Posted on 05/09/2025 2:14:18 PM PDT by Angelino97
There is nothing intrinsically conservative or essential to capitalism about free trade. In the 19th century, Western countries that were struggling to modernize their economies enacted tariffs to protect their infant industries. The exception to this rule was Great Britain, which was then the economic front-runner. Even Britain embraced tariffs before World War I as it began to fall behind other countries in its industrial might. Of course, even when England was still a free-trade country, its leaders acted not in the name of a purist capitalist principle but in pursuit of the best interest of their people.
Those 19th-century Britons who turned free trade into dogma did not typically belong to the political right. More often, they were men like John Bright and Richard Cobden, who identified with the political left. Both these mid-19th-century British free traders accepted the designation “radical” to describe their politics. In the United States, a progressive Democratic senator of the 1960s, Paul Douglas, and more recently the socialist Bernie Sanders, have been strong partisans of what they’ve understood as free trade—a position that neither has regarded as inconsistent with a largely state-controlled economy.
English Tories in the 19th century, by contrast, favored grain tariffs to protect their agricultural production, which was likewise the position taken by landed aristocracies on the continent. The nationalist wing of England’s Liberal Party began to advocate for tariffs by the late 19th century, as its politicians came to believe that free trade no longer served the English people.
German unification in the 19th century began with a customs union, which the Prussian government organized in 1819 and which was gradually extended to other German states over a 30-year period. A major advocate for this program was the political economist Friedrich List (1789-1846), who spent several years in Pennsylvania, incidentally not far from where I live. During his stay here, List expressed admiration for how the American government protected its developing industries and trade with national tariffs. Not surprisingly, List favored using the same device for the benefit of his own people.
Although he is usually described as a German liberal, List’s program for a modern industrial economy recommended tariffs as a vehicle for ensuring both material progress and the strengthening of national bonds. List believed that modern nations like 19th-century America prospered under a tariff regime.
List was undoubtedly right about the American situation. In the U.S., tariffs have been an integral part of our national economic history, going back to the presidency of George Washington. Washington’s Secretary of the Treasury Alexander Hamilton managed to introduce three tariffs in the first three years of his administration, all of which the new American Congress approved. Hamilton’s “Report on the Subject of Manufactures” in 1791 called for the protection of American industries and boldly outlined what became the American approach to capitalist development.
Not only the Federalists Washington, Hamilton, and Adams, but later the Whigs of Henry Clay then the Republicans from their founding as a party in the 1850s, were ardent supporters of tariffs. Abraham Lincoln and all his Republican successors were advocates of high tariffs and labored to increase them to protect their party’s growing industrial base.
Significantly, in the 19th century the Democrats, who could hardly be characterized as free traders, pursued this practice as well. Tariffs were then the major source of revenue for the federal government and remained so until the passage of the 16th Amendment and the advent of the income tax in 1913. In fact, tariffs produced revenue equal to between 50 and 90 percent of what came as a result of the income tax when it was first introduced.
President Trump has praised William McKinley, who, like other Republicans of his era, advocated for high tariffs. Trump’s favorite president, however, would have had to compete with many other American leaders for the status of liking tariffs the most. The American free enterprise economy prospered in an age of unapologetic protectionism; and the two were viewed, except by some intellectuals, as entirely compatible. The U.S. surpassed both England and Germany as an economic powerhouse in the late 19th century, in an age of high American tariffs.
The Washington Post warns us that Trump’s tariffs are carrying our economy back to the Smoot-Hawley Tariff Act of 1930, which supposedly set off the Great Depression. Trump is laughably accused of repeating the sin of interwar Republicans by imposing tariffs on our trading partners. Supposedly, this disastrous mistake led to a tariff war that spread worldwide depression. This narrative, which amounts to an urban legend, was repeated by Ben Stein in his cameo as an economics teacher in the 1986 film Ferris Bueller’s Day Off.
In reality, the Great Depression started well before Smoot-Hawley was enacted; it began with a 1929 stock market crash and banking crisis here and in Europe. Moreover, Congress had passed two other tariff bills during the roaring and prosperous 1920s, neither of which set off an economic collapse. It is one thing to claim that Smoot-Hawley did nothing to relieve the economic problems of the 1930s. It is another to insist that it created the Great Depression or rendered it much worse.
Although I would never argue that tariffs are always, in all situations, economically beneficial, it is hard to see how they are extraneous to the development of capitalist countries. The two have usually gone together, except in abstract libertarian theories about what capitalism should be in an alternate universe. Also contrary to The Wall Street Journal’s sacred doctrines, there is nothing “unconservative” about tariffs, although they may not fit into the plans of neoconservative plutocrats who favor globalist, “free trade” agreements arranged by government leaders.
The late Milton Friedman was known to be a free trade absolutist who opposed tariffs even when our trading partners imposed high tariffs or engaged in dumping their wares on the American market. Although one can ascribe to Friedman consistency in upholding his principle, and perhaps the forensic skill to show how his principle would benefit us in a hypothetical long run, in a less hypothetical world things seem quite different. In the here and now, one can easily demonstrate the value of a judicious use of tariffs as a longstanding American tradition.
Allow me in closing, however, to cite the view of a truly principled, insightful defender of the free market, Murray Rothbard, who made the cogent case that “free trade agreements” typified by NAFTA have nothing to do with free trade properly understood:
In the first place, genuine free trade doesn’t require a treaty (or its deformed cousin, a “trade agreement;” NAFTA is called a trade agreement so it can avoid the constitutional requirement of approval by two-thirds of the Senate). If the establishment truly wants free trade, all it has to do is to repeal our numerous tariffs, import quotas, anti-“dumping” laws, and other American-imposed restrictions on trade. No foreign policy or foreign maneuvering is needed.
If authentic free trade ever looms on the policy horizon, there’ll be one sure way to tell. The government/media/big-business complex will oppose it tooth and nail. We’ll see a string of op-eds “warning” about the imminent return of the 19th century. Media pundits and academics will raise all the old canards against the free market, that it’s exploitative and anarchic without government “coordination.” The establishment would react to instituting true free trade as enthusiastically as it would to repealing the income tax.
Rothbard argued vigorously and effectively in his essay “The Myth of NAFTA” that what were sold as “free trade” agreements negotiated by the Clinton and Bush presidencies were just government deals that favored certain political actors. These deals lowered or removed tariffs while also making concessions to those doing the negotiating, for example, introducing affirmation action programs into Mexican factories and imposing detailed environmental regulations on the signatories.
The major effect of NAFTA, it seems, was the relocation of American factories to Mexico to take advantage of cheaper labor there. This move had a devastating impact on American workers, who required higher salaries than their Mexican replacements to maintain a decent living standard. In any case, this was not free trade, as Rothbard wisely reminded us.
“Free Trade” absolutely requires the OTHER nations to participate and to adhere to our interpretation of free trade. No one has tariffs. No one has restrictions. No one has subsidies. Think they will go along? I doubt it. Trump is trying to create a more level playing field — his tariffs are a response to their tariffs. But as it stands, the platonic ideal of “free trade” is not something anyone should seriously expect to see in the real world. It’s basically stupid to even talk about the thing because it’s not going to ever exist.
Free Trade is a myth, like the Easter Bunny.
Free Trade requires all national to have the same regulations, same economic levels, etc. That will never happen so long as there are people.
shrugs. as a young man, before i even followed politics, it was so obvious that Ross Perot was correct when he predicted the ‘giant sucking sound’ from Mexico, that i voted for him, not the globalist, uniparty gope.
when he lost, i became a conservative independent (ex democrat) and have fought and debated the so called ‘free traders’ and libertarians on this site and elsewhere ever since. not a lick of common sense in any of them.
You can’t have “free” trade with a country who pays $10 a week for labor. We can never compete. Thems the facts, as they say...
You can let them have certain cheap or low profit things we let them export it to you free, but you will LOSE every time on “free” trade for critical industries because we can never compete with $10 a week or even $10 a day labor...
Plenty of those free-traders on this site, also a lot of neo-cons, and anti Trumpers (although they have toned it down a notch not to get zotted)...
So “Free Enterprise” isn’t free trade?
The "libertarian response" is that cheap foreign labor ...
1. Uplifts foreign workers (a good thing).
2. Provides American consumers with cheap goods (a good thing).
3. Shifts American workers into more productive, higher-paying jobs (i.e., learn to code).
Thus, from a global utilitarian perspective, it provides for an optimum allocation of resources, both of capital and labor. Everyone benefits.
Well, that's the "libertarian response."
right. there were a lot of bushies around here. less now as time goes on. i think my ilk is having a small effect.
btw, i found/heard this site when i was protesting in the streets with the tea party, back around the time obie beat mccain. actually mccain beat himself when he tucked tail and made the deal with obie and bush 2.
That’s why I am not a libertarian. We already did that and it is killing the middle class. We learned to code and then they shipped those jobs to India and brought them here and made us train our “replacements”...
libertarians are open borders nitwits also...
I thought that was why Trump wants Fair Trade.
The writer is dishonest. The reason for tariffs in the first century of the republic is that there was no national banking system and it was about the only efficient way to collect taxes. Limited number of ports, a collector of customs sitting there waiting.
The 1950-60s gave us an oligopoly in auto production - Big Three and labor unions conspired to produce shitty cars and stifle innovation. Politically, a return to that so called Golden Era will return Rust Belt to Dem control because unions depend on special exemption from anti-trust laws to exist. Without foreign competition, the rest of the country is turned into a colony.
“Left versus Right” is a FALSE DICHOTOMY because politics, especially in the modern era, is far too complex to be represented in any meaningful manner by positions on a simple line.
bttt
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