A free market examplary is not a definite free market after all. Protectionism is still required for the great American to counter a possible threat to their security. A recent takeover of P&A British Port Company by Dubai Port World from UAE means that the Dubai based company will be handling the operation of six major ports in USA. USA, a great champion and promoter of global free market economy in the end has to bow out to this unforeseen situation by delaying the port deal for a while. It was a UAE initiative by the way to allow some space for Bush Administration to convince the skeptical lawmakers. However, this will surely send a wrong signal to the whole world that the free market still needs intervention. Protectionism is somehow essential to secure the country’s interest. That’s why China won’t remove their fixed exchange rate system. The same goes to Malaysian government. That’s why France and Luxembourg are
countering the hostile bid for Arcelor by Lakshmi Mittal (apparently this guy is the third richest man in the world) to protect their country’s interest. Without some protectionism, the free market system is vulnerable to hostile and unexpected situations. Bank of England once had suffered billion of dollars losses due to fixed exchange rate exploitation by George Soros. Apparently, Malaysia was badly affected too due to large amount of foreign exchange reserves that we had in pound sterling. The depreciation of pound sterling costs us a huge USD $4 billion. How about the Asian financial crisis in 1997? You see, if United States blocks this port deal, we can simply say they are hypocrites. Free market never exists and it always be a conditional market or command economy.
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