US Hypocrisy on Trade
Do you remember when America was called the leader of the Free World? It seems like so long ago. Now the USA is the leader of the protectionist world, the very opposite of free, at least where international commerce is concerned.
This is the unavoidable conclusion of having closely watched the role of the UN World Summit 2002, held in Johannesburg, South Africa, August 26–September 4. The result of the international conference (the biggest ever held) was the adoption of a new statement on "sustainable development," a phrase that can mean just about anything but usually has something to do with government control of markets.
However, if there is one area of commerce where nearly all concerned agree that free trade will do the most for those in underdeveloped countries, for the poor that is, it is farming. That is what the poor do abroad most of all, and for them to have even the slightest chance at improving their economic circumstances, they need customers. If the market prevailed, they would sell what they produce, much of it to the US, the world's biggest consumer of farm products.
At these summits, representatives from the third world usually come hoping for more foreign aid, which the US should not grant, but also more trade liberalization, which the US should do everything possible to bring about. So what did the government officials, the US delegates to the UN World Summit, of the former "leader of the free world" do in response to this?
Aside from demanding open markets for US exports, US delegates insisted on yielding to the American farm lobby and keeping in place barriers, in the form of high tariffs and subsidies, to prevent the poor from abroad from selling what they produce to consumers in the United States. How can the US insist that the third world needs to take down barriers while also insisting on US rights to keep barriers as high as politically possible?
US officials offered one of the most vicious, most insidious hurdles to people seeking to make headway toward prosperity, namely, the erection of trade barriers by means of politics. They do not want to compete by producing better stuff, at lower prices, no. They want to get ahead by bribing the referees and getting special favors from them at the clear expense of others, indeed, those in most desperate straits.
Suppose you opened a cafe and some who owned others in the neighborhood noticed that you are selling your wares at a lower price than they do. Maybe you are willing to gain lower profits, maybe you are willing to work harder, maybe you can afford to do this for some other reason. But you are not stealing from anyone, only asking fewer dollars from your costumers for what you do for them.
Would it be the right thing for those with whom you are competing to place a huge rock in front of your shop so people couldn't enter it? Would it be OK for them to lobby city hall so they put various official or physical obstacles in front of your place so people cannot approach your shop? Would it be OK for these "competitors" to break your legs so you couldn't get to work?
American farmers who insist on stopping overseas competitors from selling their produce in the US are no better than those who would try to stop the cafe owner from doing business. They are hoods, no better than the Mafia, even if it is perfectly legal for them to do this. It was, after all, perfectly legal for people to turn in their competitors in the Third Reich for being Jewish, thus running them out of business by getting them killed and gaining costumers for themselves in the process. And placing barriers before farmers from Africa or anywhere else is really no different from such immoral, albeit formerly legal, tactics.
Here, sadly, is another sign of how perverse the United States has become over the last several decades. And it is especially bizarre that these policies are flourishing under the watch of George W. Bush, who was supposed to be different from Al Gore in favoring the principles of the free market. By now, however, Gore and former President Bill Clinton are beginning to look like champions of at least international free trade, of, indeed, capitalism itself! What irony.
What we now have is a bunch of right-wing mercantilists and protectionists, no better than Pat Buchanan would be if he were elected.. And in this case the stakes are not just about preserving human liberty in the economic realm but also about making some effort to do right by the struggling poor of the globe.
Here is an instance where freedom's value is clear to nearly everyone: free trade helps alleviate misery and poverty. But where does the Bush team come down on the issue? In favor of helping, through rank coercion, the people who want to remain solvent by violating the rules of free trade, by insisting on remaining in business via extortion and bribery. It is difficult these days to remain a loyal American.
Tibor Machan, adjunct scholar of the Mises Institute, teaches at the Argyros School of Business and Economics at Chapman University. You may send him MAIL and view his Mises.org Daily Articles Archive.