Two articles this morning coming from the G20 meetings in London. One is about Obama and Chinese premier Hu Jintao agreeing to avoid the pressure for protectionist economic policies. The other is about the ongoing protests in London (and elsewhere) which are described as being “anti-capitalist.”
Both articles mention that there are likely to be agreements soon about new regulations for finanacial markets, but I am not sure why different countries have to agree on the same regulatory model. Everyone wants to stay competitive with other countries, but they are disagreeing about the scope of regulations needed. I will be a bit surprised if they actually agree on strict and enforceable rules.
Meanwhile, how will these protests affect the ability of leaders to maintain commitments to free trade? At least in the more democratic countries, it seems likely that protectionism will become stronger.
Milton Friedman once wrote that the one thing all economists seem to agree on–free trade–is the one thing the rest of the world seems not to understand. We ought to teach comparative advantage to kids when they are about 12.