Q: Should a free country trade with people who live under a dictatorship (e.g. China, Cuba)? And, if not, should the government of the free country restrict such trade with dictatorships?
A: If you enjoy living in a free country, then you benefit from that freedom whether you care about political ideology or not. Unfortunately, large numbers of people who are very effective and conscientious in business dismiss political ideology as unimportant. “Who cares if China doesn’t allow free speech, and if it jails people who disagree with the government? Those are political issues, not business ones.”
Not so. First of all, if you engage in trade with the unfree country, then you enable its government to pretend that dictatorship can work. You assist in the aid of nonfreedom. In Cuba, for example, the underground economy allows people to engage in the delusion that Communism does work to some degree, at least with a dynamic leader. With regard to China, trading with dictatorships means: you assist the unfree government in building up its military muscle, thereby threatening peaceful, free countries such as the one in which you live.
If you trade with China, you might make some extra money (at least, so long as the Chinese government does not dislike you or the people in China with whom you trade.) But by hurting the cause of freedom, you hinder your own ability to feel secure in the fact that you will continue to live in a free country.
To individuals who only care about this week or, at the most, next month or next year, these arguments will not be convincing. “In the long run, we’re all dead anyway, so who cares?” is their unspoken (and sometimes spoken) attitude. Yet this childish, immature, short-range thinking remains the only “case” in favor of doing business with an unfree country. Of course, some argue that helping victims of a dictatorship build an underground economy will help those victims eventually emerge free. But where’s the evidence for this claim? China remains as unfree as ever after years of economic liberalization and favorable trade status with the U.S. The first President Bush, and later President Clinton, insisted that we have free trade with China to help them ease the transition to freedom. But if anything, China seems to be getting more dictatorial in recent years. Castro has kept Cuba under dictatorship for four decades now, despite the presence of an underground economy to keep the country from completely going under.
Another factor which might make my argument against trading with dictatorial countries less than convincing is that we no longer live in a fully free country ourselves. The U.S. government manages (or more accurately, mis-manages) every sector of the economy to one degree or another. Occasionally they throw us a few crumbs of returned freedom (e.g. a tax cut) here or there, but the trend is still towards more government overall. Government heavily subsidizes and/or regulates many key industries (banking, currency, health care, education, fuel, etc.), making political favoritism more of an incentive and objective excellence less of one. The less free we become, the harder it becomes to convince people that there’s a profound difference between a country like, say, China and a country like the U.S. But this current murkiness does not prove that there are no principles. It merely shows that slowly moving away from principles while still clinging to certain aspects of those principles creates moral murkiness.
Moral principles, if they are true, are also practical. Freedom from the initiation of force by others is a huge and essential value. It’s not just some floating abstraction. The benefits of freedom (or relative freedom, which we have today) are all around us to behold. Sadly, there’s less of it in the U.S. than there used to be, and less than there should be. But there’s still a great deal more of it here than in places like China and Cuba.
Should the government force you into not trading with whomever you want? No, I don’t believe so as a general rule. Just as drafting young men to fight for freedom represents a contradiction, so too does forcing people not to trade for the sake of saving freedom represent a contradiction. However, if the country in question is a known military threat to the United States, our government can and should consider an economic blockade as part of its strategy of self-defense.
If you enjoy freedom, and you actually want to assist and trade with a country who is known to be a military threat to your freedom, then something is morally and psychologically wrong with you. Quite frankly, if people in a free country abandon rational principles in favor of shorter term gains, then they deserve whatever the consequences may be. Free people remain free only so long as they grasp the principles upon which freedom depends.