No one ever claimed tariff costs won’t get passed along to consumers. Trump thinks foreign countries will make deals cutting their own tariffs on US products and trade restrictions in return for our dropping ours, and it won’t be a major problem for long. Maybe so, maybe not. The Smoot-Hawley Tariff of 1930, Priotectionism’s previous Last Hurrah, was rather less than a success.
I’d say: It’s obviously true that free trade benefits everyone. And it’s also true that Protectionism forces farmers, professionals, shopkeepers, &c. to pay more for many things to benefit industrial companies and factory workers. Lots of Americans have argued, not incorrectly, that this kind of privileging of some members of society at everyone else’s expense is immoral. But… we have seen, over decades now, the mass transfer of production, manufacturing, industry, and blue collar jobs overseas, resulting in the economic devastation, depopulation, and general ruin of cities, regions, communities. The small non-resort town, the small city or town lacking a college or university has become a wasteland, braindrained as the capable younger population was compelled to relocate to some portion of the Megalopolis, leaving behind a dysfunctional residuum of losers. The 19th Century Tories would have contended that noblesse oblige and national solidarity requires bearing some extra costs to keep the peasantry happy, prosperous, and in work. American Classical Liberalism is more Darwinian, but we Classical Liberals tend also to be agrarians who deplore the effeminacy and conformity of suburbia, the corruption and decadence of urban culture. Subsidizing the proletarians may be necessary to save civilization.
And, beyond that somewhat questionable argument, we do have the issue of National Defense. If we build just about everything overseas, inevitably one fine day, the balloon will go up, there will be war. Quite possibly with China. How inconvenient and embarrassing it will be when our adversaries decline to fill our new emergency orders for tanks, ships, and planes, which we find they can produce in profusion.
Cheap goods are a fine thing, but military capability and preparedness is decidedly a better thing.
In any case, of course, it’s out my hands and yours, 77 million voters put the decision in the hands of Donald J. Trump, who has had a Protectionist bee in his bonnet for a very long time.
It’s also been a long time, most of a century, that Free Trade has been in ascendance. Even the democrat party left gave up “protecting American workers’ jobs” long ago, hoping cheaper stuff at Walmart would suffice to keep them happy. But, now everything old is new again, and we are about to have an experiment in Protectionism one more time.
The Donald Trump theory of Industrial Revival, I’d say, has one key shortcoming: cheap labor. Back in the day, 1880-1920, America had that huge wave of immigration and those immigrants overwhelmingly came here willing to work and eager to take jobs Americans wouldn’t do. My ancestors came to Pennsylvania to work in the coal mines at a time when the casualty rate of deaths was on the scale of a small war and the survivors had lives shortened by miners’ asthma.
Those immigrants had lots of kids so American industry had lots of cheap, affordable labor.
Today, we’re in the middle of another huge wave of angry Nativism precipitated by the feckless and cynical policies of the democrats intentionally turning a blind eye and facilitating mass Third World immigration, then lavishing housing, health benefits, and welfare on illegals who in turn delivered a long series of front page stories of murders, rapes, drug dealing, and gang violence.
Meanwhile, a very large segment of the old American working class, in the traditional American way, has with passing generations moved up and out of the proletariat into management, the professions, and the bureaucracy.
Whether or not the kids-who-did-not-do-homework left behind in the falling-down ruins of rust bucket America are going to put down the meth pipe and start rising with the sun to answer the factory whistle remains to be seen. If I were Trump, I’d stop deporting illegals who are actually working right now.
Seattle Sam
It is indisputable that free trade is the most economically efficient mode. Anything else is suboptimum. The current structure has, indeed, been “rigged” (largely to the disadvantage of the United States, but that’s a secondary issue) to encourage massive use of debt to finance huge levels of government.
If Trump is the genius he claims to be, then this trade gambit of his will result in a major economic restructuring. The losers will be government and the “globalizers”. The winners will be the rest of us. We shall see (betting against Trump has not been a winning strategy historically).
In the meantime, a number of eggs will be broken making the omelet.
McChuck
Free trade is a theoretical optimum which few nations are foolish enough to attempt. Unfree trade makes far more money and power for them. Woe to the nation that doesn’t produce its own necessities, and is forced to rely upon the fleeting kindness of others.
Should the financialization of everything really be our goal? I remember when the rust belt was first falling apart. Free trade (but only ever on our part) and financialization destroyed businesses, lives, families, communities, entire regions.
Ricardo has been repeatedly proven wrong, in both theoretical and practical terms.
bob sykes
It is not true that free trade benefits everyone, nor that it is the most efficient way to do business. The Rust Belt in the American Midwest disproves both points.
American workers who in 1965 could own a house and a car and raise 5 kids on only their wages can nolonger do this. It takes two incomes merely to support a childless couple living in a apartment.
The old manufacturing towns of the 60’s have never recovered from free trade, and the once prosperous workers no live in poverty.
Under the free trade mantra, US working class wages have steadily declined for 60 year, and middle class incomes have stagnated. Essentially all the economic growth in the US since 1965 has been captured by the upper classes. If it is not obvious why Trump was elected (three times!!!), then you are a fool.
JDZ
Free Trade assures that things will be produced by the lowest cost vendor. Lower prices benefit everybody. And Protectionism costs everybody. Protecting Elm City’s Amalgamated Widget from Lower Slobovian competition obviously benefits Widget stockholders, management, and employees and the whole Elm City economy. But everybody in Elm City, too, like the entire rest of America, will pay more for stuff containing widgets at Walmart.
We are at a point, though, where the necessities of National Defense argue for Protectionism.
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