Right. So, boosters of free trade like to use Singapore as an example.

It’s a bad exemplar of the policies such people actually want for a pile of reasons, but Singapore does contain lessons for how to do trade and capitalism right (other than “be a city state,” which isn’t usually an option).

About 90 percent of the land in Singapore is state owned, and 85 percent of the housing is.

The point here is that trade is important to Singapore BUT the population is largely insulated from the effects of free money flows. Their living costs are stable because the state ensures that stability.

Likewise, Hong Kong, renowned for free trade back in the day, had a huge amount of the real estate owned by its government.

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Free trade is not free financial flow, and real-estate markets should not be subject to foreign money flows or the vagaries of an economy run through trade. You make trade work by sharply limiting what it affects, not by letting it affect everything.

This means stable costs for the native population and workforce and stable costs for people doing business in the country, which means that trade can do its work without destroying its own foundation.

This is true of capitalism in general. Capitalism, due to its inherent flaws, destroys itself in a number of ways. For capitalism to work, policies need to be in place for it to actively avoid these pitfalls:

  1. It must not be allowed to form unregulated monopolies and oligopolies.
  2. It must not be allowed to run bubbles; it must not be allowed to engage in mass fraud.
  3. The money gained from it must not be allowed to turn into power which controls government.
  4. Money must not, generally speaking, be allowed to buy anything that matters; from health care to a good education.

Capitalism, as the standard saying runs, is a good servant, and a terrible master. Only fools let capitalists actually control anything in their society that truly matters.

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