Sheep's Clothing and Adam Smith

World Net Daily ^ | March 13, 2006 | Vox Day

[antisocial]

Sheep's clothing and Adam Smith

-------------------------------------------------------------------------------- Posted: March 13, 2006 1:00 a.m. Eastern

By Vox Day

-------------------------------------------------------------------------------- © 2006 WorldNetDaily.com

How does one resolve the question of the presumably cataclysmic meeting between the hitherto immovable rock and the historically unstoppable force? Perhaps by reversing the logic of the famous question: "Who are you going to believe, me or your lying eyes?" Is the rock truly immovable? Or, alternatively, is the force actually unstoppable?

I mention this because I have long been a vocal advocate of free trade. I was raised on Adam Smith, inoculated against the usual collegiate flirtation with Marxism by controlled doses of Schumpeter taken in combination with "Das Kapital" and "The Communist Manifesto," and eventually found in the Austrian School of von Hayek, von Mises and Rothbard an intellectual home.

My first serious questions about the free-trade doctrine arose during the NAFTA debates. The fact that Democrats and Republicans were coming together in bipartisan support made me suspicious, as bipartisanship is a reliable sign that the American people are about to get screwed over in a big way, and it seemed very strange that a genuine free-trade agreement would require documentation exceeding the size of the average encyclopedia.

Thirteen years later, the honest observer is forced to admit that it is the opponents of NAFTA whose predictions have been proven to be correct. Free trade has not improved the Mexican economy enough to dissuade millions of Mexicans from coming to America, it has not improved the American wage rate and it has significantly reduced American industrial capacity. The base concept behind Smith's doctrine of free trade is a nation that stops protecting its inefficient sectors will turn its resources toward those sectors in which it has a genuine competitive advantage – apparently selling houses to each other is America's great strength.

Moreover, the recent history of the European Union demonstrates that free trade is the sheep's skin that clothes a very savage wolf indeed. The European Common Market was sold to the people of the formerly independent nations of Europe as a free-trade arrangement, and while it has not significantly benefited the economic welfare of those nations, it has managed to subjugate them to an unelected commission that rules over them, taxes them and from whose ever-more-invasive dictates they enjoy no appeal.

Can trade be free when the people aren't?

Now, it is certainly possible to argue that the free trade of the NAFTA variety is actually nothing of the sort and that the Third Way social engineering of the European Union is wholly distinct from the free-trade doctrine from which it was birthed. In fact, this is precisely how I have previously attempted to resolve the dilemma.

However, that reasoning is all-too similar to that of the public-school teachers who insist that merely spending more money on teachers will lead to better public schools, and socialists who argue that despite dozens of failed historical examples, the One True Method of communism has not yet been applied. At some point, even the most lovely theory has to pass the more prosaic test of practice or else be relegated to the children's nursery of daydreams and wishful thinking.

I am not arguing, yet, that it is time to do so with regard to free trade. However, for the first time in years, I find myself forced to re-examine the merits of this long-hallowed doctrine, and to do so with a jaundiced and critical eye. It is certain that there are false prophets of free trade – that they exist neither confirms nor denies that the god itself is false.

The deeper question is this: In a globalist world that denies not only the sovereignty of the nation-state, but even its right to exist, is there any fundamental relevance to a doctrine that is defined by the asserted benefit to the nation-state and its citizens? If there is no nation-state and there is no freedom for the individual, then where is the free trade and to whom does it apply?

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Vox Day is a novelist and Christian libertarian. He is a member of the SFWA, Mensa and the Southern Baptist church, and has been down with Madden since 1992. Visit his Web log, Vox Popoli, for daily commentary and responses to reader email.

[1rudeboy]

"missed the"

[Havoc]

Don't laugh, there are americans going across the border to Juarez, and they aren't sneaking.

[Mase]

I guess you consider 12 million illegal aliens that have invaded us to be one of the benefits?

Illegals existed before NAFTA and they exist after. As long as Mexico avoids undertaking free market reforms, their economy will not grow as it should and the wealth will continue to be maintained by the chosen few. NAFTA didn't cause 12 million illegals to cross our borders. A corrupt political system in Mexico and our government, who is unwilling to enforce our laws, is responsible for the problem.

Now, can you disprove the benefits I cited or do you admit that the author of this article is full of it?

[Citizen Tom Paine]

I have great conceptual difficulty with grasping the concept of "free trade". I recall a discussion from high school about making steel many years ago. (I grew up in Pennsylvania in a steel making region.) The question was could the existing steel industry in Pennsylvania (which paid higher salaries) compete with countries that paid lower salaries?

The answer was not how much a worker was paid, but how productive he was. A more productive higher paid worker could produce more goods that a lower paid one. The hooker in the reasoning was (is) that the industry with the higher paid workers had to invest more in their production methods to cancel out the difference in the cost of production.

I have never studied it, but I will give you odds that the capital spending in our heavy industries has decreased over the years putting the US at a competitive disadvantage.

[Mase]

If Mr. Day doesn't know that the fastest-growing economies in Europe at the moment are the new EU members, then . . . forget it.

They are also the most Nationalistic of all the EU members, which is another point lost on protectionists like Day and his supporters here at FR.

[1rudeboy]

I have never studied it, but I will give you odds that the capital spending in our heavy industries has decreased over the years putting the US at a competitive disadvantage.

Don't be so sure. Our current account deficit indicates that overseas money is flowing in. Where it is going is another matter.

[antisocial]

"I missed illegal-immigration section in NAFTA."

That was supposed to be one of its great benefits according to NAFTA's supporters.

[1rudeboy]

Yeah, it was pointed out that people will be less-inclined to jump the border for economic reasons when their home economy improves. It's not rocket science, you should get it.

[antisocial]

"A corrupt political system in Mexico and our government, who is unwilling to enforce our laws, is responsible for the problem."

Why would our government force NAFTA on us when it implicitly requires us to trade with several such CORRUPT governments and their representatives also get to help settle trade disputes?

[antisocial]

Their economy should improve when the massive corruption is rooted out of their government.Not likely to happen, it's not rocket science, you should get it.

[Mase]

Why would our government force NAFTA on us

NAFTA was forced on us? It passed both the House and Senate and was signed by the President. If NAFTA has been so bad and was forced on us by our government, why is it protectionists rarely win elections?

it implicitly requires us to trade with several such CORRUPT governments..

Less government interference in trade creates greater transparency and less opportunity for corruption. Greater economic freedom correlates directly to increases in wealth and personal liberty.

and their representatives also get to help settle trade disputes?

Are you referring to the WTO that was established by GATT and passed by a two-thirds vote in both the House and Senate? Who would you want to settle trade disputes? Somebody has to have the authority to rule that you're cheating. You seem to believe that NAFTA has been bad for our economy. Can you tell us where?

[1rudeboy]

Their economy should improve when the massive corruption is rooted out of their government.Not likely to happen, it's not rocket science, you should get it.

Yes, much like we will solve the illegal immigration problem when we start enforcing our laws instead of complaining about NAFTA, which you do not get.

[Marxbites]

It's purely the work of progressives whose policies they borrowed from the marxism ruse wielding euro-dictators starting with Bismark. They were in awe of the "progress" these authoritarians exacted from their subjects.

American corporations are among the world's most highly taxed. Like Senators, they all have to line up for Govt subsidy or risk retribution from voters or shareholders, but only because Congress has now the power to pick the winners or losers of Govt largesse.

When progressives achieved the reinterpretation of the Constitution (genl welfare & commerce clauses) via judicial fiat, they criminally gave Congress the right to spend on whatever would keep them elected. Their reelections were bought with campaign contributions from industry and labor in exchange for special Govt favors, with heavy doses of media and intellectual class propaganda aimed at the unwashed whom they had convinced that that scapegoat capitalism, was the source of all their problems. That society and the economy could be regulated and run by the "truly knowledgeable" experts just like a well oiled factory using the latest techniques and efficiencies. The Marxist delusion being that society is not a collection of like minds and tastes but of individuals so varied no Govt could ever know the combined wisdom of them, or the choices they'd make. The actuality is that Govt has been the primary source of almost every nosedive our economy ever took.

As Reagan always said, "Govt IS the problem".

The American economy of free choice has always done exceedingly well in the laissez-faire periods of low regulations, tarriffs and taxes; always. Everything Govt does outside of protecting our freedoms, not only always costs way more than the benefits, but it denies that capital spent that was produced by it's citizens to them. A double, if not worse, blow to one's ability to persue happiness. Blows the Founders, in our Constitution, originally saw fit to it to protect us from.

Elites were to blame for the "progressive" mindset and propaganda that reelected FDR. The European banking cartel that backed Rockefeller/Morgan had also backed both sides of WWI and the Russsian revolution. They reached their main goal with the creation of, and stock ownership controls in, the Fedl Reserve in 1913. Our first step to an inflatable fiat currency, along with the new income tax, that would help pay to make the fortunes made off WWI war production and supply. Wilson was their bought boy just like FDR. It has never been explained to me, other than outright theft, what exactly was the rationale for FDR's confiscating the citizen's gold? Eventually after trading their gold in for gold certificate notes under threat of imprisonment, they were supposedly redeemable when the "crisis" passed for the same value of gold they turned in, but they became unredeemable for gold. FDR arbitrarily then raised the official price of gold Govt now held all of, and in the same stroke, inflated and depreciated the dollar, and rolled the presses for the vast expansion of Govt's size and power and the spending to come for the war that WWI made inevitable, as if almost by design.

[TopQuark]

More doubt about "Free Trade"

WHere specifically did you see doubt? I could not detect a thought, a datum, or any such thing. Just rambling....

[hedgetrimmer]

Thanks for the heads up. I hadn't seen it and it appears that some eyes may be opening. Good find!

[hedgetrimmer]

We have created more than 20 million jobs for the 30 million illegal aliens that live here.

[hedgetrimmer]

Who would you want to settle trade disputes?

Congress, not the WTO.

[hedgetrimmer]

It passed both the House and Senate and was signed by the President.

A law passed by both the House and Senate and was signed by the President, for your edification:

Eighteenth Amendment
Amendment Text
Section 1. After one year from the ratification of this article the manufacture, sale, or transportation of intoxicating liquors within, the importation thereof into, or the exportation thereof from the United States and all territory subject to the jurisdiction thereof for beverage purposes is hereby prohibited.

Section 2. The Congress and the several States shall have concurrent power to enforce this article by appropriate legislation.

Section 3. This article shall be inoperative unless it shall have been ratified as an amendment to the Constitution by the legislatures of the several States, as provided in the Constitution, within seven years from the date of the submission hereof to the States by the Congress.

Where is it now?

[Mase]

Congress, not the WTO.

Because Congress is so much more efficient, objective and less susceptible to corruption? LOL

It's good to know you haven't lost your sense of humor.

[hedgetrimmer]

"free trade" ping