Monday, January 08, 2007

The immorality of the new protectionism

This morning National Public Radio interviewed one of the newly minted freshmen U.S. senators, Sherrod Brown (D.-Ohio). Senator Brown gave what I thought was a surprisingly blunt attack on free-trade agreements. He also asserted that this is the sentiment of most of the Democrats in Congress, especially the new ones, and of many Republicans. It is an unfortunate development, if true.

All protectionists eschew the label “protectionist.” To be protectionist is to be retrograde, and a fan of the sorts of actions that made the Great Depression much worse. Instead, the modern protectionist calls for “fair trade.” What he says is that he wants labor and environmental standards for developing countries incorporated into any agreement. What he means is that he wants developing countries to cede much of their comparative advantage, and thus to be left with little prospect for future growth. Developing countries often have weak infrastructure because they are poor, their workers have few skills because they are poor, and the quality of governance is not good in part because they are poor. All of the things that Senator Brown hopes will occur in these countries can only occur while and after they become rich, not before. The history of every country that has successfully modernized testifies to this fact.

The consequences of the new protectionism, which is hardly confined to the Democratic Party in the US are to the left in the West generally, are potentially catastrophic. Not so much because what is being negotiated in the current round of trade talks is all that substantial – world trade has already been substantially freed since the late 1940s – but because it threatens a reversion toward more protectionism, rather than a continuation of the sixty-year trend toward less. The new protectionism is also backward, no matter what its advocates say. A nation that walls itself off dies.

But perhaps most important is the moral weakness of the case for protectionism. Simply stated, it is not a proper function of the US government to prevent poor people in places like Bangladesh or Guatemala from trying to earn a living. Indeed, to actively obstruct these efforts is a moral crime of the highest order. Everyone who criticizes the US for its allegedly inadequate foreign aid (much of which does more harm than good) should be forced to take a look at the relation between open trading systems and economic growth, and to think about the damage to the world’s most miserable that would be done if the world's largest market. the U.S., were to revert toward an obsolete economic policy. The primary objection to protectionism is not that it is inefficient, although it is. The primary objection is that it is harshly discriminatory toward the poor.

The reader may object that it is the function of the US government to look after Americans. But very little in our constitutional or ideological history suggest that it is the function of the government to guarantee that a particular person has a particular job. Free trade and free commerce more generally guarantee that every American can try to earn a living unobstructed by the government, not succeed. What is critical is that the government provide the opportunity for the individual to go as far as his efforts will take him, while providing the same opportunities to everyone else (the consumers of imported products and those who work in industries that rely an imported goods, for example). The function of the government, in other words is to symmetrically protect everyone’s unalienable rights.

Thus, the second objection to protectionism is that it is discrimination – in favor of those with more political influence (organized workers) and against those with less (consumers and desperately poor people in other countries). In this, it is like all laws that depart from the principal of equality before the law – of giving everyone identical rights that do not come at the expense of the rights of others. Indeed, I am struck by at least my inability to find in any of the world's admired ethical codes – whether religious (Christianity, Buddhism, etc.) or secular – any rationale for discriminating in favor of (some of) one's own nationals. Of discriminating, in other words, in favor of those workers whom Senator Brown opportunistically refers to as the vanishing middle class, and against everyone else, both here and abroad.

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