Oh, I know, you aren’t really against free trade per se. You just demand a “level playing field.” The Chinese cheat by raising tariffs against our goods and subsidizing key industries that they want to dominate. In the process, they destroy our high-paying “manufacturing jobs.” To such statements, I have three objections.
Abandonment of the Gold Standard
It isn’t true that the main reason our “high-paying manufacturing jobs” have almost disappeared was due to market interventions by the Chinese in their own market or lower tariffs in America against Chinese goods. The main cause of our lack of competitiveness. Otherwise, why would Americans buy/prefer Chinese goods? This is partially due to our abandonment of the gold standard, which served as an bulwark against profligate US government spending. See my previous essay on the subject.
Economic Interventions Harm Only the Country that Initiates Them
No nation can harm another economically (short of war, of course) by manipulating its own currency and economy. Subsidies are paid by that country’s own citizens. The same is true with currency manipulations to keep one’s own currency cheap. Tariffs prevent one’s own people from enjoying the fruits of the world market. It may be true that American manufacturers may not achieve the economies of scale that they desire due to the fact that they are prevented from selling in the Chinese market. To that objection I have two responses. Find other markets and forget about it.
Regulatory Interventions Stifle American Industry
We need only examine the pernicious anti-business mentality of our alphabet government agencies that are supposed to protect us from evil manufacturers. For instance, our Great Depression-era labor laws protect unions from non-union competition and do not protect business from union violence. Our Nixon-era Environmental Protection Agency (EPA) can shut down huge manufacturing plants by adopting more stringent environmental standards than those that are acceptable to the local manufacturing community. The same is true with the Office of Safety and Health Administration (OSHA), which deigns to adopt arbitrary standards of what constitutes a violation. It is little more than a government-protected shakedown racket.
These three handicaps to American industry have resulted in the US being non-competitive in both price and quality of product. If this were not the case, then Americans would not demand protection against “unfair trading practices.”
Trump Misdiagnoses the Problem
President Trump addresses the symptoms of our problems without understanding the real causes. In medical terms, he misdiagnoses both the problem and the cure. Placing the thermometer in the fridge will cause a lower reading but will do nothing for the patient’s fever. Bleeding the patient may have been the standard of care in colonial times for alleviating a chill, but thankfully, modern medicine has advanced. Shutting ourselves off from foreign competition will not miraculously make our industries more productive. The opposite result is almost guaranteed.
Protectionism Violates Kant’s Humanity Principle
The final objection from free Americans is that protecting some industries from foreign competition violates Immanuel Kant’s “humanity principle”; whereby, the individual is an end in himself and may not be used as a means to an end. Ethically, we may not be forced to pay higher prices or be limited to the purchase of less-desirable goods in order to benefit someone else. Likewise, no one has an ethical right to the trade of another. In other words, Americans cannot demand that other countries buy our goods. Likewise, Americans cannot demand that other countries remove protectionist trade barriers. Remember, trade barriers harm only the citizens of the country that erects them.
Conclusion
Demanding a level playing field for international trade is a complete waste of time. All nations have and will adopt all manner of benefits to enrich certain politically-connected industries. These benefits are sometimes visible, such as tariffs or quotas against foreign competitors, but often hidden deeply in tax codes, supposed research grants, etc. Such unearned benefits harm one’s own citizens and, therefore, can be opposed only by those citizens who object to being fleeced in order to meet some statistical goal or enrich crony capitalists, which includes organized working men too. In other words, it’s hard enough to get our own house in order without pursuing the fruitless task of trying to get someone else’s house in order, especially since we ourselves are the beneficiaries of their foolishness.
