Foreword to Free Trade Today – The Capital Myth by Jagdish Bhagwati

This short book that can now be called a classic, presents itself as a compilation of the texts of three lectures delivered by the author. The text of the three conferences was published for the first time in the United States by the Princeton University Press under the title Free Trade Today. In The Capital Myth, Bhagwati refutes any parallel between free trade and free movement of capital.

Pascal Lamy prefaced the book. He is reminding benefits of freedom of trade, usually well distributed, are hard to feel everyday on a short term, while the lower costs, are very visible, tangible and concentrated in space and time. This is the thesis of The Logic of Collective Action: Public Goods and the Theory of Groups (1965), where Mancur Olson explain why the interests gathered together and easy to mobilise of producers get the upper hand on the interests diffuse and complex to organise of the consumers, more meaningful for the common interest. The Director-General of The WTO is advocating for a special fund to diminish the effect of unexpected trade shocks.

Link to the book note by Bertrand de Largentaye (available in French only)