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Making Enemies

January 14, 2004

Tags Free MarketsGlobal EconomyU.S. EconomyTaxes and SpendingValue and ExchangeInterventionism

Some of the worst attacks on our personal freedom come in the form of edicts as to whom we can trade with, and whom we must make war on. This is referred to by the famous dictum attributed to Bastiat: "When goods are not allowed to cross borders, armies will." The truth of the dictum has been demonstrated in history, both ancient and recent, time and again. Restrictions on trade between nations do indeed lead to wars, and while it is harder to observe, freedom to trade prevents wars.

I was listening the other day to a friend's justifications for the recent US attack on Iraq, which centered on the repressiveness of Saddam Hussein's regime there. I asked my friend, "Why must we conquer Iraq in order to install democracy there, but not China? Whatever happened to the old ChiComs of the Cold War? Did they dry up and blow away?"

An appalled look came over my friend's face as he said, "If our imports from China were all suddenly stopped, our standard of living would plummet!" which seems pretty easy to believe given the apparent ubiquity of those imports.

And I considered again, why, indeed, was it so easy to attack Iraq, but so hard to resolve to do the same with China? And I realized, the US government sponsored and enforced an embargo against Iraq that prevented trading with them by anyone, not just Americans. After twelve years (1991–2003) of that, it was easy to yield to the other temptations, real and contrived, to invade and conquer the economically enfeebled, not to say embittered, nation.

The United States has fairly regularly imposed trade restrictions on countries it not much later conducted devastating wars against. It embargoed sales of scrap iron to Japan before the war with that country began in 1941, and probably worse, secretly colluded with Britain, China, and the Netherlands (which at the time controlled oilfields in Indonesia) to deny petroleum resources to Japan, a step still cited today in Japanese accounts of the causes of its war with the United States [1].

Not that the United States is the only, nor the first, country to exhibit this pattern: in the years before Nazi Germany launched successive attacks against virtually all its neighbors in Europe, Economic Minister Hjalmar Schacht's Byzantine regulation of imports and exchange rates throttled trade with all its eventual victims, and the United States as well. Germany's need for economic independence so loudly trumpeted by Nazi propaganda of the day was literally created by these policies and matching ones among Germany's erstwhile trading partners.

This dynamic of stopping the trading, then starting the shooting, came back to my mind when defending myself against accusations (from the same friend) of "trading with the enemy" in willingly purchasing goods of French origin. I realized, my friend wanted me to add France and the French to the growing legions of my enemies, and that if he had his way with my freedom to trade, his wish could gradually, insidiously, come true. Of course, exhortations to "Buy American," or even "Buy Union" are merely extreme versions of the same program.

Once, in a class in international economics, I was debating with a classmate about whether one country's protectionist tariffs could affect the economies of other countries that had no say in the first country's laws (a rather obvious "yes"). My opponent declared, "It's our business whom we trade with, not theirs." The opening this remark gave me was so delicious that I abandoned my trivial original point and seemingly agreed, by saying, "Yes, it is our business whom we trade with, and not each other's." This led into the far more-substantive discussion of why, how, and whether any central authority should regulate people's trade with each other, whether across national borders or not.

In protectionist tariffs, it's often possible to descry just whom the government is picking out to be our next enemies. While simplified media accounts convey the impression that when the administration does something like implement a steel tariff, it does so equally for all countries of origin, this is never the case. When you come across the obscure details of the actual measures taken, you invariably note a crazy-quilt pattern of discrimination and reward that would make Elbridge Gerry (he of the gerrymander) proud.

As trade with Country X mysteriously withers before the blast of a punitive tariff, that very country becomes more and more available to be our next enemy, very much as George Orwell's mysterious regime launched rotating wars against now Eurasia ("We have always been at war with Eurasia") [2], now another mysterious entity with which we have little contact and less trade.

So, next time you hear the cry that we must stop the exportation of jobs, or protect infant industries, or "level the playing field," or other such nonsense, remember . . . you're being invited onto the road that leads to the state's best friend ever.


Joe Potts studies economics at his home in South Florida. pottsf@msn.com. See his archive.

[1] The ABCD (American-British-Chinese-Dutch) Pact of July 1941.

[2] Orwell, George, 1984 (London; Harcourt, Brace & Company, 1949).

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