The Free Market 15, no. 10 (October 1997)
Free trade and peace go together; protectionism is the handmaiden of war. These were key teachings of the early classical economists, as well as the Austrians. Consistent libertarians have never doubted it. But recently the theory has come under fire from all sides—and led to dangerous coalitions pushing for the worst of all worlds, autarky and military belligerence.
The lies usually begin with the word “isolationism.” It was FDR’s smear term for the mass movement trying to prevent the U.S. from intervening in another horrific European war. Isolationism meant the desire to keep the troops out of harm’s way. But this position by no means precluded trading relations. Sweden, Portugal, and Switzerland, for example, spared themselves disaster by adopting the American framers’ policy of military neutrality and trade with all sides.
Fast forward to the end of the war, when Harry Truman and his cronies had the bright idea of blowing billions in foreign aid. The “isolationists,” said Truman, opposed it in favor of letting free markets rebuild Europe. Fast forward again, to George Bush and his Gulf War. The people who opposed risking American lives to preserve Saudi domination of oil markets were also denounced as isolationists. Also “isolationist” were those people who, four years later, opposed the preferential, tax-funded, regulated trade cartel of Nafta.
So far, then, it appears that holding an isolationist position is an unmitigated good: against war, against foreign aid, against preferential trade agreements, but for free trade. Should the term be worn as a badge of honor?
Not quite yet, for the great China debate has hugely complicated matters. On one side, there are people who want to treat China as part of the community of nations, by encouraging its 15-year experiment in capitalist economic policies. This has resulted in a historic economic boom of double-digit annual growth, unprecedented freedom and prosperity for huge elements of the population, and a dramatic decline in government power. Within the lifetimes of every middle-aged person, the country has moved from mass starvation and terror to accommodating huge commercial centers that rival Houston and Montreal. The Chinese authorities can call it communism if they want to, but the system rising there is more Mises than Marx.
On the other side of the China debate is a motley coalition of activists--invariably called isolationists--who know and care nothing about economics, and, in fact, show disdain for it. This coalition includes old-time warmongers hoping to use China as the preferred enemy in a renewed Cold War. It includes labor unions who want to stiff-arm American consumers into not buying Chinese products. It includes the managers of protectionist industries who want to keep products out. It includes the munitions manufacturers who need another excuse for a government contract.
And, of course, it includes clueless national socialists who oppose all forms of international trade. They delude themselves into viewing economic exchange as a form of warfare that compels retaliation. They use phrases like “China’s aggressive trade and military policies” as if a boatload of party hats is the equivalent of a bomb. They attribute the very existence of trade to entities like the “China Lobby,” as if there weren’t millions of people here and there who benefit.
They go so far as to compare China to the old Soviet Union, as if our only option is a nuclear showdown, or, in the case of William Hawkins, adviser to Rep. Duncan Hunter of California, Hitler’s Germany, as if the only option is world war. Every uptick in Chinese prosperity, far from being a cause for celebration, is a disaster. Hawkins, whose salary is paid by the taxpayers, sees a security threat in the fact that “trade and investment is helping that country’s infrastructure and industrial base.” Precisely: that’s what it is supposed to do, and that’s why trade and free enterprise is a great thing. Why is it necessary to point this out?
What makes this menacing anti-China coalition unusual is the addition of certain elements of the religious right. They say the Chinese government violates human rights, suppresses religious liberty, and uses slave labor, and therefore “we” (meaning the U.S. government) ought to shut down its booming trade relations with the U.S.
At one time, these same people cared intensely about violations of religious liberty here at home. They had seen the Waco massacre, seen homeschoolers rounded up for educating their children, seen pastors dragged off to jail for refusing to register their church schools, and fought the Supreme Court on a host of issues where it has usurped individual, family, and local rights. They battled the real enemy: their own government, which has subsidized cultural breakdown and suppressed religious freedom at every turn.
What’s happened? Did they get bored with the fight that really matters? Certainly it’s easier, and much more respectable within the beltway, to fight real and alleged infractions halfway around the globe than to face the awful reality of Leviathan here at home. But it’s a grave error that can only lead to political and economic disaster.
Are there no prisoners of conscience in U.S. jails that merit attention? Is it not slave labor that Americans are forced to work half the year to pay the tax bill before they can begin providing for their families? Are no religious rights being violated when a distant central government prevents a local school choir from singing carols at the school play? Is religious liberty secure when an unconstitutional national police force torches and murders an entire religious community, and then jails the few survivors for 40 years?
The tragedy is this: by focusing on distant crimes we cannot prevent, while ignoring those at home we can stop, we play right into the hands of big government. Punishing China with embargoes and trade restrictions does nothing to improve life in China, even while it strengthens the hand of government here at home. We put the real enemy of liberty in charge of telling American producers and consumers what they can and cannot buy from abroad, and at what prices.
Further, the anti-China crowd is proposing to punish the Chinese people for the infractions of the Chinese government. The stakes are huge. U.S. and Chinese corporations are in the process of developing joint ventures to open up new and hugely profitable shipping lanes from California to the northern regions of China that have not yet benefited from the economic boom. If a trade war breaks out, as the actual isolationists would like, all of this would be lost, and millions of people would be condemned to continued poverty. How can the anti-China protectionists live with this on their consciences?
It’s fashionable these days to disparage people’s desire for consumer goods obtained through international trade. American consumers who don’t want to pay higher prices or join the trade war are said to be greedy and materialistic, putting Tickle-Me-Elmo dolls ahead of human rights. Similarly, we are encouraged to curl our lips at the idea that the Chinese people want to gain access to fast-food hamburgers--which we take for granted but which would be a dream-come-true for people who have lived under the communist yoke for so long.
If we believe in liberty, we must understand that economic liberty is the most important kind. It is what touches our lives in the fullest possible way. What is the alleged right to vote compared with the real right to start a business, draw wages according to our productivity, keep the fruits of our labor, feed our family, save for the future, create a civilization? These are all components of capitalism, the only system truly compatible with the first and most important of human rights: the right to own and control what is yours.
The old classical liberals linked trade and peace because people with a commercial interest in good relations are likely to urge their own governments not to pursue the path of destruction and barriers. It’s true in the Chinese case too. Disparage international business if you want, but as a lobbying force, we have it to thank for dousing the flames of war that labor unions, domestic bomb makers, and national socialists keep trying to fan.
It’s a small step from advocating blockades with a country to urging full-scale military attack. Mr. Hawkins warns that the U.S. needs to “hobble China.” How? By using “America’s current advantage in economic and military strength to fortify its preeminence in Asia.”
U.S. “preeminence in Asia”? Can we imagine Washington or Jefferson talking that way? Why don’t we just set up a world government and run the entire planet while we’re at it? If that’s what the U.S. has in mind, it’s a recipe for global tyranny. It would bankrupt this country. It would make the U.S. Constitution --already ignored--a permanent dead letter. It would keep Leviathan’s grip fastened on the American people until the end of time. It would lead to perpetual war in the name of perpetual human rights.
China bashing and protectionist thinking is not kid’s play. Because the U.S. government uses it to its own advantage, it represents a real threat to our liberty and property.
We’ve lived through a hellish century of protectionism, war, socialism, and mass destruction, with governments holding the world’s civilian population as hostages in their evil political games. Our choice today is what it has always been: peace and free trade with all, or trade wars, cold wars, and real wars that only government can win.
Llewellyn H. Rockwell, Jr., is president of the Ludwig von Mises Institute.
