{"id":410398,"date":"2010-03-09T19:19:07","date_gmt":"2010-03-10T00:19:07","guid":{"rendered":"http:\/\/worldtradelaw.typepad.com\/ielpblog\/2010\/03\/the-great-trade-debate-fletcher-reply-3-to-dan-griswold-on-free-trade.html"},"modified":"2010-03-09T19:19:07","modified_gmt":"2010-03-10T00:19:07","slug":"the-great-trade-debate-fletcher-reply-3-to-dan-griswold-on-free-trade","status":"publish","type":"post","link":"https:\/\/mereja.media\/index\/410398","title":{"rendered":"The Great Trade Debate: Fletcher – Reply #3 to Dan Griswold on Free Trade"},"content":{"rendered":"

by Ian Fletcher<\/em><\/o:p><\/p>\n

Dan has again dragged irrelevant issues into this debate; I shall let the reader judge whether I am guilty of Maoism!<\/p>\n

Dan\u2019s conflation of protectionism with communism and related economic pathologies is telling: free traders of Dan's variety (ideologically-committed libertarians) habitually roll up all economic questions into one big homogenous ball.  For them, all economic questions are the same\u2014because abstract ideology tells them so\u2014and the answer to every question is 100.0% economic freedom, 100.0% of the time. This is an extremist position belied by America\u2019s experience in our domestic economy, where we rejected pure laissez faire<\/em> a long time ago.  It is also symptomatic of a larger inability to understand the complex reality that China, for example, is not a 100% capitalist economy, but a hybrid of central planning and free markets.  According to Dan\u2019s ideology, China should be broke by now.<\/p>\n

Dan disputes that the U.S. historically succeeded by means of protectionism.  But if free trade had been the winning move in the era of America\u2019s industrialization from the Civil War to World War One, free-trading Britain would have outpaced protectionist America and Germany rather than declining in relative terms.  American tariffs indeed raised the prices of industrial machinery et cetera<\/em> in the short run, but encouraged the development of a domestic machinery sector that liberated the U.S. from dependence on foreign suppliers.  If not for this, we'd quite possibly still be the commodities-dominated economy we once were and other New World nations remained.<\/p>\n

Dan is correct that there is nothing new about my arguments; the problems with free trade have been known for centuries, which is why every single developed nation got that way by means of protectionism and industrial policy.  For the details,  please see Chapter Six of my book Free Trade Doesn\u2019t Work<\/em>, which is entitled \u201cThe Deliberately Forgotten History of Trade.\u201d <\/p>\n

Dan\u2019s assertion that China\u2019s policy in recent years has been \u201cto unilaterally lower its barriers\u201d is Soviet false.  Dan has been taken in by paper tariff reductions belied by the more fundamental real-world fact of gargantuan Chinese trade surpluses against the U.S.  A low tariff at the border means nothing if non-tariff barriers exist behind it.  These range from currency manipulation to the inbred cross-shareholding relationships between corporations that freeze out foreign suppliers. <\/p>\n

Many of Dan\u2019s arguments, like those of free traders generally, continue to be valid\u2014but they are arguments for trade, not free<\/em> trade.   This is the same logic that was once used to prove that because labor is beneficial, unregulated labor must be best: no minimum wage, no child-labor ban, no limits on hours or working conditions.<\/p>\n

Any happy income figures Dan quotes from the last few years largely reflect an unsustainable financial bubble.  And if you take out government employment, there is no improvement in service industry incomes.  <\/p>\n

The myth that the Great Depression had anything to do with protectionism has been debunked by economists from Paul Krugman on the left to Milton Friedman on the right, the latter a card-carrying libertarian.  The official State Department evaluation at the time found no sign of a trade war, and the tariff changes in question were actually quite small.<\/p>\n

Dan\u2019s and my differing contentions about world poverty derive from using absolute vs. relative measures. (See http:\/\/siteresources.worldbank.org\/DATASTATISTICS\/Resources\/WDI08supplement1216.pdf<\/a> , p. 10.)  What even Dan\u2019s data do not deny, however, is that what progress against poverty there has been, has been concentrated in nations like China which employ neomercantilist trade policies as a development tool, not free trade.<\/p>\n

**********************<\/p>\n<\/p>\n

<\/p>\n

Ian Fletcher is an Adjunct Fellow at the U.S. Business & Industry Council, a Washington-based think tank founded in 1933, and author of the new book Free Trade Doesn\u2019t Work: What Should Replace it and Why, available on Amazon.com<\/font><\/a>. USBIC\u2019s web site is at <\/span>americaneconomicalert.org<\/font><\/a>; the website for Ian\u2019s book is at freetradedoesntwork.com<\/font><\/a>; Ian\u2019s page at USBIC is at <\/span>usbic.net\/ianfletcher<\/font><\/a>; he may be contacted at <\/em>ian.fletcher@usbic.net<\/font><\/em><\/a>.<\/em><\/span><\/span><\/span><\/p>\n

(For the free trade view, see Dan Griswold's post <\/span>here<\/font><\/a>) <\/span><\/span><\/span><\/span><\/span><\/span><\/span><\/span><\/p>\n

<\/span><\/span><\/p>\n<\/p>\n<\/p>\n<\/p>\n

\n<\/img><\/a> <\/img><\/a> <\/img><\/a> <\/img><\/a> <\/img><\/a>\n<\/div>\n

<\/p>\n","protected":false},"excerpt":{"rendered":"

by Ian Fletcher Dan has again dragged irrelevant issues into this debate; I shall let the reader judge whether I am guilty of Maoism! Dan\u2019s conflation of protectionism with communism and related economic pathologies is telling: free traders of Dan's variety (ideologically-committed libertarians) habitually roll up all economic questions into one big homogenous ball.  For […]<\/p>\n","protected":false},"author":4125,"featured_media":0,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[7],"tags":[],"class_list":["post-410398","post","type-post","status-publish","format-standard","hentry","category-news"],"_links":{"self":[{"href":"https:\/\/mereja.media\/index\/wp-json\/wp\/v2\/posts\/410398","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/mereja.media\/index\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/mereja.media\/index\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/mereja.media\/index\/wp-json\/wp\/v2\/users\/4125"}],"replies":[{"embeddable":true,"href":"https:\/\/mereja.media\/index\/wp-json\/wp\/v2\/comments?post=410398"}],"version-history":[{"count":0,"href":"https:\/\/mereja.media\/index\/wp-json\/wp\/v2\/posts\/410398\/revisions"}],"wp:attachment":[{"href":"https:\/\/mereja.media\/index\/wp-json\/wp\/v2\/media?parent=410398"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/mereja.media\/index\/wp-json\/wp\/v2\/categories?post=410398"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/mereja.media\/index\/wp-json\/wp\/v2\/tags?post=410398"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}