The conservative case against free trade

Ian Fletcher, author of Free Trade Doesn’t Work: What Should Replace it and Why (discussed here at VFR, and here at Amazon), has now co-written, with William Shearer, a booklet on the same topic, The Conservative Case Against Free Trade. Fletcher’s first book is a highly original, and non-partisan, treatment of the subject. The new booklet is written more from a conservative perspective. Either way, Fletcher and Shearer are pushing against an orthodoxy as powerful, entrenched, and resistant to rational thought as the orthodoxy of mass diverse immigration.

From the book’s webpage:

Protectionism, and economic nationalism more generally, are usually held up by the supposed sophisticates today as dumb ideas. Sometimes, of course, they are. Bone-headed protectionism belongs in the junkyard of history with all the other ideologies rusting there. Nothing in this booklet is intended to defend it. But it can also be a smart, productive, pro-growth policy—and very much in the American and conservative traditions—when implemented correctly.

The fundamental message of this booklet is that nations, including the U.S., should seek strategic, not unconditional, integration with the rest of the world economy. Economic openness, like most things in life, is valuable up to a point—but not beyond it. The Founding Fathers knew that, and wrote our Constitution to reflect it. Fairly open trade, most of the time, is justified. Absolutely free trade, 100 percent of the time, is an extremist position and is not. It is not a conservative, but a libertarian and globalist, policy.

Don’t misunderstand: it’s not trade per se that’s the problem. But trade, and free trade, are not the same thing. Remember that when somebody tries to tell you how wonderful free trade is: they’re probably just giving arguments in favor of trade. Nobody on the protectionist side is suggesting we become North Korea, but there are very serious reasons why free trade is not sound economics, and the longer America clings to the free-trade delusion, the higher the price we will pay. Indeed, abandoning it is almost certainly a necessary, if not sufficient, condition for revitalizing our economy.

March 7

Gintas writes:

England became economically great when mercantilist, but went into terminal decline when she went free trade. America became economically great when mercantilist, but (fill in the blank) when she went free trade. If you filled in “went into terminal decline,” you must not think we are in America’s Golden Age.

Mass immigration is intimately connected with free trade. Together they are the free movement of labor and capital. It is all about maximizing efficiency, no matter the human cost. It is striking how the economists do not figure the human costs. Are they not just another set of technocrats who ru(i)n our lives?

LA replies:

Well of course they are, by definition.

Max P. writes:

On the topic of the conservative case against free trade, you are not going to find a better source than Patrick Buchanan. Whatever your disagreements with Mr. Buchanan, he lays out the case against free trade better than anyone else I’ve read.

On the subject of free trade, I highly recommend this video of Sir James Goldsmith on the Charlie Rose Show from 1994. Mr. Goldsmith is taking the case against free trade around the time NAFTA was being debated. His predictions about what would happen seem to have been very prescient.

The first part of the interview can be seen here.

Paul M. writes:

Globalists would like us to think that “Free Trade” is a transcendental truth of economics and that you’re an imbecile if you don’t comprehend that free trade makes everyone better off. But the fact is that what the globalists are foisting on us today is something altogether different from what classical economists like Adam Smith and David Ricardo first described 200 years ago.

Ricardo spoke of “Comparative Advantage” in trade. England’s climate is conducive to raising sheep, while Portugal’s climate is conducive to growing grapes. So both nations are better off if England and Portugal trade cloth for wine, instead of each trying to produce both themselves. It’s the classic win-win situation.

But in today’s global economy, most of what passes for free trade is really “Labor Rate Arbitrage.” Once, Detroit had a comparative advantage in building cars, because that is where the car designers, engineers, suppliers, advertisers and financiers who understood the automobile industry all were located. Today, however, any nation can access the same designers, engineers, suppliers, advertisers and financiers. The only difference is the wage paid to the local workers. In arbitrage, however, there is a loser for every winner.

Sometimes, you hear globalists admit this. Their goal is not to make everyone better off, but to use free trade to transfer wealth from rich nations to poor nations. Instead of an auto worker in Detroit making $60/hour while the Third World workers make nothing, they want the Detroit worker to make $30/hour so the Third World workers can raise themselves up out of poverty. (That the corporations pocket a big part of the benefits of arbitrage is just icing on the cake.)

Bruce B. writes:

Professor Dwight Murphey is a classical liberal that has been making a case against free trade for years. I don’t know if you’re familiar with Murphey, but he is also critical of political correctness, mass immigration and MLK. He mentioned you and your work (I think he said he was “particularly impressed” by your early writings) in his book “Understanding the United States: Illusions that Guide Contemporary America.”

His writings can be found here.

LA replies:

I like Dwight Murphey and have several of his books.

Posted by Lawrence Auster at March 06, 2012 12:55 PM | Send