But Stretton is about slandering the market and not illuminating his readers. He sought to prove this by claiming that free trade has never brought a capita-importing country back into balance. This is an incredibly silly thing for a so-called economist to make. Free trade is based on the theory of comparative advantage and embodies the principles of specialisation and exchange. Therefore the benefits of free trade to Australian consumers come from the increased specialisation of trade, labor and capital.
Deficits have nothing to do with it.
It is not free trade that creates unemployment it is Stretton s union mates that do that. From the early 1980s, for example, average protection rates were cut by 15 per cent to 23 per cent. However, these cuts were more than offset by the falling dollar, the depreciation of which left protection levels for the textile, clothing and footwear industries largely untouched. Yet these industries still suffered a significant decline in employment. Moreover, a 1992 Reserve Bank study totally discredited the mercantilist argument that tariff cuts caused our unemployment.