Ok, if you say so. The case for free trade is a moral one. How beneficial free trade is remains secondary. Free trade simply means that every citizen of every country is free to trade with any citizen of any country. The alternative to free trade is protectionism. If you oppose free trade then you endorse protectionism which is nothing more than support for government intervention. Protectionism is a form of isolation and Buchanan's idea of American First is a fortress America scheme he believes can protect us from competition in the global marketplace and, at the same time, maintain a prosperous nation. Pat, like you, must know what trade is good and bad for us and believe that people can be controlled accordingly.
I find it comical when "conservatives" here rail on the size and influence of our inefficient and corrupt government but, when it comes to trade,(and outsourcing for that matter) all of a sudden our government becomes responsible, capable and reliable. No one ever accused protectionists of being consistent.
the rival school of economic nationalism, which is more accurately labeled as "strategic economics"
Once again government becomes capable and reliable in determining which industries and products will receive protection, how much protection is needed and how long the quotas or tariffs will remain in place? Spare us from the the term strategic economics. This is nothing more than a euphemism for more government control of the economy. If you support restricting trade, where does the restriction end? Statism?
In the US in the 1790s, the brilliant first secretary of the treasury, Alexander Hamilton, laid out a programme for the industrialisation of the country by means of infant-industry protection and other policies.
Infant-industry protection is to be extolled? Once again you prove to us that you believe government officials can pick the optimal industries in which to invest scarce capital better than business people can. Do you doubt that government officials will favor industries that are politically connected or that are successful in other countries, often with some kind of prestige, which may be entirely inappropriate in the protected country? Where's the incentive for the infant industry to grow up? So much for comparative advantage.
Even John Stuart Mill, who once supported this argument, changed his mind and argued vociferously against it. Another one time supporter, Henry Sidgwick, said this about infant-industry protection:
the gain that protection might bring in particular cases is always likely to be more than counterbalanced by the general bad effects of encouraging producers and traders to look to government for aid in industrial crises and dangers, instead of relying on their own foresight, ingenuity and energy
Like Britain, the US protected and subsidised its industries while it was a developing country, switching to free trade only in 1945.
The push for free trade began in Britain in the early 19th century and was in full swing from the mid-19th century until just before WWI. Britain flourished during that time but as government took more control of the economy, by abolishing free market policies, the British empire rapidly declined. Here at home, the truth is that we have had periods of free trade and periods of protectionism. We have prospered over the years in spite of protectionism.
Since 1945, thanks in part to wanting to build the world back after WWII and in part to Smoot-Hawley, we have become a nation that embraces free trade. In that time we have have become the locomotive for the world economy and have seen our real private wealth increase from $6 trillion in 1945 to more than $54 trillion today.
Like 19th-century Britain, 21st-century America tells countries that are trying to catch up: do what we say, not what we did."
Nonsense. We understand that there is a direct correlation between the level of economic freedom a country practices and its per-capita GDP, standard of living and personal liberty. The Heritage Foundation issues an annual report that makes this point very clear. More on that here.
As shown in the Index, free countries on average have a per capita income twice that of mostly free countries; mostly free countries have a per capita income more than three times that of mostly unfree and repressed countries. (See Chart 1) This relationship exists because countries that maintain policies that promote economic freedom provide an environment that facilitates trade and encourages entrepreneurial activity, which in turn generates economic growth.
I have always found it immoral to preach free trade, when the rest of the world does not go along, or merely gives it lip-service.
How beneficial free trade is remains secondary. Free trade simply means that every citizen of every country is free to trade with any citizen of any country.
There is no bar to them in a protectionist general revenue tariff structure. Which the supposedly "inefficient" Federal government seems to have imposed pretty damn well, since we had all those embarassing governmental surplusses.
The alternative to free trade is protectionism.
By whatever name. It is a realistic necessity to counter those who tilt the playing field, and it is a better, and more moral tax system that should be used to eliminate the unfair system of income tax, corp. and personal, and capital gains.
If you oppose free trade then you endorse protectionism which is nothing more than support for government intervention.
Fuzzy logic. Free trade is supporting government too. Even more so. Now you are supporting 50 enemy governments...and undermining our own country. H'mmm...
Protectionism is a form of isolation
Nope. Hamilton designed it, and he wasn't isolationist in the slightest degree, nor the system he implemented.
I find it comical when "conservatives" here rail on the size and influence of our inefficient and corrupt government but, when it comes to trade,(and outsourcing for that matter) all of a sudden our government becomes responsible, capable and reliable. No one ever accused protectionists of being consistent.
A'hem. See above point about the embarassing surfeit of governmental surplusses. SO actually this point turns against you..."no one every accused free traders of being consistent."
Infant-industry protection is to be extolled? Once again you prove to us that you believe government officials can pick the optimal industries in which to invest scarce capital better than business people can. Do you doubt that government officials will favor industries that are politically connected or that are successful in other countries, often with some kind of prestige, which may be entirely inappropriate in the protected country? Where's the incentive for the infant industry to grow up? So much for comparative advantage.
Don't faint. I agree these are all respectable points. What I am advocating however is a general revenue system, and don't feel we need to have the kind of more-active seed-corn stuff that some have engaged in the past. And it is primarily for shifting from a system which currently punishes American production, investment, and savings. To a system which rewards these. Not picking any winners or losers. Just restoring the word United to the United States.
The push for free trade began in Britain in the early 19th century and was in full swing from the mid-19th century until just before WWI. Britain flourished during that time but as government took more control of the economy, by abolishing free market policies, the British empire rapidly declined.
Actually, this is seriously erroneous historicism. A more accurate rendition of British trade practice history is recounted below by William R. Hawkins:
As McGill University political science professor Mark R. Brawley has argued in regard to the attempted establishment of international order, “the liberal rules [that] the leading state creates seem to diffuse economic power out of that country and into others, undermining the leader’s own position.” (Liberal Leadership: Great Powers and Their Challengers in Peace and War, Cornell University Press, 1993.) “Relative economic decline is explained through the success of the liberal leader’s capital-intensive sectors in exporting captial-intensive goods and services,” writes Brawley, as this “allows capital to be accumulated elsewhere.” This is what is happening as American (and other foreign capital) flows into China to build production capacity, which is then supported by exports that destroy the home industries of the countries where the foreign capital originated.The decline of England has always been a favorite for this kind of analysis. As the prominent commercial lawyer and judge Lord Penzance warned in 1886, “The advance of other nations into those regions of manufacture in which we used to stand either alone or supreme, should make us alive to the possible future. Where we used to find customers, we now find rivals....prudence demands a dispassionate inquiry into the course we are pursuing, in place of a blind adhesion to a discredited theory.” The “discredited theory” to which Lord Penzance was referring is “free trade.” England had adopted this doctrine when it had a substantial lead in the Industrial Revolution and wanted to open foreign markets for its exports. But as conditions changed, its leaders clung to policies that no longer fit world affairs.
British historian D.C.M. Platt [Finance, Trade and Politics in British Foreign Policy 1815-1914, Oxford University, 1968] has argued that the leaders of Victorian England were so devoted to “free trade” that they were willing to sacrifice their direct interests to this intellectual ideal. Another British historian, Keith Robbins [The Eclipse of a Great Power: Modern Britain 1870-1975, Longman, 1983] has written, “To a few contemporaries, this devotion was perverse. It seemed obvious that the world was not following Britain’s Free Trade example. Germany introduced a measure of protection in 1879, France in 1882 and the United States in 1883 and 1900....But there was no British retaliation.”
The failure to adapt in a dynamic world is a central weakness of thinking bound by ideology; i.e., the belief that some doctrine is so perfect that it fits all times and places. Such blind faith can lead people to reject another idea they know will work, because it does not fit their misplaced “values.” For example, the Indian historian Partha Sarathi Gupta [Power, Politics and the People: Studies in British Imperialism and Indian Nationalism, Anthem Press, 2002] cites a 1915 memo from Ernest Low, secretary to the Viceroy’s commerce department, which acknowledged, “The public...have a policy [of protectionism] on the theoretical advantages of which a large section of them are unanimously agreed; which has been tried in many countries and can point to a considerable measure of success.” To head off the rising call for action, Low proposed a “committee of enquiry,” but one so rigged that “all questions relating to protection be ex hypothesi excluded....the enquiry will concern itself only with the examination of the alternative policies.” Low advised this course even as other voices were “pointing to the danger of ‘subsidised Japanese manufactures’ capturing the Indian market while Europe was at war,” according to Gupta. Low would feel right at home in the Bush administration.
World War I was too big a dose of reality for the free traders to deny. In 1917 the Imperial War Cabinet adopted a resolution calling for a system of trade preferences within the British Empire, concluding, “The time was arrived when all possible encouragement should be given to the development of imperial resources, and especially to making the Empire independent of other countries in respect of food supplies, raw materials and essential industries.” This was to be done by using tariffs to protect producers within the empire from outside competition. The new principle was first incorporated legislatively in 1919. Gupta notes, “Except for the Manchester Chamber of Commerce [long the center of the free trade movement], all other chambers of commerce seemed to think that a new international economic arrangement, not based on free trade, might become necessary.” As previously mentioned, most European nations had already abandoned their flirtation with free trade before the war.
However, after seventy years of Free Trade, England's decline had progressed too far to be easily reversed, though some improvement was made. Non-Empire imports had been cut from 22% of England's GNP in 1913 down to 10% by 1938. Yet England still found its industrial base inadequate in the face of the revived threat from Germany under Hitler. Without the support of American finance and industry, England would have found itself bankrupt and unable to further resist the Axis in 1942.
Today, the United States has no one to back it up if it falters. The Bush Administration has followed an activist foreign policy, while ignoring the deteriorating international position of the American economy upon which the nation’s power depends. It was clear from President Bush’s statements during the visit of President Hu, that the White House is still gripped by an ideology that prevents it from taking action to contain the Chinese economic threat that is shifting the balance of power in world affairs.
The proper role of “ideology” is not in limiting the means, but in setting the ends to be pursued. The proper end of U.S. international economic policy is the preservation of America as the preeminent world power, with the largest and most advanced industrial economy, supported by sound and sustainable finances. Policies are tools to be used in shaping the desired outcome. It is long past time for U.S. policymakers to return to traditional thinking on trade and foreign investment. They must limit the first and guide the second so as to maintain American advantages and limit the rise of rivals.
Since 1945, thanks in part to wanting to build the world back after WWII and in part to Smoot-Hawley, we have become a nation that embraces free trade. In that time we have have become the locomotive for the world economy and have seen our real private wealth increase from $6 trillion in 1945 to more than $54 trillion today.
We already were the main dynamo in the early 1900s. And the average American relatively very well off compared to our rivals. And, gee, seems to me we were protectionists...