mill used to call protection an organized system of pillage of the many by the few. So in a way, things have always been like this, sadly enough. I wish I could tell you that there's been a time when this hasn't happened. But there has been a time when this was this level of protection, this level of government intervention in international trade was very much reduced. And this was in the second half of the 19th century in Great Britain. You could call that the golden age of free trade. And it was due primarily to the influence of classical liberalism, yeah, the influence that classical liberalism had on the domestic policies in Britain. That's where it was initiated. I could give you here an example of the repeal of the corn laws, yeah. So there was a lot more economic freedom in domestic matters in Britain. And that translated into their foreign policy. And it was primarily through the work of an Englishman, Richard Cobden, and a Frenchman, Michel Chevalier, who were friends and who worked together tirelessly to sign what's called the first modern trade agreement between England and France with the purpose of reducing French duties on English imports by about 30%. Now they went to Napoleon III to try to convince him. And Napoleon III said, I am actually quite willing to sign this treaty, but you have to remember that in France we make revolutions, not reforms. They didn't abandon their pursuit. However, in 1859, they did sign the treaty. Now I have to mention here, Britain had already reduced import taxes on French goods to almost nothing before this treaty was ever even in discussion, yeah. So Cobden had already worked, he was a member of parliament, had already worked on reducing British import duties before suggesting this to the French government. The French government only reciprocated after the fact. And the treaty was very successful, the volume of trade between England and France doubled. And there are quite few economic historians that attribute to the treaty and to the trade relationship between England and France. The great development in the technology of transportation and telecommunications that happened in the second half of the 19th century, so after the first industrial revolution, the sort of second industrial revolution. Yeah, the first undersea telegraph cable was between England and France, and it was to facilitate business between the two countries, yeah. However, this was a very short interlude, if you want, to a history that primarily belongs to protectionism rather than free trade. It ended in France, the treaty was scrapped at the end of the 19th century, so it only lasted for about three decades. And Britain was very much an oasis of free trade in the world. European countries were very protectionist, the US was very protectionist as well, and this trend continued into the First World War, and it was actually made worse by the First World War, yeah. Peace is absolutely necessary to free trade. And free trade is absolutely necessary to peace. They work together, yeah. So when you have military spending, when you have war making, it's really hard to, it's impossible to expect free trade. So you can see here, after the First World War, for example in the United States, the smooth holly tariff act imposed duties on imports, of about 53% in 1931 and 59% in 1932, these were on average, yeah. Obviously a lot of countries had closed themselves to foreign trade during World War I for reasons of national security and protection and so on. And trade volumes, you can take into account the Great Depression here as well, trade volumes globally declined by 25% between 1929 and 1933. So Mises called this the disintegration of the international division of labor, yeah, the disintegration of the world economic system that was made possible by classical liberalism, by the emergence of classical liberalism in England and the French English trade agreement, yeah. The First World War started or accentuated this disintegration and the Second World War basically completed it. So after 1945, you have now what we can call the new international economic order and the United States was the front runner here in leading this post-war reconstruction and this new international economic order. And Razine Saleh, who's a trade theorist who teaches at the London School of Economics and also works for the Institute of Economic Affairs, he's very classical liberal. So he explains that after 1945 the idea of trade and the idea of laissez-faire became completely separated, yeah. Laissez-faire was completely abandoned because war by definition requires heavy government intervention and heavy growth of the government. If you've ever read anything by Professor Robert Higgs, you know that the governments grow tremendously during periods of war. Yeah, so it's almost impossible to roll them back afterwards. And a consequence of that was, well now we've had two world wars, a lot of government interventions within this time, like a very heavy percentage of the economic activity is controlled or even done by the government. So the idea of laissez-faire was completely abandoned. So what do we do now with the idea of free trade or trade or global trade? So the idea became that free trade, what was known as the idea of free trade, is now compatible with a series of first best interventions by the government, yeah, to correct what they call domestic market failures, yeah, or international market failures if you want. So all of a sudden the accent was not on reducing tariffs, on rolling back the government from these affairs, but it was on the government needs to have a fairly active role in making sure that trade policy is conducted correctly, it's conducted to the greatest benefit for our nation and so on. This was happening primarily in the Western economies, Western European economies and in the United States, but this was also accentuated by the newly decolonized states who now were on their own and able to devise their own trade policies. And they adopted actually a very old-styled mercantilist view where they did not think that, where they thought that actually the benefits from being integrated in world trade come from exporting and not from importing. So they focused on industrializing their nations, yeah, on reducing their exports of raw materials and so on. And obviously these can be coupled with a lot of increases in tariffs as well. On top of this, during the two world wars, the governments had gotten very sweetened to the ability to inflate their currency. Now Professor Solerna will talk to you on Friday, I think about various monetary systems, but the idea is before the First World War we had a gold, international gold standard and this was very taxing for the governments. They weren't able to inflate as much as they wanted because that brought about an exodus of gold out of the country, a drainage of gold out of the country. So they wanted to be able to do something, to be able to inflate as much as they wanted or as much as they had been permitted during the war. They already started in the interwar period in 1922 by having the central banks meet in Genoa to discuss expanding their currency. They were finding credit or inflating at comparable rates so that the drain of gold wouldn't be as significantly felt. And that came to a more further completion with the gold exchange standard in 1944 and finally with the renunciation of the gold fetters, the constraints that the gold standard put on governments, which happened with the closing of the gold window in 1973, the connection between the dollar and the gold was completely severed. Now, in this very bleak outlook came about the general agreement on tariffs and trade, which was fairly successful. This was an initiative to try to get international trade back on track after the two world wars. And it had about seven rounds and it made progress in reducing trade barriers, tariff trade barriers. But you have to remember that these trade barriers had significantly increased during the two world wars. So the level that GATT brought tariffs back to was actually higher than it had been before the 20th century. So we didn't go back to a situation not even comparable to that of Cobden and Chevalier, not to mention not better. And then GATT was followed by the World Trade Organization, which if you've ever read any of my articles, which I'm sure you did, has actually done a lot worse than GATT. The World Trade Organization is very large. It has about 164 members. And negotiations are done with huge delegations that can never get along. So in its entire existence, it has actually never signed an agreement, a multilateral trade agreement. They do meet in some very exotic locations, though. So if they do sign it, it'll have a really nice name, like the Bali package or I think Bora Bora is next. So it's very nice. Now, even within this very bleak outlook, after 1945, global trade did develop, though. And it was primarily due to technological development, which made it possible. And it was also due to the fact that I like to think that markets are very resilient. So this was all piled up on the strength of international trade, and somehow markets found a way to breathe through the loopholes. Perhaps the best example of trade growing in spite of government intervention and not thanks to it, as people tend to think, are the Asian economies who have experienced a tremendous rise in their commercial power and position in international trade after 1980 and specifically after the 21st century. Yeah, so China and India doubled the, by entering in global trade, ended up doubling the global workforce. Yeah. And this shifted capital across the world. It was a tremendous shift of capital and of production, and obviously of comparative advantage across the world. Yeah. The reason this happened is because these countries started to realize that the very closed border policy that they had to trade was actually not working to their advantage. Don't imagine that they liberalized tremendously, but the very small liberalizations that they did promote had a tremendous impact on it. And you can only wonder counterfactually what would actually happen if they would liberalize completely or if they were liberal more in their domestic policies as well. Yeah. So as I said, I find that world trade is really resilient in that sense. Now, I have a quote here from Mises that explains sort of the intellectual, the debt that Western economies have to these economies. You know how people will say that the reason these economies took so long to get involved in world trade is because they were exploited by the richer economies? Mises had a very original way of treating this question and I'll just read the quote. He starts by explaining the policies that these, what he calls least developing or underdeveloped countries had. He said, they wanted to nationalize before they had permitted business to build plants and enterprises which could be expropriated. They wanted to establish a new fair deal in countries whose distress consisted precisely in the fact that they had not known what is today disparage as the old and unfair deal. All these radical intellectuals of the underdeveloped countries blame Europe and America for the backwardness and poverty of their own peoples. They are right, but for reasons which are very different from those they themselves have in mind. Europe and America did not cause the plight of underdeveloped nations but they have prolonged its duration by implanting in their intellectuals the ideologies which are the most serious obstacle to any improvement of conditions. The socialists and interventionists of the west have poisoned the mind of the east. I thought that's a tremendous way of explaining not only the historical development of this particular issue but the importance of ideas and of economic ideas. Elsewhere Mises says that what these countries lacked was good sound economic ideas in capital, nothing else. So as I said all of these were however just very partial liberalizations and this is true of the Asian economies that have risen tremendously in the 21st century and is also true of the western economies and so on. So where we have free trade it's very little compared to what it could be and still it's very successful. But the approach some people have called it Smith Abroad and Keynes at Home. So we'll be free traders abroad with other people and we'll be heavily interventionist at home. You know what the Keynes part at home leads to? Pretty much this whole week is indirectly about that. I'm just going to mention the idea of the widening inequality, the middle class squeeze, even the general rise and sort of a globalization backlash happens as I said because of domestic interventions because people don't get to feel the full benefits of free trade because of domestic intervention. But the Smith Abroad part of the equation obviously has not been true as I've been trying to point out so far. It's been on only a very limited level of trade liberalization so far. So just to kind of sum up, discussions about trade protection and why is it necessary and what can the government do and how they would need to approach it. So you have three types of general trade policy arguments. The economic argument as I was saying, have a look at Professor Herbner's discussion in the past on free trade and its enemies. Yeah, the infant industry argument, the balance of payments theory and so on. Then you'll have political arguments which I'm sure you're familiar with. Like we need to protect our industries because they're strategic industries. We need national security, you know, buy American because America is the greatest and so on. America is the greatest but that's not the point here. And obviously ethical reasons, like we need to have fair trade. And you saw what Mises was saying, yeah, it's fine to have fair trade but you need to develop, you need to have trade first and foremost. There's people that will kind of put the cart before the horse in these kind of respects and so on. And then the governments can take various roles. Some of them can be very active or aggressive in their trade policy, are very high tariffs, constantly trying to block competitors from entering their domestic markets, very active in subsidizing the local industries and so on. They can be passive and America has tended to be rather on the passive side for the past few decades. So the idea of like benign neglect, I mean we'll interfere when it's necessary to interfere but we have a general moderate level of protection. We're not out to get anyone, yeah? We're just trying to be fair sort of and kind of manage it gently. And there's also the defensive approach and you may think of Venezuela here, yeah? The idea that we need these tariffs because other people, other nations are attacking us and are welfare, yeah? Romanians have this mentality funnily enough, yes, that companies come and they make profits in Romania and they take the profits away and they're only here to steal from us. Yeah, that's the mentality. So that's where a trade policy becomes defensive in that sense. And obviously you can have various ways in which the governments can approach this. So the modified market approach is when governments say, well, there's market failures either because it doesn't free trade without our intervention would leave our infant industries underdeveloped, would endanger our national security, it would not be fair and so on. So these general systematic market failures and we need to target that. We need to modify the market. What our interventions do is they modify the market according to what we think is the most efficient or the most fair trade deal, yeah? Other governments will take a case by case approach. So it depends on the industry. Is this industry really relevant to our national security or not and so on? And then you can have two very general approaches. I was mentioning Venezuela, yeah, the idea of economic warfare. So we are locked in an economic war with other nations. So we need to use every tool or our disposal to protect ourselves from it. Or the way we use trade policy is important to the way geopolitical power is distributed. You may have noticed this in the discussions between the European Union and Russia or America and Russia. Yeah, trade policy usually becomes a tool if there's a larger geopolitical issue at stake. Now, every time I present this to my students, they leave the class with the opinion that trade policy is something really glamorous. It must be really nice to be a trade policymaker because I mean you deal with really important issues like national security, right? And things like geopolitical issues. It's a really important job. So what I like to do when they come in the next class is to show them what these trade policy committees really do. And the best example to do that is to show them the kind of products and goods and regulations exist within the quagmire of bureaucracy that is trade policy. And it's a really fun thing to do. And as we do this, try to keep in mind that someone is getting paid, heavily paid, to classify this, to update this, to send countless emails, to get these meetings together, to type this. These are thousands upon thousands upon thousands of pages. So I'm just going to give you an example of goods and services that have tariffs on them in various countries. So we're starting with the U.S. There's asparagus and sweet corn. I'm not going to read the level of terraces. Apricots and cantaloupes are taxed. Brooms, because they're essential and strategic and geopolitically important. So our corsets and gloves, yeah, and commercial plate wear. In the U.K., very typical, you know, horse racing is very popular there. So walking sticks, riding crops, not including toy umbrellas are taxed. Now the EU, you know, has a very overly developed section at the commission where they deal with trade issues. It's sort of related to the common agricultural policy as well, they kind of work together. But they have a lot of regulations. So the European Commission regulation on classification, labeling, and packaging, which applies to foreign goods, as well as within EU goods, is about 1400 pages long. That's about as long as the NAFTA trade agreement. There's a regulation on the banana stabilization mechanism for bananas from Colombia and Peru. Now what this means is that if within a particular year the imports of bananas from these two countries reach a certain level, this quota is triggered that limits further imports. And there's also been 10 meetings of the commission to discuss the regulation and the certificates of origin of garlic, fresh or chilled. Again, someone is getting paid to do this, to classify garlic as fresh or chilled. Yeah? The WTO doesn't do a better job either. Yeah? So you know that they have that dispute settlement mechanism so if two countries can't agree on a particular issue that concerns certain goods, whether they were, you know, subject to dumping or some sort of unfair deal, the WTO steps in. They can raise an issue there and they can discuss this and it gets settled. The ones that are ongoing trade investigations concern bicycles, seamless tubes and pipes, footwear with uppers of leather, fish fillets, and paper. It's just printing paper, you know? So the question is who benefits from this? Yeah? So what's the point? Well, the general idea would be, well, we have high tariffs in order to protect our domestic industries, to grow them, and to make sure that as a result we export. Yeah? That's the end goal of it. We do want to be part of world trade, these governments will say. But the way to do that is to have high tariffs and make sure that we become very productive. Now, this is what it's called the most favorite nation tariff. So this is the lowest level of tariffs that the WU recommends. Yeah? So if you apply a tariff of 5% on the goods coming from Mexico, then the WTO rule is you should not apply more than 5% on goods coming from other countries. Yeah? The most favorite nation. And it's sort of a good idea to see kind of like the level at which tariffs are accepted within the WTO. And you can see here that the Western economies, Asia and Europe and even Russia are somewhere in the lower band of tariffs. And that the highly protectionist countries are actually here in the South. Yeah, I was explaining to you before. So I was saying there's been tremendous liberalization here, but still, see, the level of tariffs are comparably a lot higher. So you can only imagine what would happen if China and India would lower their tariffs to the level of Western economies. And you can see the United States leading the way. Here. Now, if I were to show you a map of these countries' weight in total trade, yeah, these countries, if you want commercial power, normally according to the law, according to which if you protect your industries, you grow, you become an important global player, then the color shouldn't change much. Yeah, these should be the countries that have like the higher, more developed global trade. And these should be the countries that are, you know, to quote a famous person, losing instead of winning a trade. Yeah, if you're on Twitter, you must know. Yeah, so let me just show you the map of the percentage that these countries have in world merchandise trade. And I'll go back and forth so you can see what I'm trying to say. You see, so the most protectionist countries have the lowest level of those percentage share in world exports. The higher they tax their imports, the less they export. Yeah, I'll go back. See, it's nice. Again, most of my time I spent on doing this, preparing the lecture, yeah. So why do people think then that it's imports we gain from? This was a question that Mises couldn't really give an answer to, but he gave an analogy that I think explains the fallacy that is contained in this idea. He used to tell to his students, well, if it's true that in foreign trade we gain by exporting and not importing, then it should be true that when you go to buy bread, the advantage of making that transaction is exporting the money, paying for the bread rather than getting the bread itself. So it seems like a very simple idea when it's put this way. But how do we get to the point where we lower these tariffs? How do we get to the point where we have global free trade? Because it's okay to disparage about it. It's okay to say, well, look what's happening. But I've discovered that if you tell people, well, what's your solution? And you just say, well, the best trade policy is no trade policy. They'll become rather deflated with that. So I thought I would explain to you why what we have now doesn't work and what I think is the best way forward. So multilateral agreements, for me, suffer from a lot of issues. And not just for me, a lot of theoreticians, even mainstream scholars point out that they have a lot of issues. Primarily, they involve a structure of diverging interests of interest groups. So I was saying, you have 164 members at the WTO, they all get together. Each of those delegations have particular interest groups backing them. Their interests are never going to converge. So it's no surprise that the WTO hasn't managed to sign an agreement. The idea that the WTO is predicated on as well is the idea of reciprocity. We'll only benefit from trade if we allow their imports, but they also allow our exports. So to use the bread-selling example, the only way I benefit from buying bread is that not only will they give me the bread, but they will let me give them the money. The idea is, I mean, who would be upset if Walmart would say, no thanks, we don't want your money, just take the bread. But this idea of reciprocity is really ingrained in the way people think about trade agreements today, that the only way to get the benefits is that of lowering our tariffs, as if they lower their tariffs as well. The same thing is with the regional bilateral trade agreements. These are even more dangerous if you want, because with two governments, they can get along and the interest groups can actually converge and actually have a way of reaching a mutual understanding. So they tend to become reciprocal protectionism, not reciprocal free trade. Most of the times when you'll hear that a trade agreement reduces tariffs, it means that Mises was always warning about this. But what's happening in domestic matters? What's happening with the non-tariff barriers, with the red tape? Are those staying the same? Are those being lowered as well? Or are those growing to compensate for the reduction in tariffs? A lot of governments will say, we'll reduce tariffs by 30% and then come up with 2,000 pages on regulations on garlic that will just undercut that progress. Obviously, the more regulations you have, the larger this quagmire of bureaucracy, the more rent-seeking behavior you develop as well. So they're very problematic. And again, people are becoming really disillusioned with them in general, not just Austrian economics. And I think the easiest way to judge this is with, why are the governments doing this? Are they really committed to free trade? Probably not. How can we tell that? Well, if they were really committed to free trade, they would do it even in the absence of a trade agreement. Now, I've praised the Asian countries in tube here in mind that I do not praise them completely. I only praise what they have done in this particular area, but they've realized the importance that it would have opening up to free trade. From being completely closed, opening up to free trade would happen their welfare. So China has really led the way. So 20 years ago, it had an average of 65% tariffs. It's only gone down to about 10% today, which is still higher than a lot of the world. But it's a lot lower than it used to be. And a lot of East Asian countries you can see here have lowered their tariffs lower than what the WTO bound was. So this green line, if you can see here, is what the WTO had suggested would be their lower tariffs. And you can see here in red that most of them have gone below that. And particularly to goods that they actually produce themselves. So they've opened up the doors to competition. They weren't protecting the industries, the local industries. And there have been studies done that the data is not very recent, and I'm working on updating it, but you wouldn't be surprised that you don't find it all collected at the World Bank or at the WTO. They don't really want to collect that kind of data. That if you look at the total level of tariff reduction, how much were tariffs reduced between 1983 and 2003, you would think that we would have to be agreements between governments that led to that kind of tariff reduction. If we are to believe this idea that it's only reciprocity that brings about the benefits from trade and it's only under reciprocity. But actually 65% almost of the total tariff reduction happened unilaterally. Happened by countries, if you want accidentally just even stumbling upon realizing that even when other countries are protectionist around you, even when other countries cling to protection, as Mises put it, you're still serving your own welfare better by free trade. Or at least by liberalizing a little bit, which is what they're doing. So as I said, the data is not very new, it's from 2003. Maybe next year I'll bring updated information. So now I was mentioning we're almost we're getting to the end of it, so I'll be very quick. So what can we do strategically? Well, first of all, the key issue to understand here is that free trade cannot be accomplished top down. It's a bottom-up process. You need freedom in domestic affairs. You need less government intervention to no government intervention in domestic affairs. And then free trade follows. Mises used to say that foreign policy and domestic policy are but one system. You cannot have Keynes at home in Smith Broad. You'll just have Keynes. That's it. Or Smith, but well, no, you'll just have Keynes. The second thing that you need is peace. People say the free trade is the handmaiden of peace. Free trade brings about peace. Well, free trade also needs peace. Yeah, it needs low to nothing military spending. In order to enable these commercial relationships to flourish, because otherwise, why would you do business with a country that you were with? And if you don't take anything else away from this lecture, but you do take this, is that reciprocal free trade. I mean, if all countries pursuing a completely free trade policy is obviously the ideal that we're striving for. But E for each individual nation, we don't have to wait for that to happen before we lower our trade barriers. Baguatti, who's also a very important trade theorist, agreed with Mises in the idea that lowering your tariffs first, not only improves your welfare, but may even beget the reciprocity of other countries. Yeah, and to wrap up, I'll go back to where we started to Cobden and Chevalier. And Cobden was fully aware of this, yeah, of the benefits of unilateral liberalization, not only in increasing the welfare of Britain, but also in bringing about free trade in other countries. And in a letter to Chevalier, if I'm not mistaken, he says, we came to the conclusion that the less we attempted to persuade foreigners to adopt our trade principles, Britain's, the better, for we discovered so much suspicion of the motives of England that it was lending an argument to the protectionists. To take away this pretense, we avowed our total indifference, whether other nations became free traders or not. But we should abolish protection for ourselves, abolish protection for ourselves, and leave other countries to take whatever course they liked best. Thank you.