Tom Piatak

June 03, 2009

In commenting on Chris Kopff’s excellent essay refuting the notion that Americans are doomed to be Lockean liberals, Richard Spencer wonders what I want to see in the realm of economics.  I would have thought the answer was clear:  I want to see a return to a protected national market, the system under which America rose to be the greatest economic power on earth, all the while keeping the federal government limited.  That system is well described in Pat Buchanan’s beautifully written and powerfully argued The Great Betrayal, a book I cannot recommend highly enough. 

It is odd, though, to see Richard invoking the name of Otto von Bismarck and the great era of global free trade that supposedly preceded the First World War, for that period saw both protectionist America and protectionist Germany outstrip Britain, which stubbornly clung to free trade.  During roughly that same period, the US went from having half of Britain’s production to twice that of Britain, all behind tariffs averaging over 40%.  And this is what Bismarck told the Reichstag on May 2, 1879:  “The dicta of abstract science do not influence me in the slightest.  I base my opinion on the practical experiences of the time in which we are living.  I see that those countries which possess protection are prospering, and those countries which possess free trade are decaying.”  The same may be said today, as the United States unfortunately loses ground to China and other Asian countries that rigorously protect their home markets.

The notion that globalism is no longer a serious problem because Obama has nationalized GM and Chrysler is also odd.  The massive trade deficits we have run for years have created many structural weaknesses in our economy, weaknesses this recession has exposed, and America is still shedding jobs in sectors subject to foreign competition year in, year out.  The sad decline of the American auto industry is but one result of globalism, and it is hard to see how we arrest the process of a more general American decay unless we address these structural weaknesses and begin protecting our home market again.  As Paul Craig Roberts wrote earlier this year, “The American economy has gone away.  It is not coming back until free trade myths are buried six feet under.”

There is another benefit to the historic American policy of protectionism.  It deepens ties between Americans and arrests the march toward globalism.  The tendency of free trade, of course, is precisely the opposite.  As French liberal economist Frederic Bastiat wrote, free trade is intended to lead to the “peaceful, ecumenical, and indissoluble union of the peoples of the world.”  When I look at the loudest proponents of free trade today, I see a newspaper whose former editor told Peter Brimelow, “the nation-state is finished,” and a website that consisently takes that line, going so far as to object when the Navy prevents the payment of ransom to Somali pirates by rescuing their American hostage, and praising Somali society as a model for us all.  It is true that we have gone far down the road toward the borderless world desired by Bastiat, Bartley, and Rockwell, and it will be difficult changing course, but I want no part of that world at all.