Posted on 03/09/2018 5:41:32 AM PST by Oklahoma
Whenever you hear any of these arguments against free trade, you will have answers. The arguments against free-trade all have this in common: they rely on coercion by the government. All of them rely on a concept of the legitimacy of government agents with badges and guns who have the moral authority and legal right to stick a gun in the belly of one or more people who want to make a voluntary transaction. The government tells these people that they do not have the moral right or the legal authority to make such a transaction.
Think of two men: Jones and Smith. Jones wants to make a voluntary transaction with Smith. Brown is in competition against Smith. He does not want Jones to have a legal right to buy from Smith, because Smith offers lower prices, better quality, or some other advantage which Brown either does not want to offer or is not in a position to offer.
Brown goes to the government and demands that Smith not be allowed to make this offer to Jones. He does so in the name of national prosperity. He persuades the government that any price-competitive offer from Smith to Jones will reduce the wealth of the nation. Therefore, he insists, the government has to send out someone with a badge and a gun to stop this kind of trade.
There is one other factor: an invisible line, called a border, which separates Jones and Smith. It is a legal border. It regulates who gets into the country, or who has a right to vote in the country, or who has the right to stay in the country.
In this case, Jones lives in the United States. So does Brown. Smith lives in Canada.
Certain borders in the United States and in most countries have no economic relevance to trade. Borders between counties have little or no economic relevance. Borders between states have little or no economic relevance. In fact, the Constitution of the United States was written by a group of participants who specifically had been assembled in Philadelphia in order to deal with the question of tariff barriers between states. The 1786 Annapolis Convention had been called to deal with this. It had failed. The Philadelphia Convention was the follow-up meeting. This is why the Constitution prohibits any tariffs established by state governments. The United States is a gigantic free-trade zone. It is unconstitutional for any state to impose tariffs against the imports from other states.
The only state border that is guarded is California's, and the justification for this is the protection of California agriculture from fruit flies and other bugs that might be attached to agricultural products that people carry in their cars into the state. This justification is entirely bogus. The border patrol system is the remnant of an illegal restriction on people from other states coming into the state during the Great Depression in the mid-1930s. The Supreme Court declared these restrictions unconstitutional. But, once the border patrol set up the restrictive barriers, it did not want to take them down. Those people wanted to keep their jobs. So, the legislature invented a new excuse for restricting entry into the state: fruit flies. The border patrol people all kept their jobs. The bureaucracy still exists 80 years later -- a welfare program.
Tariff barriers and other import quotas that are established for any purposes other than revenue generation assume that the invisible line known as the national border is completely different, economically speaking, from all of the other invisible lines, also called borders, that exist inside the nation. No one accepts any of the arguments for restricting trade across the internal borders. Yet they accept these arguments with respect to national borders.
These articles detail the economic reasons why arguments in favor of restrictions on voluntary trade across the invisible lines known as borders are invalid from an economic point of view. These pro-tariff arguments are deceptive. They lead to policies which reduce most people's freedom, and most people's wealth.
Most of these arguments have been around for well over two centuries. Most of the arguments in favor of restrictions on trade have been around in the West for over 300 years. They promote a system called mercantilism.
Adam Smith became famous in 1776 for his arguments against mercantilism. His book, The Wealth of Nations, is a treatise against tariffs and import quotas. Nevertheless, millions of people who claim to be defenders of the free market, and who think they are followers of Adam Smith, hold exactly the positions that Adam Smith wrote his book to refute. It is one more case of self-interest and bad economic logic combining to confuse millions of voters.
Still, on the whole, the arguments in favor of free trade since 1960 have been persuasive in the United States. Most of the tariff barriers have come down. Most of the import quotas have come down. Democrats and Republicans have generally agreed that free trade is better for America than managed trade, at least with respect to imports.
Congressmen believe in mercantilism with respect to government subsidies for exports. This is completely illogical economically, given the case for free trade.
There is still managed trade by international bureaucracies, most notably the World Trade Organization. Another one is NAFTA. These organizations are not in favor of free trade. They are in favor of bureaucratically managed trade. I am not a defender of these organizations.
If you think you have an argument in favor of tariffs, send it to me. I will use it to write another article. There are always more bad arguments against free trade that I have failed to cover. But most of them are variations of a handful. They all boil down to this: "Government agents with badges and guns make us richer by restricting our choices."
Yawn...
No, we can’t agree to that, because American workers and their jobs are not the priority of the bipartisan establishment that is beholden to its corporate donors. [...]
So, if tariffs on unfair steel and aluminum competitors are a bad idea, what is a good idea? How do you propose to solve the problem, and continuing to ignore it is a NO-GO. What is your idea that results in an end state where U.S. manufacturers face exactly the same obstacles to entry into foreigners’ markets as they face entering ours?
[...] If there is a better tactic that will actually achieve the goal of exactly equal footing between our workers and the foreigners, cool. I want to hear it. Tell me exactly what it is. I get tariffs. “You hurt us, we hurt you” – I get that. So do the voters. But if there’s a better idea, let’s hear it. I don’t like tariffs – give us an effective alternative.
But we haven’t heard anything but demands we unconditionally return to the unacceptable status quo, and how the economy is going to collapse because a beer can will cost another penny. Somehow, I am unconvinced about these hypothetical risks. What is not so hypothetical are the devastated communities throughout the Midwest.
THIS!
That seems like the inevitable consequence of a true “free trade” scenario.
We almost had a Civil War in the 1830’s because of tariffs. The North wanted to force the South to buy their goods from northern manufacturers rather than from Britain or France. Cotton farmers were selling tons of cotton to Europeans before the war and many preferred to buy overseas goods in return. Remember the Nullification Crisis?
The founders most certainly did care about the political principles involved with trade and they weren’t all on the same page. To say they were all protectionist is ludicrous. The trade between the states while the Articles of Confederation was in effect is really a separate question but it showed that trade barriers between the states was counterproductive. In fact barriers to trade are nearly always counterproductive.
The steel industry has made over 3 Billion with a B Dollars the past couple of years and isn’t in any financial difficulty. Why do they need help? And before you say it will put steel workers back to work remember that today’s mills have been subject to automation and no longer require the massive amounts of workers it once did.
Your opinion of Goldwater says a lot about your political philosophy.
Ricardo’s Theory of Comparative Advantage discounted wage differentials, but the gap in perceived value of human life is no trifle.
Theoretically we could remove all stateside government intervention in pensions, wages, OSHA, health insurance, etc. (and I will grant that they are too high stateside).
But do we really want to compete with the likes of China in their regard for human rights?
The obvious point he was making is that both income taxes and tariffs are taxes and that to the extent we need to collect revenues, he would prefer that be more by tariffs and less by taxes. I happen to agree with him and no I don't want a pony.
I am generally a Goldwater fan, but promoting some abstract idea of "liberty" at the expense of national sovereignty should be out of the question for anyone who calls himself a conservative.
Amen! The "freedom" of corporate globalists to further fatten their wallets by gutting the American middle class is antithetical to conserving America.
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