Influences: Protectionist Conservatism?
Sorry folks, only one book tonight. The Great Betrayal by Patrick J. Buchanan
Many people remember Buchanan’s “Culture War” Speech at Houston at the
1992 Republican Convention. In fact, it was probably the most memorable
convention speech since Barry Goldwater in 1964. We remember the jibes
about which side of the Sexual Revolution stood the Clintons, we
remember the imagery of the L.A> Riots invoked to symbolize the
cultural struggle, the call to “take our country back.” What few
remember was the touching call to a “conservatism of the heart” (8
years before compassionate conservatism). This conservatism of the
heart meant shaking the hands of factory workers, with tears in their
eyes- pleading for Pat to “Save our Jobs”.
Pat was formerly a free trader. Like many Cold War conservatives he
had read Milton Friedman and believed. However, after seeing the
blue-collar middle class being gutted by free trade policies Pat began
to question the morality and utility of a global economy that reduced
Americans to mere consumers. He also questioned the wisdom of
Free-Traders who thought it “made no difference” whether a nation
manufactured “computer chips or potato chips.” Buchanan’s response is
that we don’t build our smart bombs with potato chips. Trade can mean
dependence.
Pat also shows that Free Traders, like Cobden sell utopian dream
along with their free trade bills. The history of the British Empire is
enough to dispel such notions. The U.K. went to war with its largest
continental trading partner: Germany. Buchanan also proves that
protectionism was a part of the American economic policy from the days
of Hamilton until WWII - making us one of the most powerful nations on
earth. He also, using libertarian sources dispels the myth that the
Hawley-Smoot Tariff caused the Great Depression.
It is
impossible to summarize all the charts and graphs and anecdotes that
Buchanan uses to illustrate that “Free trade isn’t free” – that we are
not a “consumerist commune” and that there is more to economics than
cheap goods at the mall.
On the fallacy that what is best for the consumer is best for the country:
George Washington and Alexander Hamilton, entrusted with leadership of the infant republic rejected the idea of letting consumer preferences shape the national destiny. ‘A free people… should promote such manufactories as tend to render them independent on others for essential, particularly military supplies,” said Washington. Nor was James Madison content to entrust America’s destiny to consumer whims when he discovered British ships dumping goods in U.S. ports to kill the industries begun during the War of 1812. Madison imposed a protective tariff. The economic nationalists who built America did not permit alien ideologies to prevent them from doing what was best for the nation…
Small nations like Austria or Singapore may never again be self-sufficient. but great nations like America, blessed by Providence with virtually all it needs to stand alone, have no excuse for allowing dependency to grow to the degree it has.
Putting consumption first goes against the grain of common sense, as well as inherited wisdom. Before consumption comes production. Before production, investment. Before investment, savings. And before savings, income - the reward for work. Before a family consumes bread, a farmer must plow the ground, sow the seed, till the field, wait and watch. Before an athlete becomes a champion, he must exercise, train discipline and deny himself. No athlete ever consumed his way to an Olympic medal; and no nation every consumed its way to greatness or prosperity. As Aesop’s fable of the ant and the grasshopper teaches: he who puts consumption first has put his foot on the road to ruin
On the fallacy that peace follows trade:
The great trading nations of history also seem to have been the most warlike. Free-trade Britain in the nineteenth century was involved in more wars than any other nation, and the nineteenth century’s bloodiest war was fought inside the world’s greatest free-trade zone- the United States of America.The last words of the book:
In August 1914 Germany attacked Russia, to whom she sold more goods than to any other nation, and Britain declared war on a Germany that was Britain’s greatest Continental customer.
In the thirties Japan’s principal overseas trade was with China and the United States. Tokyo attacked both,. And when Hitler turned on and invaded Stalin’s Russia in 1941, he was attacking German’s principal source of food, oil, and raw materials.
“Free trade! What is it? Why breaking down the barriers that separate nations; those barriers behind which nestle the feelings of pride, revenge hatred, and jealousy, which every now and then burst their bounds and deluge whole countries with blood.”
So said Cobden. History says otherwise.
The ideas in this book have to do with closing the divisions and easing the tensions in society that emanate from the economic order. They do not address the stresses rooted in the divisions of religion, culture and race. But re-creation of a just economic order is a pre-requisite of the restoration of the moral order. When all the members of society prosper together, when property and wealth are more equitably shared, when a man can raise a family again on the sweat of his own labor, when Americans begin anew to put their own country and countrymen first – as natural law teaches we must- those tensions will ease as well.
There are many who say there is no turning back, that the Global Economy is inevitable, that the death warrant of the nation-state has been signed, and that there is to be no reprieve. I do not believe this. It is vital that we not surrender this fortress of freedom, liberty and human dignity that our ancestors died creating. I do not want to live in their brave new world; if it is coming, let us stand our post. And if indeed, as James Fitzjames Stephens wrote, “The waters are out and no human fore can turn them back.. I do not see why as we go with the stream we need sign Hallelujah to the river god.” We can take our country back; and God willing, we shall.
Michael Brendan Dougherty
in Under the Influences
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Reader Comments (7)
A moral argument for protectionism is also the most expansive moral argument, because it claims that everyone in a society is obliged to balance the economic goods of others with their own desires. Mr. Buchanan might have put it more precisely had he said that the re-creation of a just economic order is part and parcel of the restoration of the moral order. But only people raised to practice self-denial and an old-fashioned discipline could see the value in such an order.
I agree with Mr. Luse that the moral order would have to be restored first. It is impossible to convince people of the greater importance of social and moral goods over economic benefits until they believe that they have profound obligations to others. They also need to conceive of economic activity as work that fulfills needs rather than desires and as something that is aimed at the common good.
If economic efficiency does not really recommend protectionism (and how could it, when it is a concept designed to vindicate unfettered markets?), Mr. Buchanan's argument for protectionism as a way to avoid international entanglements is far more compelling. Global trade is a sure-fire way to make sure that the next big conventional war will be a truly global war, more widespread than anything we have ever seen. Trading nations have a legitimate right, legally speaking, to attack countries that threaten their economic lifelines through embargo, which provides the state with many more occasions to mobilise and control society. The non-interventionist leg of paleoconservatism is reason enough to pursue a more restricted trade policy.
Protective tarrifs not only prevent the dumping of cheap goods on the American market- but also tarriffs can be used to shift the tax burden off American production. It is also, by definition of progressive tax.
Here is a standard rational choice definition of economic efficiency:
"Economic efficiency makes use of monetary evaluations. It refers to the relationship between the monetary value of ends and the monetary value of means. The valuations that count are, consequently, the valuations of those who are willing and able to support their preferences by offering money.
From this perspective a parcel of land is used with maximum economic efficiency when it comes under the control of the party who is willing (which implies able) to pay the largest amount of money to obtain that control. The proof that a particular resource is being used efficiently is that no one is willing to pay more in order to divert it to some other use."
(Paul Heyne, Concise Encyclopedia of Economics)
http://www.econlib.org/library/Enc/Efficiency.html
For many economists, especially those traditionally or conventionally on "our" side in economics debates (libertarians, Austrians, etc.), value is integrally tied into efficiency to the point of tautology. In answering the question of what is most efficient, they say it is what is most valuable, and vice versa. Both are defined in terms of maximising return at minimal cost measured in money. Their system cannot measure, and is not interested in, other costs incurred in the course of maximising return. Other goods, be they social, moral, cultural, become valuable only when someone is willing to front the cash to protect them. Protectionism is based on the assumption that economic policy should take account of at least some of those other costs--from the perspective of most economists, then, protectionism cannot be economically efficient. It clutters the pursuit of highest value with all sorts of other concerns that create, by definition, inefficiencies. What is more, I suspect that they think protectionists do not make principally economic arguments.
If we want to make economic arguments for protectionism, we also must get away from the language of "economic growth." This growth is the expansion of GDP, and this is what it will mean to almost any economist. (Protectionism would measure its economic success in terms of national self-sufficiency rather than growth.)
It is axiomatic in 'creative destructivist', or simply destructivist (the opposite of protectionist, I suppose), circles that expanding GDP is a sign of economic health, essentially regardless of how it happens. (Thus America can possess the export profile of a Third World country (re: Paul Craig Roberts) but be deemed the economic dynamo of the world because of its consistent, robust GDP expansion.) If a thousand firms must be shuttered or off-shored to allow for more activity to make that possible, then that is deemed efficient and, better yet, rational. From the narrow, abstract perspective of costs and revenues, it might very well seem so. From the perspective of morality and social justice, obviously it is not.
Protectionism does hamper growth in the sector beloved of the mass of suburbanites everywhere, the service sector, which lives and dies by the price of commodities. It does hamper the general frenzy of purchasing and meaningless economic activity unconnected to essential needs--this is why it is not popular or viewed as economically rational in a society that defines economic success in terms of frenzied purchasing and acquisition. Hampering such "growth" is actually one of the moral strengths of protectionism, and also why self-indulgent peoples want no part of it.
Suppose protectionists won the next election and began to impose tariffs. In the short and middle term, as many of these commodities, especially finished products, come from overseas, protectionism would mean sharp rises in prices in all the various things Americans are in a habit of buying. Unless domestic industry can be built back up quickly after their imposition, tariffs would cause a significant amount of capital flight to other parts of the world and induce a general slowdown in the domestic economy. Until that period of readjustment ended, whatever economic benefits protectionism might bring over time would be elusive and disorienting to the ordinary person, long conditioned to be a consumer of services and imports. In the long term, the effectiveness of protectionism might show itself, but it will never be able to entice or persuade people with the promise of continuous economic growth.
As I said, the definition of efficiency that is used against protectionism is inherently biased against pro-tariff arguments. But by that standard, now widely accepted, protectionism will be deemed inefficient and impoverishing--not for the workers, obviously, but for the fluff service companies that live off displaced and denatured suburbia. These services command the sort of personal attachment and possess the sort of economic importance in the domestic economy that real, producing companies once did.
Protectionism has lost its economic rationale and its political appeal as its main domestic beneficiaries, domestic industrial workers, become fewer and fewer in number. It requires an entirely different sense of economic value and different priorities in how life is lived.
Are you saying we're finished? Are we just to adapt ourselves to a service economy because the economic surgery of re-industrialization is to difficult to bear? Or if giving up do we consign ourselves to perpetual warfare and the hollowing out of a real producing economy - the Wal-Mart economy rotting our insides until all husk remains.
Giving up is never an option. We owe it to our ancestors, our descendants and our land to make the best of it.