Free trade to the founders did not mean low tariffs and quotas. Free trade meant a merchant could sell or buy wares in any country. Under the British Empire, the colonies were restricted in terms of where they could sell their tobacco, cotton, naval stores and other exports. Plus they were restricted as to where they could buy goods.
The founders used tariffs to build and industrial nation. in the 19th century, tariff on imported goods were high, protecting developing US industry from price competition and dumping by the more developed European nations. Had modern tariff policies (since 1990) been in effect in the 1800’s the US would not have developed the largest and strongest economy in the world.
The US is blessed to have the size, population, and resources to develop and sustain an independent economy. Few nations are so blessed. The founders and early policy makers grasped this fact and used tariffs, along with two large oceans, to keep the US independent as it was growing.
The current low tariff policies only serve to support the globalist socialist state agenda. Twenty-five years of modern free trade theories have resulted in the deindustrialization of the economy, declining standards of living for the American worker, the death of a large middle class, the decline of job creating small business, and rising income disparity. The only beneficiaries are foreign workers and companies, Wall Street bankers, and executives at multinational companies.
Trump knows that to make America great again we need to raise tariffs, rebuild our manufacturing base, and return to self sufficiency.
The consumer did not benefit as the marginal cost reduction from exploiting coolie labor was not passed on to the retailer and hence it went to the bottom line. Therefore international stock holders were also beneficiaries of unrestricted, no duty, access to US markets. I hope it is not too late....
“The US is blessed to have the size, population, and resources to develop and sustain an independent economy. Few nations are so blessed”
Fabulous Post. Absolutely dead on.
Many times I hear Libertarians ridiculing the notion of protectionism by using absurd examples - “should I have an import duty around my house?” - which is disingenuous at minimum and fraudulent at worst.
The fact is there is some optimal size for a trade group. Thousands of years and thousands of attempts have been made at this. All empires are an example.
Most fail because they get too big. Others fail because they were too small and stayed that way - look at the economies of the Central American countries. Tariffs between those countries is a joke.
So there is some optimum where a group of political entities - “states” - have it just about right: free trade among themselves, with virtually all goods needed being produced within the zone.
Once connected to the Pacific, the United States became that place. The Founders understood that future and certainly guys like Seward understood it - you can read his speeches on the admission of California for a sense of that.
“The current low tariff policies only serve to support the globalist socialist state agenda. Twenty-five years of modern free trade theories have resulted in the deindustrialization of the economy, declining standards of living for the American worker, the death of a large middle class, the decline of job creating small business, and rising income disparity”
Absolutely true. These are trade policies that benefited only the other nations, and a few transnationals. And as I noted above to Liz, there were other social motivating factors: gotta cut the whites down to size, ya know? Too powerful, too successful.
This is the rhetoric of the losers. Resentment of others success being the justification for looting as reparations.
World trade now is sold as “social justice”, and of course opposition is bought by huge rewards to the banker/ceo classes. An unholy alliance if there ever was one.
No nation simply walks away from its means of sustenance, no matter how many pithy lines from Bastiat that you can quote. While protected industries can lead to stagnation, and Japanese cars showed just how far off the deep end Detroit really was, it doesn’t mean that you throw in the towel and abandon all hope. You modify and change, and enable domestic competition.
Absent that, and in the face of aggressive, ruthless, state supported competition, you will end up losing it all very quickly, and being dependent on unfriendly faces for pretty much everything.
Very well said.