Free trade, according to the usual pundits, is an issue that divides the right. The usual pundits are, as usual, wrong. Free trade, which has never been more than an undocumented alien on the right, is an ideal that does unite much of the left. It is a point on which socialism converges with both individualism and globalism—three roads that lead to world government. This late in the 20th century, even libertarians have no excuse for not seeing the resemblance between international socialism and the multinational corporate state that is emerging, but free-traders, as opposed to those who advocate free markets and low tariffs (among whom I count myself), are a set of true believers every bit as impervious to argument and evidence as any cultist who thinks he knows God’s first name or takes his scriptures from a fantasy novel.
Like most hot political issues in the United States, the trade debate is carried on with more posturing than argument. As in the debate over abortion or guns or immigration, one side misrepresents the problem and relies primarily on an argument from misdefinition; if you can believe the left, abortion is not infanticide, only a pregnancy termination; the Second Amendment was written only to arm the National Guard; and America is uniquely a nation of immigrants whose citizens have no right to control their borders or determine their future. There are people calling themselves conservative who want to kill babies, disarm the population, and swamp the country with 25-30 million immigrants a decade. As citizens, they have a right to their opinion, but they will take the first step toward credibility when they are willing to speak honestly about their aims.
The same sort of dishonesty goes on in the trade debate. The proponents of NAFTA and GATT insist they are supporters of something they call free trade, and they castigate their opponents as advocates of protection. In fact, the issue is not about free trade at all. Free trade is a myth, a will-o’-the-wisp in the minds of economists, who are the least practical men on earth. The dishonesty begins with calling economics a science (or a social science—a contradiction in terms), implying that it is not merely a systematic body of knowledge, like, say, the rules of prosody, but an exact science like physics. As Richard Neuhaus used to say, theology is an exact science. Economics is only playing with numbers. Whatever else economics might be, it is not a discourse about the proper ends of human existence.
Economists have much to say about the most “efficient” means of reaching a goal, but they have nothing of any value to say about either the goals themselves or the route we choose to reach them. If I choose to go to San Francisco, it is none of their business if I decide to drive rather than fly, or if I hunt and peck my way, from friend to friend, wasting time, money, and gas. Nations have their own goals, their own peculiar characters, and if the French were to decide to ban Coca Cola or Hollywood films, I cannot imagine a useful comment that an economist might offer on their decision, although it is amazing how easily these scientific economists slip from questions of “is” to matters of “ought.”
Every scholar is a prisoner of his discipline, and many economists think they can explain virtually everything in human life by their abstract and simplistic analyses. I, on the other hand, am a philologist, a student of language, and therefore I think that the first step in solving a problem is to define terms correctly. We all have some idea of what trade is; you have something to sell that I want, and we strike a deal over the price—$2.00 for a gallon of milk, $30,000 for a Lexus, 15 cows for your daughter.
Whether we cut the deal for a pound of pork chops in my backyard, go to market, to market, to buy a fat pig, or speculate on pork belly futures at the Chicago Board of Trade, the transaction is, hypothetically, between two individuals. But how free is it? Apart from the imaginary state of nature that no rational philosopher can take seriously, men everywhere live in societies that impose rules on these transactions. They enact restrictions on who can trade and prohibitions on trading certain goods, such as drugs, weapons and strategic materiel, and historical treasures. One way or another, there are usually charges for the use of the marketplace. Trade is never free, whether it is domestic or international. There is always some group—the king and his council, the Church, a craft guild, a trade commission, the WTO—that takes it upon itself to make rules and set limits. And if these official imposts were not sufficiently burdensome, there is always a corrupt executive asking for kickbacks, a bureaucrat demanding baksheesh, a mobster collecting weekly payments for protection.
Suppose the impossible for a minute. Suppose that instead of the thousands of pages of jury-rigged international trade agreements (including GATT and NAFTA) the governments of the world took themselves out of the picture and said that borders no longer mattered. Would trade be free? Of course not, because every level of government, from neighborhood associations to the feds, regulate every aspect of trade. They fix wage rates, regulate competition, impose safety, health, and environmental standards. Some small part of this regulation may be in the public interest. The beneficiaries of most of it, however, are the bureaucrats themselves and the larger businesses that can influence the writing of the regulations. It was in this sense that libertarian free-trader Lew Rockwell endorsed Pat Buchanan in 1992 as the nearest thing to a free trade candidate, precisely because Pat was the only Republican promising to cut the size of the federal bureaucracy.
Who is so naive as to think that multinational businesses are any less eager to cartelize and monopolize their market? So far, in fact, no serious policymaker has actually made a proposal for free foreign trade. Whatever else NAFTA and GATT might do, they do not increase the freedom of buyers and sellers. Even while reducing tariffs, they impose a mare’s nest of regulations, prohibitions, and international tribunals that undermine both the sovereignty of the United States and the constitutional order established by the Founding Fathers.
In recent months, the World Trade Organization has struck down American laws banning the importation of seafood from countries that are casually exterminating turtles and dolphins. “Good,” say the free-traders, “turtles and dolphins don’t buy or sell camcorders or baby food.” In the same vein, a libertarian economist once responded to Chilton Williamson’s appeal for a sense of environmental stewardship by declaring, “The best use for the Grand Canyon would be to turn it into a toxic waste dump.” We should not be surprised when people who despise all creation turn out to despise their neighbors and fellow citizens.
At first, it seems like a paradox—that the very people arguing for free trade are in fact calling for greater regulation and at a level more distant from businessmen and consumers. But the free trade religion is nothing but a paradox—if that is the right word for talking out of both sides of your mouth. Radical free-traders cannot even make up their minds about their basic principle. One minute they are taking the high ground that free trade is an ultimate good, the summum bonum of human existence, but in the next minute they are claiming that the real bottom line, so to speak, is the welfare of the consumer.
How do we answer such an argument? If you think that “getting and spending” is all there is in life, I have nothing to say to you. You need prayers, not arguments. When an economist like Gary Becker tries to analyze the family as a set of competing individualists, he only reveals his ignorance of human nature and his superstitious reverence for a science (sociobiology) that he does not understand. The problem, in Becker’s case at least, is not lack of principle or intelligence (he clearly has both), but starting with counter-factual assumptions—crudely put, they are individualism and materialism—he cannot understand man as a social animal. Putting his faith in economic theory and in the reductionist abstractions of biologist Robert Trivers, Becker constructs a picture of man in which only individuals exist. When economists put social relations under the microscope, groves and copses (families and communities) disappear; forests (or nations) are defined out of existence.
Economics, however, is not a religion, and markets are not gods, much less God. They are a human mechanism to provide for human needs. Even in the ideal, the purpose of a market is not to produce the greatest “efficiency,” because markets are not an end in themselves; they are supposed to serve the convenience and happiness of human beings. This is one of many valuable lessons I have learned from Austrian economists like Murray Rothbard, who rejected a conception of value based on labor and stuck to the central point: that value is subjective and should always be translated to mean “valuable to someone.” It would have been much more “efficient” for Murray to write on a computer, and his friends persuaded a genius to design a system just for Rothbard. After spending some time in consultation with the retrograde libertarian, the computer wiz gave up in despair, telling Murray’s friends, “I’ve just designed the manual typewriter.”
This is a roundabout and crude way of suggesting that there is no one trade policy that fits all situations, just as there is no one political system that is best for all peoples, no ice cream flavor to please every individual. In many situations, low tariffs, even no tariffs, are a good idea for a country, particularly when the benefits are shared by the majority of the citizens. When a nation is building an empire or dominates world trade or is in a very strong position, as Britain was in the early 19th century and the United States was after World War II, free trade may be sound nationalist doctrine. But when a nation wants to defend its cultural and political independence, its people might well wish to erect a tariff barrier around it—particularly when, like the United States today, it is experiencing an identity crisis.
Even in purely economic terms, low tariffs are not inevitably a blessing. During the current period of lowered tariffs, since 1973, real household income appears to have been steadily going down. I say “appears,” because I do not trust economic statistics any more than I trust opinion polls. Whatever else can be said, American workers—and consumers—are not better off than they were 25 years ago. Of course, there may be other reasons for the dismal trajectory of lowering expectations, but more than a few economists—even those believing in global free trade—concede that competition from the more cheaply paid workers of Asia and Latin America have helped to keep real wages from keeping pace with the rising cost of living.
The slide in real income since 1973 has been described by some economists as the longest in American history. Average Weekly Earnings (a Department of Labor statistic that covers 80 percent of employees, but excludes physicians and executives) have been declining steadily since 1975, and the fall is even steeper if increased Social Security rates and higher sales taxes are taken into consideration.
On the other hand, while the great majority (the percentage depends on which calculations one accepts) of American families have suffered an economic decline, the top one percent have gained tremendously. “So what?” say the free-traders. Here’s what: America, as Rush Limbaugh reminds his listeners every day, is already torn apart by the politics of envy. Widening income disparity is an open invitation to liberal Democrats to take over the middle classes. Simply on the practical level of getting votes and winning elections. Republican strategists act as if they are part of an insane plot to alienate the Reagan Democrats: their vision of free trade and open borders has cost them the White House twice, and here in Illinois it looks as if the first Democratic governor in over 20 years will be Glenn Poshard, a Buchananist who opposes abortion, gun control, unrestricted immigration, and free trade.
The income gap is turning into a chasm, but at least that top one percent of economic winners are nominally Americans. The real scandal of free trade is the rise of transnational corporations which now dominate world trade (according to the World Bank, 70 percent of international trade is in the hand of transnationals). In 1990, the top 500 transnational controlled two-thirds of world trade, and almost 40 percent of world trade is carried out within transnationals themselves. In fact, the top 15 have incomes greater than the GDPs of 120 countries. Some of these transnationals are not so much corporations as pirate states with no loyalty to any of the countries in which they operate. Some years ago, a chairman of NCR said he did not worry about the balance of trade because NCR was not an American company, only a transnational that happened to be located in the U.S., and both Sam Francis and Pat Buchanan can cite a string of similar anti-national platitudes uttered by “American” CEOs.
But let American-based transnationals have a problem—a revolution in the Persian Gulf or labor violence at a plant—and they will come screaming to Washington for help from the friends in Congress they have so generously supported. Having their cake and eating it, these pirate states are not only protected by the laws and the Armed Forces of the United States, but they are also given privileged access to our consumer markets.
When free-traders hear these arguments, they will either find a million reasons to show how we really are better off—freer to choose one pair of cheap shoes over another—or, if they are candid, they might tell you that frankly they do not give a damn. “The world is shrinking,” they will say, “and we can no longer afford to care more about our neighbors than about strangers on the other side of the globe.” For them, man does live by bread alone, and in this age of packaging and preservatives it does not matter whether the Wonder Bread is manufactured in Maryland, in Mexico, or on the moon.
Looking down from the moon, James Bovard has concluded that religion and nations, as well as history, are bunk: “Our great grand-children may look back at the trade wars of the 20th century with the same contempt that many people today look at the religious wars of the 17th century—as a senseless conflict over issues that grown men should not fight about.” What this bit of lunacy comes down to is an unreasoning worship of free trade coupled with contempt for other religions as issues “that grown men should not fight about.” I suppose this is why free-traders take a similar view of immigration. If America becomes a Muslim or a Buddhist country, what is the difference? So long as the only real God is Mammon and the only real nation is the great international marketplace that makes no distinctions between peoples or nations.
In Trade there is no East or West,
In Trade no South and North,
But one great multi-national
Throughout the whole wide earth.
Pols on the take and bureaucrats
Shall comfy nest-eggs find
When they have knit the golden cord
To strangle all mankind.
The real heart of the trade debate is not income or prices but sovereignty. The free trade agreements entered into by the United States not only violate our Constitution—a small thing, perhaps, since our own government does that every day—but they also erode our sovereignty. This is obvious from the global apparatus of rigged trade established by NAFTA and GATT, but the World Trade Organization set up in the last round of GATT alarmed even some knee-jerk free-traders.
The WTO is a secret organization whose meetings are closed to the press, and it has the right to settle trade disputes between the U.S. and other nations and the power to enforce its decisions. If two nations have a disagreement over trade, the Dispute Settlements Panel appointed by the WTO can strike down any federal or state law that is ruled inconsistent with free trade principles. In other words, it will act as an international supreme court of trade that supersedes our national and state courts and legislatures.
The Office of Management and Budget estimates that the regulations imposed by the most recent GATT phase (Uruguay round) will increase the federal deficit by $40 billion over 10 years. As Paul Craig Roberts, an honest free-trader, has written: “I would prefer my fate to be in the hands of the people—including textile magnates—than in the hands of a bureaucracy,” If Mr. Roberts will some day extend his analysis to the international welfare bureaucrats who run IBM and Royal Dutch Petroleum, he could be Pat Buchanan’s Secretary of Commerce.
The trade dispute, as I suggested at the beginning, is not about numbers but about words, and radical free-traders work hard to conceal the truth. (Bruce Fein describes their tactics as a mixture of “glibness and dissembling.”) Free-traders are fond of denouncing national (and local) governments for corruption, inefficiency, stupidity, and here they are clearly on solid ground. I fully share their opposition to the federal government’s growing power to regulate even,’ aspect of our commercial life. I am even willing to agree with them that many American industries —automobile manufacturing, for example —may deserve their fate, and economic nationalists might well consider linking automobile tariffs to across-the-board cuts in the salaries of corporate management and the return of jobs and factories from Mexico to Detroit.
But what would the free-traders substitute for the current corrupt system of competing nations? Not no government, but world government. This is where their radical individualism leads them: to the destruction of every barrier between us, the American people, and a gangster world-state owned and operated by George Soros, Boris Berezovsky, and K. Rupert Murdoch.
But so long as Boris is free to trade with George and Rupert, the free-traders are content. In the grim Looney-Toons world of James Bovard, no government can restrict any intercourse between one nation and another: “If the government prohibited Americans from corresponding with citizens in the rest of the world, no one would deny that citizens’ liberties had been trampled.” What he does not seem to know is that virtually every country in history has taken an interest in its citizens’ foreign connections with potential or actual enemies. The Logan Act, for example, explicitly prohibits Americans from practicing what we now call citizen diplomacy—the best example being Jesse Jackson’s freelance trips all over the world, claiming to conduct economic and political negotiations with foreign nations. We allow Mr. Jackson to go on flirting with treason only because we are too cowardly to stop his game of racial politicking.
Many policies restricting foreign contacts went too far, but anti-nationalists would like to deny in principle a nation’s right to protect itself by controlling intercourse with foreign nationals, sealing the border against the invasion of illegal immigrants, or punishing Asian businesses that, with the connivance of their governments, not only take advantage of our gullibility but have even managed to buy into the Democratic Party and the Clinton administration.
John Huang and Johnnie Chung believe in free trade—for the United States at least—except that this trade is not really free: it costs the governments and businesses of Taiwan, Japan, Korea, and Indonesia billions of dollars in lobbying. Asked if he was working for the Red Chinese government, Johnnie Chung explained that he thought it was normal for people to be loyal to their ethnic heritage. Compared with the politicians who take foreign money and sell out their country’s interest, Johnnie Chung is an honorable man.
When it comes down to it, the free-traders believe that men and women are not really French or American, not really Christians or devil-worshippers; they are only rational producers and consumers, rootless hedonists and utility-maximizers who could just as well be born from a test tube as from a mother’s womb. They acknowledge no social ties except that of the contract for mutual exploitation. Concepts like “loyalty” and “treason” are as alien to them as they were to Red capitalists like Armand Hammer.
During the Cold War, conservatives liked to tell a fable of Lenin, who had spoken of hanging the capitalists. Asked where he was going to get the rope, the humorless dictator replied, “They’ll sell it to us.” When the questioner persists and asks, “Where will we get the money?” Lenin answers, “They’ll lend it to us.”
The big-money boys of the capitalist West (in and out of government) have changed their rivals but not their attitudes. They will sell arms to both sides in an African civil war and poison gas to Saddam Hussein; and if a tin-pot dictator bankrupts his country buying fighter planes, computer systems, and oneway railroads, the New York banks will be happy to give him a loan backed by the World Bank and the American taxpayer.
Money, in their view, is an amoral force of nature like sex or the libido dominandi. A rutting elk will battle his father for the privilege of bedding his mother, and a man who lives for money only will call you a fool or a liar if you speak the language of friendship and patriotism, because nothing should be allowed to interrupt the free flow of money. Religion and culture, families and nations, are just so many unnecessary earthen dams vainly trying to hold back the onrushing tide of global trade. Try to stop it, and you will be crushed and swept into the great muddy river of progress.
In the good old days, American conservatives had to do battle with an evil globalist ideology called communism. They had their differences, but they agreed on what they were against. Today, they are confronted by a different evil globalism, the ideology of free trade and open borders and world government. If conservative Republicans refuse to stand up to this menace, then the only way they are going to get into the White House is by buying a ticket and taking the tour.