| A society based on the principle of allowing economic resources to move freely, within and across borders, eliminates special concessions for the few at the expense of the rest. A society open to competition provides equality of opportunity to create wealth and equality of rights and obligations before the law. The essays that follow, center on policies that influence the movement of factors of production across national borders. The main assertion in these essays is that policies explain a great part of economic development because policies set up structures of incentives that either prevent or facilitate the creation of wealth. Of particular concern are policies that influence the international mobility of goods, services, capital and labor. The prohibition of freedom of access to those factors of production irremediably leads to net benefits for a few and diffuse costs for the rest, resulting in a deadweight loss in society. This is the case of policies like antidumping, subsidies, monopolies, oligopolies, foreign labor quotas and other unproductive activities. Restrictive measures to international factor mobility are usually the product of rent-seeking behavior. These types of policies initiate from political redistribution of income, causing rivalry among pressure groups for political favors, and from government authorities seeking businesses' financial support. Companies that benefit from policies that privilege them with subsidies or other type of tax redistribution can enjoy a greater advantage over their competitors and thus form government-businesses elites. This creates artificial economic inequality and results in the increased gap between rich and poor. Conversely, the assurance of factor mobility across national borders is a net sum win-win situation because it opens competition for all economic actors. The losers are monopolies, oligopolies and protected labor markets that lose privileges from policies that have been designed to help them to get rid of foreign competition. The winners are intermediate and final consumers, importers, exporters, investors and entrepreneurs. These actors in the economy represent the greatest percentage of the population. |
