In defense of free trade

October 10, 2016 By Gene Veith

As we’ve blogged about, both candidates are campaigning against free trade. Texas Tech economist Benjamin Powell defends free trade, examining the complaints both candidates are making. He concludes that importing goods from abroad and even trade “cheating,” such as China subsidizing its steel industry, makes Americans wealthier.

Is Prof. Powell right? Does he leave out some considerations? (more…)

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Both parties have abandoned free trade

September 30, 2016 By Gene Veith

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Whoever gets elected president will oppose free trade. In fact, both parties are rivaling each other in condemning trade agreements such as NAFTA (which forms a common market with Canada and Mexico) and the not-yet-ratified TPP (which eases trade with Australia and Asian countries other than China).

Such a turnabout is astonishing, since Republicans have long championed free markets and Democrats have come around to agree with them. Credit, or blame, for this new stance goes to the popularity of Donald Trump, who has roused the masses against American industries moving factories and jobs overseas and American products being driven out by cheaper imports.

I can see the appeal of a self-contained national economy, but getting there would seem to involve some dangerous tradeoffs. If we erect trade barriers such as high tariffs and our trading partners retaliate, won’t that be economically disastrous? American companies will suddenly lose a major part of their markets. Prices for consumers will skyrocket. After awhile, maybe new companies would take up the slack, but, in the short term at least, wouldn’t this cause recession and even more unemployment?

This is not my field, so I am open to instruction. (more…)

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Free trade with higher wage countries & the China card

May 15, 2015 By Gene Veith

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As Democrats make a political point of rejecting the free trade agreement known as the Trans-Pacific Partnership–to the point of defying the Democratic President–Charles Lane clears up the disinformation being spread about the treaty.

He says that, contrary to the rhetoric, it won’t lose American jobs by sending industries to lower-wage countries. Our biggest partners in this agreement, who would open their markets to us, would be Canada, Australia, New Zealand, and Japan. All of which pay higher wages than the United States! There are low-wage countries in the pact, such as Mexico and Peru, but we already have free trade agreements with them!

Also, in a column criticizing Hillary Clinton for being silent on a treaty she helped to create, Robert Kagan gives the underlying strategic reason for the Trans-Pacific Partnership: forging an alliance to counter China. (more…)

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Obama and Republicans lose on free trade bill

May 14, 2015 By Gene Veith

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A major priority for President Obama is the passage of the Pacific trade accord, a free trade bill that would open up markets in Asia. But a proposal to fast-track the treaty–allowing a single up-or-down vote, rather than risking death by a thousand amendments–was defeated in the Senate. All but one Republican took the President’s side, but all but one Democrat voted against him. The measure fell short of the 60 votes it needed. Lots of interesting issues here, which I raise after the jump.

UPDATE: A deal seems to have been struck that will give the bill another shot.

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And Now, “Freedom Conservatism”

August 8, 2023 By Gene Veith

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We’ve blogged about “National Conservativism” and its manifesto. Now the other kind of conservatism, the strain still committed to personal liberty and free market economics, has a manifesto and a catchy name: Freedom Conservatism.

For the background and the context of this effort, read this story in Politico by Michael Schaffer. The Nationalists’ document has 10 brief tenets, which I listed on my blog post. So does the Freedoms’ document, with the principles often paralleling and answering the rival document.

Here the 10 tenets of Freedom Conservatism:

Liberty. Among Americans’ most fundamental rights is the right to be free from the restrictions of arbitrary force: a right that, in turn, derives from the inseparability of free will from what it means to be human. Liberty is indivisible, and political freedom cannot long exist without economic freedom.

The pursuit of happiness. Most individuals are happiest in loving families, and within stable and prosperous communities in which parents are free to engage in meaningful work, and to raise and educate their children according to their values.

The foundation of prosperity. The free enterprise system is the foundation of prosperity. Americans can only prosper in an economy in which they can afford the basics of everyday life: food, shelter, health care, and energy. A corrosive combination of government intervention and private cronyism is making these basics unaffordable to many Americans. We commit to reducing the cost of living through competitive markets, greater individual choice, and free trade with free people, while upholding the rule of law, freedom of contract, and freedom of association.

Full faith and credit. The skyrocketing federal debt—which now exceeds the annual economic output of the United States—is an existential threat to the future prosperity, liberty, and happiness of Americans. We commit to building a constructive reform agenda that can restore America’s fiscal sustainability, ensuring that future generations inherit a more prosperous and secure nation than the one we now inhabit.

A nation of laws, not men. Equality under the law is a foundational principle of American liberty. Unfortunately, today this principle is under attack from those who believe that the rule of law does not apply to them. One manifestation of this problem is the explosion of unaccountable and unelected regulators who routinely exceed their statutory authority and abridge Americans’ constitutional rights. The President should only nominate policymakers and judges who are committed to upholding these rights.

Americans by choice. Immigration is a principal driver of American prosperity and achievement. America is exceptional because anyone—from any corner of the earth—can seek to live in America and become an American. Nearly all American citizens descend from someone who came here from somewhere else, and we must treat all citizens equally under the law. To this end, the United States, as a sovereign nation, has the right to secure its borders and design a rational immigration policy—built on the rule of law—that advances the interests and values of American citizens.

Out of many, one. The best way to unify a large and diverse nation like the United States is to transfer as many public policy choices as possible to families and communities. Much of the discord in America today comes from the fact that too many decisions are made for us by centralized authorities. The Constitution of the United States is the best arrangement yet devised for granting government the just authority to fulfill its proper role, while restraining it from the concentration and abuse of power.

America’s promissory note. Martin Luther King, Jr. described the Constitution and the Declaration of Independence as containing “magnificent words…a promissory note to which every American was to fall heir.” Prior to 1964, however, slavery and segregation were enforced by state governments and, in many cases, by the federal government. Many who descend from victims of this system now face economic and personal hurdles that are the direct result of this legacy. We commit to expanding opportunity for those who face challenges due to past government restrictions on individual and economic freedom. We adamantly oppose racial discrimination in all its forms, either against or for any person or group of people.

The shining city on a hill. American foreign policy must be judged by one criterion above all: its service to the just interests of the United States. Americans are safest and freest in a peaceful world, led by the United States, in which other nations uphold individual liberty and the sovereignty of their neighbors.

Freedom of conscience. Essential to a free society is the freedom to say and think what one believes to be true. Under the First and Fourteenth Amendments to the Constitution, federal and state governments have a legal obligation to uphold and protect these freedoms. Private institutions have a moral obligation to do the same.

Compare these 10 convictions to the 10 convictions of National Conservatism, which you can find here, more fully developed at the movement’s website.

This is, of course, a debate between what I have called “small government conservatives,” who want to limit government and maximize individual liberty and “big government conservatives,” who want to use government power for conservative social ends.

You will note that the Freedom Conservatism document says nothing explicitly about God and religion, though the signatories include a number of religious leaders. Whereas the National Conservatism document says much about God and religion, though, as we have discussed at this blog, much of that is theologically problematic. (See this and this.)

Shaffer makes the point that the Republican presidential candidates are pretty much ignoring the debate. But while they are certainly ignoring the theoretical debate that is roiling the conservative movement and claiming the label “conservative” without explaining what kind of conservative they are, you can certainly tell the difference in the policies they are recommending.

National Conservatism grew out of the Donald Trump phenomenon, an effort by conservative intellectuals to turn the “Make America Great Again” slogan and its related policy proposals into a coherent ideology. So Trump exemplifies National Conservatism, as does Ron DeSantis, who hopes to use government power to shut down the “woke agenda” in schools, businesses, and government.

Thus, Chris Christie, as a Freedom Conservative, is able to to claim that DeSantis, with his initiatives against big corporations like Disney, is “not a conservative.” He is, but not Christie’s kind of conservatism.

As for the other candidates. . . .Well, you tell me. I don’t know if any of them advocate free trade, traditionally a shibboleth for free market conservatives, given the hostility to China. Some, such as Nikki Haley, are arguably yet another kind of conservative: The “neo-conservatives” who promote aggressive military action to spread democracy.

Where do you think Tim Scott, Vivek Ramaswamy, and other Republican candidates would fit in with these ideologies?

More importantly, perhaps, if you are a conservative, what kind of conservative are you?

I myself have Free Conservative instincts, but I recognize that some of our cultural problems are so enormous and so consequential–such as life issues–that a laissez faire approach will not resolve them (indeed is responsible for them), giving me some sympathy for the National Conservatives. And yet I fear authoritarianism.

Help me out as I try to think through all of this!

Illustration by Linnaea Mallette, CC0, Public Domain via PublicDomainPictures.net

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Our Escalating Trade Wars

June 20, 2018 By Gene Veith

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President Trump had announced the imposition of tariffs on $50 billion worth of goods imported from China. So China retaliated by imposing tariffs on $50 billion worth of American goods. So now the President has upped the ante to $200 billion. China is saying that they will respond in kind. So the President is threatening that if they do, they will face tariffs on another $200 billion.

This is President Trump’s style, which we have seen consistently in his rhetoric and now in his policies. If someone hits you, hit back even harder. This applies to anyone who criticizes him and to his diplomatic strategy. He considers himself a master of “the art of the deal,” in the words of his book, and such tit-for-tat retaliation and all-in gambling are characteristics of his negotiation tactics.

We will see how well this works in the economic sphere. Arguably, the ever-escalating threats from both sides did bring North Korea’s Kim Jong-Un to the summit meeting with President Trump, though the outcome of those talks is not yet clear. Notice that despite his earlier hostile rhetoric against Kim, President Trump immediately softened his tone, to the point of seeming to praise the bloody tyrant. So we shouldn’t necessarily take the President’s over-the-top rhetoric at face value.

But in the summit meeting with our G7 allies, President Trump’s tactics were not well-received. While improving our relations with North Korea, the President hurt our relations with our allies, including Canada!

Though I posted about how hardly anyone talks about Hell anymore, I should have made an exception for the Trump administration and its consigning of Canadian prime minister Justin Trudeau to the everlasting fires. “There’s a special place in hell for any foreign leader that engages in bad faith diplomacy with President Donald J. Trump and then tries to stab him in the back on the way out the door,” said White House Trade Director Peter Navarro, who added that the sentiment “comes right from Air Force One.” In this case, what will incur eternal punishment is crossing President Trump.

But such fire and brimstone invocation of divine wrath, for which Navarro later apologized, was accompanied by the imposition of tariffs on Canadian steel and aluminum. Canada responded in kind, so now the Trump administration has announced a 10% tariff on automobile parts and a 25% tariff on assembled automobiles. Justin Trudeau, whom our president has made wildly popular, has said he will retaliate. Canada is our largest trading partner! Canadians are now organizing boycotts of American goods.

As that situation escalates, our other allies are on notice. If we have a trade imbalance with other countries, they too will have to pay! But are trade imbalances necessarily the fault of the countries? Aren’t our businesses and consumers the ones buying from them? Shouldn’t Americans be free to respond to market forces, such as lower prices? Won’t Americans be the ones who pay for these tariffs, through either passed-along price increases or by being forced to pay for higher-priced alternatives?

Do protectionist economic policies ever achieve their goals? Will they really protect American jobs if American exporters, including farmers and factory workers, lose their international markets?

Or do you think President Trump is just making threats to get concessions from these other countries, some of whom have trade barriers of their own? If so, do you think his tactics will succeed?

Illustration by geralt via Pixabay, CC0, Creative Commons

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