June 02, 2009

The Rest of the Story

A piece in Pravda denouncing Obama’s economic policies as Marxist is making the rounds among American libertarians.  It has appeared at Lew Rockwell’s website, then Kevin Gutzman linked to it here, and now it is on the Takimag main page, and folks are linking to it at Facebook and similar sites.  Clearly, it has struck a nerve.  But the author of that piece, Stanislav Mishin, will not be a folk hero to libertarians for long, since he is not one of them.  In fact, Mishin is an unabashed economic nationalist, as this post of his from May 16 shows.  In his May 16 post, Mishin quotes Karl Marx’s support for free trade, writes that “With these words, the Marxists and socialists joined the cause behind the greedy internationalists, who put Free Trade into the forefront,” and notes that free trade today still “benefits the Marxists, as the victims of Free Trade are driven into their waiting grasp.”

It is a shame that Mishin’s status as a libertarian folk hero will be short-lived, because his arguments deserve serious consideration.  His May 16 post describes the many nations that have benefited from protectionism, even as nations that embraced free trade have declined.  His list has an unfortunate, though understandable, omission.  Mishin seems to be under the impression that America has always embraced free trade, even though the roster of American protectionists includes such men as George Washington, Alexander Hamilton, Andrew Jackson, Abraham Lincoln, Teddy Roosevelt, Warren Harding, and Calvin Coolidge, and America became the world’s greatest manufacturing nation behind tariff walls.  By contrast, our long deindustrialization has been the result of free trade, and the collapse of the manufacturing sector has produced exactly what Mishin says it does:  people whose communities have been devastated by plant closings end up looking to government for help. 

Nor can we pretend any longer that America’s deindustrialization is without consequence.  Cheerleaders for the “new economy” that was supposed to take the place of manufacturing have been largely, and rightly, silent of late.  In order to be wealthy, a county needs an economy devoted to wealth-creating activities, and America’s economy has become more and more devoted to government since we embraced free trade.  As Paul Craig Roberts notes in his regular examinations of the employment figures, sectors subject to foreign competition are no longer creating jobs here.  The growth that is taking place is occurring in sectors that are sheltered from foreign competition or connected to government, such as health care and education.  One of the recent top ten lists that always seem to show up at Yahoo recently listed the top ten cities for job growth in the United States, a list that naturally included Washington and also featured several state capitals or cities housing major state universities.  If libertarians wish to achieve their goal of a limited government, they would be well-advised to revisit the tradition that contributed to American prosperity for many decades during which the federal government was a tiny fraction of its current size.

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