The New Socialists
Any doubt about the inherent hostility towards capitalism among ‘progressives’ should be dissolving rapidly among even the most blinkered partisans. Witness the following op-ed in the WaPo from Sherrod Brown and Byron Dorgan:
Fewer and fewer Americans support our government’s trade policy. They see a shrinking middle class, lost jobs and exploding trade deficits.
Yet supporters of free trade continue to push for more of the same — more job-killing trade agreements, greater tax breaks for large corporations that export jobs and larger government incentives for outsourcing.
Last month voters around the country said they want something very different. They voted for candidates who stood up for the middle class and who spoke out for fair trade.
It can’t be put any more plainly than that. Two Democratic senators are openly declaring hostility towards free trade.Â
Let me repeat that for emphasis, because it’s important:
Two Democratic senators are openly declaring hostility towards free trade.
Let us not pretend that fair trade is free trade under another name; it is not, and we see that its proponents don’t believe it is, either.
In fact, we can call this what it is: socialism.Â
Free trade is not an option for continued growth in the United States. It is a necessity. In point of fact, globalization makes it MORE of a necessity than it has ever been.
I can’t forcefeed Adam Smith to the entire population of the United States, but I can’t put it any simpler than this: if capital finds a more profitable home than America, capital will leave America. You can’t legislate ‘fairness’ in trade; all you can do is introduce inefficiencies that lower the return on capital.Â
Sherrod Brown, James Webb, and other protectionist Democrats may say they’re for the working man, but the truth is they are putting a nail in his coffin. They will kill this economy if given a chance. No domestic issue is more important than the protection of our capitalistic, free enterprise culture. Milton Friedman is already turning in his grave…
Hi Mark,
All throughout my life I’ve been asked to give to charity in order to help the poor people in China, India, Africa, and other undeveloped parts of the world. This charity always resulted in a greater need from those countries receiving charity. Finally, after 20 years of free trade, India and China, no longer need charity because they have developed an economic infrastructure which allows freedom of choice regarding work and purchasing decisions.
Sadly, some of the greatest enemies of freedom are members of the American government and the citizens who elected them. Freedom is a paradox; the more freedom we allow others to have, the more freedom we will have and the less freedom we allow others to have, the less freedom we will have. Hopefully, free trade will prevail, but if it doesn’t, let’s be clear, Americans will have chosen to be less free.
Thanks for being on the side of freedom, Mark.
I’m all for free trade, but I wouldn’t point to India or China as examples. Both countries place strict limits on Western businesses operating within their borders or buying equity stakes in domestic companies, and China restricts foreign purchases of real estate. China has rampant theft of foreign intellectual property, and foreign pharmaceutical companies have limited IP protection in India. China does not allow its currency to trade freely. Both countries have paternalistic governments which support large parts of their populations.
China and India are prospering (relative to their recent past) because they have an enormous amount of cheap labor, and both countries have entrepreneurial traditions and some very bright people to capitalize on them.
The excerpt from the op-ed may be demagoguery, but there is a legitimate point to be made. Some American industries cannot compete with Chinese industries because the latter use child labor, compete unfairly due to a managed exchange rate, and enjoy government subsidies. At the same time, American companies are not able to recoup their intellectual property — whether a Tom Cruise movie, Microsoft software, or cholesterol drugs — because they are copied or reverse engineered in China. So while it’s all well and good to say that capital seeks its greatest return, there is also the countervailing need to ensure that competition takes place on a level playing field. At what point is it appropriate for the government to restrict free trade to protect American interests?
Hi Peter,
You have some valid concerns. However, the solution to your concerns is for China to be more like the United States not for the United States to be more like China.
Initially, I was opposed to Most Favored Nation trade status for China for some of the same reasons you mentioned. I also considered China to be an enemy of the Untied States. As it has now turns out, I was wrong.
Relations between China and the United States have improved and China is much less likely to take military action against its neighbors now because of all of the customers outside of China buying Chinese produced products. Freedom has prevailed over force.
Sure China is not perfect, but neither is the United States. China is becoming more free through the process. I am still concerned about child labor practices and even slave labor in China, but what we are seeing is more people in China participating and benefiting from trade with the world.
China may appear to have a competitive advantage in many of the cost areas now, but if China does not continue to allow more freedoms, they will end up with many disadvantages due to the relative freedom in India and other countries.
I can’t think of a single country in history that maintained a trade advantage and then prospered through government control. I can name country after country, including present day China, that developed trade advantages through free enterprise.
We need to choose freedom over control even if the freedom we enjoy is not perfect freedom and we need to support freedom in other countries even if the freedom they allow is not perfect. Better should not be the enemy of best.
David, I agree with everything you say — my only point is that the issue is more nuanced than a choice between laissez-faire economics and mercantilism, and not all decisions should be tilted towards the former.
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