Tag Archives: Free trade

Conservative Pikers, by Laurence M. Vance

It’s called stretching an argument until it snaps, and conservatives love to do it with liberal arguments about minimum wages. The same can be done against conservatives who endorse tariffs. From Laurence M. Vance at lewrockwell.com:

There are liberal pikers and there are conservative pikers.

Every few years, liberals and progressives in and out of Congress push for an increase in the federal minimum wage. During one such time back in the 1980s, economist Murray Rothbard, in the course of explaining how a “minimum wage law provides no jobs; it only outlaws them,” made this noteworthy statement:

The advocates of the minimum wage and its periodic boosting reply that all this is scare talk and that minimum wage rates do not and never have caused any unemployment. The proper riposte is to raise them one better; all right, if the minimum wage is such a wonderful anti-poverty measure, and can have no unemployment-raising effects, why are you such pikers? Why you are helping the working poor by such piddling amounts? Why stop at $4.55 an hour? Why not $10 an hour? $100? $1,000?

It is obvious that the minimum wage advocates do not pursue their own logic, because if they push it to such heights, virtually the entire labor force will be disemployed. In short, you can have as much unemployment as you want, simply by pushing the legally minimum wage high enough.

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Globalists and Nationalists: Who Owns the Future? by Patrick J. Buchanan

The nation-state refuses to go quietly into that good night. From Patrick J. Buchanan at buchanan.org:

Robert Bartley, the late editorial page editor of The Wall Street Journal, was a free trade zealot who for decades championed a five-word amendment to the Constitution: “There shall be open borders.”

Bartley accepted what the erasure of America’s borders and an endless influx or foreign peoples and goods would mean for his country.

Said Bartley, “I think the nation-state is finished.”

His vision and ideology had a long pedigree.

This free trade, open borders cult first flowered in 18th-century Britain. The St. Paul of this post-Christian faith was Richard Cobden, who mesmerized elites with the grandeur of his vision and the power of his rhetoric.

In Free Trade Hall in Manchester, Jan. 15, 1846, the crowd was so immense the seats had to be removed. There, Cobden thundered:

“I look farther; I see in the Free Trade principle that which shall act on the moral world as the principle of gravitation in the universe — drawing men together, thrusting aside the antagonisms of race, and creed, and language, and uniting us in the bonds of eternal peace.”

Britain converted to this utopian faith and threw open her markets to the world. Across the Atlantic, however, another system, that would be known as the “American System,” had been embraced.

The second bill signed by President Washington was the Tariff Act of 1789. Said the Founding Father of his country in his first address to Congress: “A free people … should promote such manufactures as tend to make them independent on others for essential, particularly military supplies.”

In his 1791 “Report on Manufactures,” Alexander Hamilton wrote, “Every nation ought to endeavor to possess within itself all the essentials of national supply. These comprise the means of subsistence, habitat, clothing and defence.”

This was wisdom born of experience.

To continue reading: Globalists & Nationalists: Who Owns the Future?

Three Cheers For MEP Dan Hannan: Why Not A Better Brexit Deal For Everyone? by Mike “Mish” Shedlock

Free trade benefits any nation that adopts it, regardless of whether or not any other nation does. From Mike “Mish” Shedlock at mishtalk.com:

The EU values political correctness more than jobs.

The result was a collapse in support for Angela Merkel, and the rise of AfD and FDP in Germany. Let’s not forget Marine Le Pen in France, Beppe Grillo in Italy, and the far right in Austria.

For the sake of political correctness, the EU is bound and determined to punish the UK for Brexit even though new studies suggest that a Hard Brexit Will hurt the EU More Than Britain.

The European Union will lose more than twice as many jobs as Britain after a hard Brexit, research by one of the world’s leading universities found as tough UK-EU divorce talks begin in Brussels.

Hard Brexit describes what will happen if the UK and EU fail to reach a divorce deal by 29 March 2019. Britain would revert to WTO tariffs on imports and exports to and from the EU rather than the zero tariffs afforded by membership of the bloc.

The return of tariffs to goods and services would cost 526,830 British jobs and 1.209 million jobs in the remaining 27 EU member states, according to researchers at Belgium’s University of Leuven, one of the top 50 global universities. The damage would lead to a 4.48% drop in UK GDP and 1.54% in EU GDP, researchers found.


Free Trade Benefits

As I have pointed out previously, a free trade agreement can fit on a napkin. Her is my proposal once again: “Effective immediately all subsidies and tariffs cease regardless of what any other nation does.”

The first nation that adopts that policy will see an enormous economic benefit.

Very few people fully understand free trade. Even fewer politicians understand free trade. One of the few who does understand is British MP Daniel J Hannon.

In a Telegraph Op-Ed Hannan writes By embracing free trade, we can use Brexit to make everyone better off.

To continue reading: Three Cheers For MEP Dan Hannan: Why Not A Better Brexit Deal For Everyone?

America Is Hardly a Bastion of Free Trade, by Andrew N. Smith

America has never been as capitalistic or as free trade as it has often been portrayed. From Andrew N. Smith at mises.org:

Rhetoric has recently trumped reality. It has become a misconceived bit of common “knowledge” that the United States of America is a bastion of free trade. Little could be further from the truth. The “freest” nation on earth, as we are taught to believe, imposes a staggering number of tariffs, import and export bans, sanctions and embargoes. Yet somehow “free trade” is blamed for the financial ills of the unemployed in the formerly industrial Midwest. Instead of taking a serious look at our existing trade policies, and maybe reducing some of the regulations, President Trump promised Midwesterners that their inefficient factor jobs that have been outsourced to the “right to work” south and overseas will be brought back by imposing new import taxes on specific companies. It is a naïve and ignorant notion that singling out countries and taxing the goods they import into the US will somehow help the unemployed while having absolutely no effect on the country’s general productivity and standard of living. Besides, we’ve already been doing that for far too long.

The US imposes tariffs on over 12,000 different goods and services. No that is not a typo — over 12,000. Some of these tariffs are so significantly prohibitive that they are effectively outright bans. Sugar, for example, is one product that Americans get gouged on, paying an average of $277 million more per year than they should. That is $277 million per year that would otherwise be used to consume other goods, invested in growing businesses, creating jobs, and raising real wages. This is nothing new. The original tariff was imposed as a “temporary” protection for US sugar farmers, that was more than 80 years ago. It has protected US sugar farmers, but has also decreased the productivity of the sugar farmers’ land. The laws of absolute and comparative advantage would dictate that the land on which sugar cane and sugar beets are grown and harvested should be used to produce goods in which these particular regions can more (cost and time) efficiently produce.

To continue reading: America Is Hardly a Bastion of Free Trade

 

Free Trade versus “Free Trade”, by Peter G. Klein

There’s a huge difference between actual free trade and “free trade” agreement and multinational organizations supposedly devoted to “free trade.” From Peter G. Klein at lewrockwell.com:

NPR featured an unintentionally funny piece this morning on Donald Trump’s views toward the EU and free trade. The guest, former US ambassador to the EU Anthony Gardner, rightfully criticized the president’s view that “protection will lead to great prosperity and strength,” and called for continued global engagement by US companies and consumers. But he revealed, perhaps inadvertently, what political actors mean by “free trade.”

Specifically, Gardner expressed great skepticism towards the prospect of the US striking a bilateral free-trade deal with the UK, supposedly one of Trump’s top objectives in his upcoming meeting with new Prime Minister Theresa May. Free-trade agreements are complex, Gardner informed us, and negotiating one will be neither easy nor quick.

Why? To economists, free trade means the absence of government interference with trade: no tariffs, quotas, subsidies, or other interventions, explicit or implicit. To politicians, “free-trade” means a complex set of managed trade policies (Gardner even referred to the solemn obligation to “write the rules for global trade,” which in his mind is something either our government does or a foreign government does). Which imports will be taxed, and at what rates? Which exports will be subsidized, and at what levels? How will labor, environmental, and social policies be enforced by domestic and foreign governments? For government officials, countries are engaged in “free trade” when they agree on a complex package of explicit and implicit taxes and subsidies such that neither has a special advantage over the other, nor is disadvantaged relative to some other trading partner (however such advantages are defined).

To continue reading: Free Trade versus “Free Trade”