Thursday, July 12, 2012

On Free Trade Ideology

The late Samuel T. Francis, a former congressional staffer, columnist, and essayist de jour, once lamented that, “We have two parties here, and only two. One is the evil party, and the other is the stupid party.  Occasionally, the two parties get together to do something that’s both evil and stupid. That’s called bipartisanship.”

Pat Buchanan likewise noted the fraud of our “two party system” when he said, “On foreign and trade policy, open borders and centralized power, our Beltway parties have become identical twins.”

Real wages continue to plummet, the trade deficit skyrockets, and America increasingly takes on the export profile of a Third World banana republic. What do the free traders say? The evangelists of open markets, barking like Pentecostals raise their hands and shout for more. 

Republican Congressman David Drier announced last week that he intends to propose a free trade agreement between the United States and Tunisia.  After all, there is no use waiting to bring the new “democracy” into the globalist superstructure overseen by transnational, deracinated elites.  Meanwhile, trade negotiators from nine countries are looking to build a free-trade bloc spanning the Pacific from North America and Chile to Australia, Singapore, and Brunei. 

As a younger and more naive man, I hoped to one day become an economist.  Over time, I was tempted by the siren song of libertarian thought unconstrained by God’s law and become a methodological individualist.  With this new found sympathy for anarcho-capitalism came a fervent belief in open borders—for goods and people.  The latter delusion was shattered by Peter Brimelow, the former primarily by Patrick Buchanan

While attending graduate school, my thinking began to change.  I was perplexed by the unanimity of economists on the subject of trade, particularly because they disagreed about so many other matters.  Ultimately, it became clear that economists have a very limited analytical tool kit and are often much too impressed by theoretical abstraction and mathematical mumbo jumbo while ignoring trifling concerns—you know, things like history and human nature.

As I drifted into Calvinism and traditional Reformed theology, I rejected many libertarian and individualist assumptions and became a Christian covenentalist. Ultimately, I concluded, free trade is the economic component of the liberal ideology.  At its core, free trade doctrine is a religion fueled by the passions of zealous converts and is based upon the assumption that all things work together for the good of those who eliminate tariffs.

In Day of Reckoning and more thoroughly in The Great Betrayal, Buchanan traced the origins of the free-trade cult to 19th liberal thinkers Richard Cobden and Jean-Baptist Say. It was in the stew of Enlightenment thought that free trade developed into what Rushdoony has called a "god-concept."

In 1846, the year of repeal of the Corn Laws, Cobden rose to defend free trade:

I have been accused of looking too much to material interests...I believe that the physical gain will be the smallest gain to humanity from the success of this principle. 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 antagonism of race, and creed, and language, and uniting us in the bonds of eternal peace...I believe that the effect will be to change the face of the world, so as to introduce a system of government entirely distinct from that which now prevails. I believe that the desire and the motive for large and mighty empires; for gigantic armies and great navies...will die away; I believe that such things will cease to be necessary, or to be used when man becomes one family, and freely exchanges the fruits of one's labor with his brother man. I believe that...the speculative philosopher of a thousand years hence will date the greatest revolution that ever happened in the world's history from the triumph of the principle which we have met here to advocate.

According to this apostle of free trade, it is commerce, the free and unhindered movement of consumer crap across borders that has the wonder-working power to save man from sin.  Free trade causes men to lay down arms, cast aside envy and greed and embrace one another in the bond of unity, fellowship and brotherhood.

Cobden’s rendering of Luke 18:18-20 might read like this: “A certain ruler asked him, ‘Good teacher, what must I do to inherit eternal life?’ ‘Why do you call me good?’ Jesus answered. ‘No one is good -- except God alone. You know the commandments: 'Do not establish tariffs or prevent the free flow of commerce across borders.'"

In the vision of Adam Smith’s Wealth of Nations and Mandeville’s Fable of the Bees, it is the love of self and self-interest that drives all men to an enlightened interest that creates prosperity and the good society. There is some truth here. Indeed, a benevolent creator has ordered the universe in such way as to produce human happiness. Upon this foundation, it is true that there is a natural harmony of interests, exchange is beneficial for both parties, and men are chiefly responsible for self-government, and the governing of family and other spheres within their proximity, rather than being rigidly responsible for the welfare of all men.

Here as elsewhere, however, sin creates divisions among men. Smith’s vision of the "invisible hand" owed much to an assumed understanding of divine providence and he wrote in a cultural context greatly influenced by Puritanism and Calvinism. Great Britain of the 18th century was not yet a thoroughly non-Christian nation nor did her populace consist of modern men for whom “freedom” means drugs, booze, easy sex, and ceaseless entertainment options.

When an abstract concept of freedom reigns unchecked by the restraint of biblical morality grounded in gospel truth and God’s law, all practices from narcotics to unspeakable perversion are subject to no controls other than personal preference and whim. This is the logical outgrowth of an ethical system and worldview grounded on the premises and presuppositions of radical libertarianism.  Free trade ideology is inextricably linked to that system of thought. 

The assumptions of free trade theory are also faulty or at the very least apply to a specific historical context rather than being universal laws.  According to David Ricardo’s principle of comparative advantage if nations specialize in the production of goods where they have some natural advantage and trade for other goods than gains from exchange will improve economic conditions in both countries. Thus Ricardo says all nations can benefit from the principles of specialization, division of labor and free trade.

The problem is that Ricardo’s theory assumes a world where the factors of production are largely immobile or at the very least migrate within individual nation-states.  The theory breaks down in our era because production can readily move to nations with an absolute advantage.

In 19th century Britain, productivity was primarily predicated on factors such as climate and geography, which cannot migrate.  But the collapse of socialism at the end of the 20th century created vast pools of cheap and willing labor. Meanwhile technological advances, beginning with the Industrial Revolution and proceeding apace into the computer age, have either made physical location unimportant or allowed for the easy transfer of capital to nations with low labor costs.

The benefits of free trade in the form of cheap consumer goods are immediate, but the narcotic effect of dependence on other nations will only become visible over time.

"What...the free traders fail to understand or ignore is that the transfer of production abroad is not free trade" writes Buchanan. "Unlike the export of goods, which adds to GDP, the transfer of factories subtracts from U.S. GPD and ads to Asian and Chinese GDP. When factories closed in the North and reopened in the Sun Belt, the North became a Rust Belt. The same happens to a nation when production is transferred overseas."

As the trade deficit balloons and the dollar collapses the wages of Americans are lower than thirty years ago.  Moreover, we are increasingly dependent on foreign goods for the necessities of life, and on foreign banks to pay for them. The chickens are coming home to roost.

The public policy apparatus is controlled by corporate globalists—Democrats and Republicans, conservatives, liberals and libertarians. Their loyalties are international rather than regional, national, or local. They are anti-traditionalist and their one-worldism is the heresy of Babel.

At bottom, Pat Buchanan says, we need a new nationalism with foreign, immigration and trade policies that look to the wisdom of our ancestors and put Americans first.

"Is America on a path to national suicide?" Buchanan thinks that the twilight of America is at hand. "Our day of reckoning is at hand. Time to mind our own business. Time to lay down the burden and come home. Time to put America first."

For too long, we've been bamboozled by ivory tower intellectuals, academics, and walking calculators. Economists can provide very useful analytical tools, but they are blind to how the world works, and to history, which they studiously ignore in favor of quoting the likes of Adam Smith and David Ricardo, as though such two products of the Enlightenment were guided by the Holy Ghost and speaking with the authority of Holy Writ.