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Is Protectionism Patriotic?

Summary:
The horseshoe theory may rest on a false left-right spectrum, but attacks on economic freedom animate both the Bernie Sanders socialist left and the Trumpite protectionist right. As I noted last week, some conservatives of late have become especially enthusiastic about attacking the freedom of Americans to buy and sell freely without government interference. In ...

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The horseshoe theory may rest on a false left-right spectrum, but attacks on economic freedom animate both the Bernie Sanders socialist left and the Trumpite protectionist right.

As I noted last week, some conservatives of late have become especially enthusiastic about attacking the freedom of Americans to buy and sell freely without government interference. In fact, these conservatives insist there is too much market freedom, and that this has led to the destruction of the middle class, and growing exploitation of the poor by the rich.

The fashionable target at the moment is "libertarians," usually vaguely defined, but would appear to include anyone who doubts the US government can make us better off by slapping higher taxes on imports, skimming 35 percent off the top of national income, and inflating the money supply.

For their part, these protectionist conservatives raise few objections to the nation's record-breaking deficits, and its crushing tax and regulatory burden imposed on productive Americans. After all, in their minds, America became a great nation in the nineteenth and early twentieth century thanks to protectionism and the so-called "American System" of high taxes, big subsidies, and more bureaucracy.1

They have always been wrong about that. In fact, the fortunes of the middle class in this country have suffered as growth in government regulations and taxes have made it harder to earn a living. But conservatives aren't about to let themselves be limited by mere arguments for freedom and economic prudence. They have another argument up their sleeve: namely, that leaving people alone to trade freely with others is unpatriotic. All this freedom is destroying society, they tell us, and we need government to intervene and force everyone to do what's right for "the nation."

Forget Freedom — We Need National Greatness

This apparently suits many conservatives just fine, and conservatives have historically mocked and condemned economics as a soulless dogma for technocrats.2 Moreover, similar to the leftists who think economics is a conspiracy to justify the greed of fat-cat businessmen, the protectionist conservatives insist the libertarian preference for freedom is a conspiracy against the the nation, and a strike against "patriotism."

In May of this year, for instance, John Burtka spelled it out at The American Conservative:

The libertarian strategy is clear. The goal of all its policies is the creation of an unfettered global market. The means for achieving this end is the free movement of labor and capital driven primarily by the interests of multinational corporations. The result of this strategy will be the weakening and eventual collapse of the nation-state and the demise of local and traditional institutions... The faster libertarians and the elites can eviscerate any semblance of particular attachments to place, family, or creed, the faster they can achieve their goal of a world without limits—that is to say, a world without human beings or a creator.

That is, if you're the owner of a 20-employee firm in the business of making steel security doors — and you're against a new tax on steel that will destroy your profits — well, you're just a tool of the corporations that want to destroy America. On the other hand, if you love America, Mr. Entrepreneur, you'll be willing to lose your business and sacrifice the livelihoods of yourself and your employees for the good of the nation.

And Burtka is hardly alone in insisting that low taxes are a slippery slope to the "collapse of the nation-state and the demise of local and traditional institutions."

Tucker Carlson, for instance, insists that freedom can only be allowed so long as it fits into the plans hatched by politicians who will presumably look out for the greater good of the nation — so long as they aren't infected with unpatriotic notions of laissez-faire. Using the term "economics" as code for market freedom, Carlson concludes: "One of the biggest lies our leaders tell is that you can separate economics from everything else that matters."

His essential message is this: so long as entrepreneurs, business owners, and consumers behave in a way that fits my notions of love-of-country, then I will tolerate their freedom. But once they start buying too many foreign goods, or investing in foreign economies, then that freedom must be revoked.

Freedom Is Unpatriotic: A Brief History

Unfortunately, this position is nothing new among conservatives, and conservatives have long held that patriotism demands consumers not be allowed to buy what they want, or merchants to sell what their customers desire.

Indeed, these claims became explicit in the fight between aristocratic protectionists and middle-class free traders in nineteenth century England.

[RELATED: "The Nationalist Case for Free Trade, in the Words of Classical Economists" by Joseph Salerno]

In 1832, the British House of Commons approved the Reform Act of that year, which extended the vote to the urban middle classes in the nation's cities. Thanks to industrialization and global trade, Britain was quickly becoming a wealthier nation of shopkeepers and merchants, who supported freedom for markets and trade.Conservatives, however, feared this liberalization of the country.

At the time, social critic Samuel Taylor Coleridge, by then in his conservative phase, pulled few punches in his denunciation of his liberal enemies:

You have destroyed the freedom of Parliament; you have done your best to shut the door of the House of Commons to the property, the birth, the rank, the wisdom of the people, and have flung it open to their passions and their follies. You have disfranchised the gentry , and the real patriotism of the nation, you have agitated and exasperated the mob, and through the balance of political power into the hands of that class [i.e., the shop-keepers] which, in all countries and in all ages, has been, is now, and ever will be, the least patriotic, and the least conservative of any.

Similar to those who today claim national greatness requires that manufacturing be protected from foreign competitors, many in Britain in the nineteenth century held similar views about agriculture. Not only was preserving agricultural economically important, the theory went, but agriculture also provided the foundation of society overall.

Thus, in Coleridge's mind, as in the minds of many ruling-class Tories, protectionist mercantilism in favor of the aristocracy's agricultural interests was the "patriotic" policy. Whether any of this comported with market freedom — and thus with improving the standard of living of ordinary people — was of little importance.

Before his conversion to the anti-protectionist position, Sir Robert Peel expressed similar views, insisting in 1839 that a regard for the community and the nation required protectionism. Moreover, Peel portrayed the pro-trade position as bloodless and theoretical — lacking the moral concerns of the protectionists:

the harsh, cold blooded economist, regarding money as the only element of national happiness, feasting his eyes upon Poland in the background, [wanting to] drive us from the cultivation of inferior soils . . . We should tell them that there were higher considerations involved than those of mercantile profit.3

And as late as 1843, Peel insisted that while the free-traders may be swayed by economic theories, only the protectionists cared about the real-world good of the nation:

I know, according to your strict rigid principles of political economy abstractly— if we were to forget the conditions and circumstances of the country and the interests which have grown up under the long endurance of protection — if we were to speak mathematically of these principles, no doubt they may be true. ... You may rejoice and indulge in these theories of modern philosophy and political economy; but when you have endangered and destroyed the peace and happiness of a nation, you will have but a sorry return for your pains.4

Peel would eventually change his mind on this issue, but his criticisms of the free-traders helped set the tone for what in following decades would become a standard smear used by conservative anti-market activists against laissez-faire liberals: namely, that liberals care only for profit and abstract theories. But the patriots cared about the nation as a whole

Prussian Conservatives

Nor are these sorts of attacks specific only to British conservatives. Otto von Bismarck and his fellow Prussian aristocrats were even more vehement that individual freedoms be curtailed, abolished, and limited in order to protect the allegedly patriotic vision of a strong national state.

Prussians would later turn conservative Edmund Burke's relatively moderate critique of markets into a full-scale attack on liberalism. According to historian Jonathan Steinberg, "Burke's best pupils and most avid readers were reactionary Prussian landlords and enemies of 'progress' in every country." Their insistence that markets must be made to serve the needs of the nation fit well with what Steinberg calls the conservative aristocrats' "hatred of free markets, free citizens, free peasants, free movement of capital and labour, free thought, Jews, stock markets, banks, cities, and a free press."5

For his part, Bismarck strenuously opposed the free-market policies of the British liberals, whom he described as a "clique of Manchester politicians and representative of the pitiless money-bags" who

have always been unfair to [the] poor, they have always worked to the limit of their abilities, to prevent the state from helping them. Laissez-faire, the greatest possible self-government, no restraints, opportunity for the small business to be absorbed by Big Capital, for exploitation of the ignorant and inexperienced by the clever and crafty. The State is supposed to act only as police, especially for the exploiters.6

Bismark, of course, is often credited as the creator of the modern welfare state, and a pioneer of what eventually became the now-common government healthcare systems across Europe.

The real purpose of it all, as Antony Mueller reminds us, was greater state power justified with ideals of national unity:

Social policy was foremost national policy and the social security system was primarily an instrument to lure the workers away from private and communitarian systems into the arms of the State. In the eyes of Bismarck it was the State that had created national unity and this agent was also needed in order to maintain the social unity by a system of mutual obligation between the State and its citizens.

Bismark's feigned concern for the poor was far more a matter of political expediency than humanitarianism. It is perhaps comparable to American conservative Steve Bannon's effort to forge a lasting political coalition by buying votes through what David Stockman called a "conservative/populist/statist alternative to the Welfare State/Warfare State/Bailout State status quo." 

Not surprisingly, we hear almost nothing at all from conservatives on matters such as cutting back federal spending or reducing the size and scope of the welfare state. Many actively mock the idea of cutting taxes.7

This image of the state fits well with the vision of Burtka. He calls for a "industrial strategy" that requires DC bureaucrats manipulate the economy in the service of vaguely defined "vital national interests" to be determined for 320 million Americans across a continent by a few policymakers in Washington.

Prosperous Communities Thanks to Laissez-Faire

The alternative to all this government planning, scheming, and taxing — an alternative greeted with horror by conservatives from Coleridge to Bismarck to Carlson — is freedom for the people who pay the bills, produce the goods and services, and sustain the culture. But conservatives increasingly assure us this can all be better managed by government than by private families, individuals, and enterprises.

In reality, however, it was laissez-faire that forged the United States into a prosperous and civic-minded nation in the nineteenth and early-twentieth century.

While conservatives would have us believe a strong national state is necessary to "draw...together" the people of the United States, the reality is the US was characterized by highly decentralized political systems, a weak central state, and an exceptionally high degree of economic freedom. It was never true that nationalistic anti-market policies of the sort now favored by conservatives were what made the US of the past into a relatively wealthy and cohesive society.

Indeed, the opposite is true. As the power of the state grew ever larger during the second half of the twentieth century, communities became weaker. Old social networks broke down. Religious organizations went into decline. Families fell apart. Thanks to policies similar to those of Bismarck's conservative welfare state, national policy forged "a system of mutual obligation between the State and its citizens." The taxes, regulations, and protectionist schemes — that Tucker Carlson tells us are so essential — were also the cornerstone of national policy over the past fifty years.

As was the case with the policies of the conservatives of old, those who forged America's modern mega-state did it all in the name of moving beyond economics. They strove to pursue, as Peel put it, "higher considerations ... than those of mercantile profit." They were not limited by "strict rigid principles of political economy" pushed by "cold blooded" pro-market economists.

What we got was today's status quo. A system of modern mercantilism, protectionism, subsidy, and "quantitative easing." It's a system that puts countless obstacles in front of ordinary people who would benefit greatly from being left alone to buy what is needed for their families, to sell the fruits of their labor, and to run their businesses in peace. But they'll never be allowed to live in peace because "patriotism" and "the nation" requires it.

  • 1. Both John Burtka (https://threader.app/thread/1177242491336175616) and Daniel McCarthy (https://www.firstthings.com/article/2019/03/a-new-conservative-agenda) have invoked the economic policies of Abraham Lincoln as guides for modern policy. Lincoln, a disciple of Henry Clay in his "American System" supported American expansion through schemes of greater taxation and subsidy.
  • 2. For example, Patrick Buchanan in his books has promoted the caricature of pro-market economics using the "homo economicus" straw man while claiming economics is built on the idea human beings are purely "economic animals."
  • 3. Irwin, Douglas A., "Political Economy and Peel's Repeal of the Corn Laws," Economics and Politics, Vol. I, No. I, Spring 1989. p.45.
  • 4. Ibid. p. 50.
  • 5. Steinberg, Jonathan. Bismarck: A Life. (Oxford Press, Oxford, 2011.) p. 21.
  • 6. Raico, Ralph. "Eugen Richter and Late German Manchester Liberalism: A Reevaluation, "The Review of Austrian Economics, Vol. 4, 1990, pp. 3-25.
  • 7. Tucker Carlson wants higher taxes on capital and corporations, for instance. Patrick Buchanan insists "when the income tax rate for the wealthiest was above 90 percent in the 1950s," the United States "by every moral and social indicator, was a better country." 
Ryan McMaken
Ryan W. McMaken is the editor of Mises Daily and The Austrian. He has degrees in economics and political science from the University of Colorado, and was the economist for the Colorado Division of Housing from 2009 to 2014.

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