SHARE
Wiki­media Commons | Courtesy

Dear Editor,

Mr. Grisedale, in his piece “Free trade isn’t a prin­ciple, it’s a policy,” in the Sept. 6, 2018 edition of the Hillsdale Col­legian, argues that pro­tec­tionism is the prag­matic choice and free trade isn’t rooted in any sort of prin­ciple. I believe his analysis makes a number of errors, both eco­nomic and his­torical. 

First, nations do not trade, indi­viduals do. While we say “the United States” trades with “China,” this is shorthand for “indi­viduals in the United States” trade with “indi­viduals in China.” 

Pro­tec­tionism, in con­trast to the pop­ulist con­ception of it that Grisedale has, only ben­efits a small, con­cen­trated group (domestic pro­ducers of the pro­tected industry) at the expense of con­sumers and other pro­ducers, who face increased costs and less avail­ability. 

Free trade is a prin­ciple which should man­ifest as a policy, rooted in an under­standing of eco­nomic truth and liberty. Free trade is unabashedly good, though it does have costs. Those who cannot compete with overseas pro­ducers will go out of business, resulting in decreased domestic employment. These costs, while real, are enor­mously out­weighed by the ben­efits of free trade to con­sumers, and all other pro­ducers, who have access to cheaper goods in greater quantity. 

The assumption that, because China places tariffs on U.S. goods, the United States must also place tariffs on Chinese goods, is fal­la­cious. For one, tariffs over­whelm­ingly harm domestic con­sumers and pro­ducers.

 Grisedale’s pre­scription is akin to me shooting myself in the foot, on the premise that my neighbor is also shooting himself in his foot, in a misled scheme of false revenge. Trade deficits are not inher­ently bad. They simply show that indi­viduals within the United States imported more goods than they exported, usually due to either lower costs or superior quality. 

While free trade does allow indi­viduals to pur­chase desired goods from overseas, I can’t find any reason to blame free trade for drug overdose deaths, as  Grisedale does. This assertion is roughly equiv­alent to blaming free trade in auto­mo­biles for the approx­i­mately 40,100 people killed in vehicle deaths in the United States in 2017. 

 Grisedale blames the trade deficit for a “hol­lowing out” of a man­u­fac­turing base in the United States. Yet, man­u­fac­turing output in the United States is roughly as high as it has ever been. According to data from the St. Louis Federal Reserve, man­u­fac­turing output in Q2 2018 was just below its pre-Great Recession peak. The United States also remains the world’s largest economy and man­u­fac­turing wages con­tinue to increase, con­trary to Grisedale’s  claims of falling wages. 

In addition to missing the mark on eco­nomic grounds, Grisedale gets the his­torical facts wrong . While pro­tec­tionism was a sec­ondary goal for the Tariff of 1789, the primary purpose was to collect revenue for the newly formed federal gov­ernment, which had few other means to fund itself at the time. 

 Grisedale is correct that Henry Clay, Abraham Lincoln, and William McKinley were all ardent defenders of pro­tec­tionism, but they were equally flawed correct in their assessment of its merits. 

In par­ticular, McKinley’s claim that the United States is in danger of destruction by the removal of tariffs is mis­taken. His flawed use of war-like lan­guage to describe trade is not new. As French political econ­omist Frederic Bastiat wrote the over 150 years ago in Eco­nomic Sophisms, “What analogy is there between an exchange and an invasion? What pos­sible sim­i­larity can there be between a warship that comes to vomit mis­siles, fire, and dev­as­tation on our cities, and a mer­chant vessel that comes to offer us a vol­untary exchange of goods for goods?”

 Grisedale is correct that the Repub­lican Party has his­tor­i­cally been a pro­ponent of pro­tec­tionism. As is the case with his other appeals to his­torical authority, the fact that Repub­lican pres­i­dents sup­ported pro­tec­tionism does not make it a good idea. 

The assertion that all the United States gains from freer inter­na­tional trade is “foreign trinkets” is laughable. The vast increase in wealth, stan­dards of living, and employment as a result of free trade cannot be under­stated. Amer­icans over­whelm­ingly benefit from free trade.  

Pro­po­nents of pro­tec­tionism, many of them ded­i­cated sup­porters of Donald Trump, may find them­selves sur­prised when the out­break of another trade war at his behest ends in impov­er­ishment and failure. I’ll close with another great piece in the Western canon, albeit later than Voltaire’s “Candide.” As Ronnie James Dio sings in Rainbow’s 1976 classic “Stargazer”:

All eyes see the figure of the wizard

As he climbs to the top of the world

No sound, as he falls instead of rising

Time standing still, then there’s blood on the sand

Oh I see his face!

Where was your star?

Was it far, was it far?

When did we leave?

We believed, we believed, we believed.

Tyler Groe­nendal is a ‘16 alumnus and is the Foun­dation Rela­tions Coor­di­nator at the Acton Institute.