That Chinese worker is not compelled to work in factories. Like their European and American counterparts in the 19th century, they choose factory work over field work because it is more productive.

Economics is the study of trade-offs. I am for affording people the liberty of choosing to “trade up,” so to speak, while it seems to me that you would rather consign them subsist in a pre-industrial society. The “capital rich elite,” a phrase that is suspiciously resentful of success, broker deals that benefit the Chinese worker, the Chinese capitalist, and the American consumer. You can obstinately insist this is exploitation in spite of all the facts, or you can at least admit that there is nothing logically or morally inconsistent with my arguments, and honestly state you’re more interested in preserving American manufacturing centers at the cost of more expensive goods.

(Aside for a moment: the primary reason why America is losing its manufacturing base is because we’ve created a financial industry boom, employing millions upon millions in otherwise unnecessary market speculation and its dependent operational structure. When a nation’s best and brightest are not entering physics, engineering, medicine, etc, but programming market algorithms – algorithms destined for failure as we’ve clearly observed – little wonder that we export manufacturing needs. I would probably place the majority of blame for this on our illustrious central bank, the Federal Reserve.)

Liberty involves, first and foremost, self-restraint. There is nothing compassionate about a federal behemoth setting so-called standards for trade in purported name of decency and morality. If laws like this must be made, they should be made on the state and local levels. Besides, these laws have no place commercial affairs. For example, abolish the Federal minimum wage and watch unemployment drop, to start.

Mises’ argument is simply true. You cannot get out of the moral predicament of government afforded privilege. The protectionist state slowly resembles, more and more, the medieval guild system – the very system that the history of the English people speaks to deconstructing.

Finally, I am not a fan of the Red Chinese government. I would consider them a strategic threat that we must plan for. But in the interests of avoiding a military confrontation, I would suggest encouraging liberalization through free trade arrangements, and treaties that systematically deconstruct the commie government’s power hold.

I’m sure that should America go into permanent decline because of de-industrialization historians will see the turning point as being when the so called “Libertarians” belief that the market is always right prevailed over the Founding Fathers somewhat hazy notion that “Liberty” requires that we impose tolerable limits upon ourselves.

This is best exemplified by the fact that global terms of trade often turned out to be the most “illiberal” terms of trade but this was not judged important enough to stand in the way of a goodly profit and helping the poor!

http://mises.org/story/3630

“Tariffs, and similar measures designed to strengthen the nation, “should not be considered as measures of production policy.” They aid some citizens at the expense of others; they do not help the economy as a whole.

‘One might differ as to the advisability of protecting the Prussian Junkers by a tariff on grain imports against the competition of the Canadian farmers who are producing on more fertile soil. But if we advocate a tariff to protect Prussian grain producers, we are not recommending a measure in favor of the production of the supply of grain, but a measure designed to assist the owners of German land at the expense of the German grain consumers. It will never be possible to base an economic system on such assistance privileges.’ (p. 20)

Mises here completely explodes the nationalist argument for protective tariffs. Since these measures do not benefit the totality of the nation, they cannot be unambiguously endorsed from a nationalist point of view. Commitment to free trade, then, need not rest on utopian commitment to internationalism, as some suppose. Given the goal of nationalism, protection does not follow.”

I can’t reply to all of this in depth for a number of reasons, lack of scholarship and dislike of platitudes chiefly among them, but a few points.

A) If you want to be a classical liberal, you eventually will be one. Enough study and reflection will almost certainly lead you to the determination that the trade-offs make Liberalism the least bad option.

B) That man is imperfect (fallen from grace) is a given. (“Do not let THEM immanentize the ESCHATON!”) Face it: there will be no perfect society on earth. Everybody who has tried to induce perfection through government or quasi-government institutions ends up in a position similar to Plato dreaming up his ideal Republic. That is to say, they must endorse, if not enforce, an economically stagnant/static, non-progressive life for those who inevitably end up as their, not citizens, but subjects. And since extreme egoism tolerates no peers, concentration of power lands in the lap of one man, a tyrant. Socialism is a static economy, unable to adjust to the changing needs and preferences of the people.

I don’t have the time to say more than that at the moment, except that I am very boorish when drunk and this forum is nearly guaranteed to be more civil.

Understanding the market mechanism as an organic whole makes reading these things somewhat trivial. The notion that you can get rich and prosper by exporting more than you import is as ridiculous as it sounds. If you don’t believe me, try it in your personal life. As another experiment, allow me to make your choices for you for a week, and see how well it goes (as a bonus, I’ll even try to make “good” ones!). These are basic thought experiments that help illustrate why socialism and protectionism are bad in all cases, irrespective of what your global neighbor is doing.

I don’t have the time to pour through academic papers that repeat long discredited fallacies. If this sounds conceited, I apologize. It’s just frustrating to think that such purportedly intelligent people spend their days propagating insidious, pseudo-credulous myths that affect my very own life.

Suffice to say that regardless of what you or I think about market economics, they are founded upon universally true laws, irrespective of time and place. Supply and demand can never be repealed. Marginal utility can never be reversed. The law of unintended consequences will always hold true for government intervention (the ultimate in “externality” creation). Market laws are amoral; they are discovered through logical deduction. Man must be moral, not the system he lives in.

My goal here is not to preach the Gospel of the market, but to inform the students of political history and political practice that certain things are unalterable and must be taken into account when deciding policy. Only a fool of a mechanical engineer would try to improve a car’s safety by first arguing away inertia. Yet our government, despite centuries of tutorial by economists, spits in the face of irrefutable fact, ignores the warnings, and promises an undeliverable utopia. This isn’t so surprising – we are, after all, dealing with politicians. It is more surprising that gullible citizens continually believe the demagogues, although given the complexity of the arguments and paucity of instruction in public schools, hardly so.

As a brief aside, Milton Friedman, the founder of Monetarism, was hostile towards the gold standard. He thought a limited money supply limited prosperity, and also supported floating exchange rates. Under a global gold standard, there would not be floating exchange rates. There would only be currencies denominated in different weights of gold. (However, I do believe even Friedman came to abandon Monetarism, but don’t quote me on that.)

Wall St. and greed did not cause this depression, but likely only exacerbated it. It was our nation’s central bank, the Federal Reserve, that created this housing bubble. A sound money (eg gold) cannot be manipulated by paper contracts on such a grand scale. See Austrian Business Cycle Theory.

Lastly, if you wish to preserve Americas industrial manufacturing base, then a tariff on manufactured imports may serve your purpose. It will also, unfortunately, make everybody poorer.

“The price of the dollar in terms of yen would fall until, on the average, the dollar value of goods that the Japanese buy from the United States roughly equaled the dollar value of goods that the United States buys from Japan. At that price everybody who wanted to buy yen for dollars would find somebody who was willing to sell him yen for dollars.”

I admit this extract reads a lot out of context but the point I’m trying to make is that even these great Libertarians and believers in the idea that the market can do no wrong anticipated a theoretical world of freely floating exchange rates. The reality though has been that all the Asian economies have attempted to artificially manipulate their exchange rates to drive export led growth. It’s almost as though they had all been reading the writings of the 19th century German economist, Friedrich List, who had witnessed the amazing growth rates of the protectionist countries Britain and the United States and reasoned protectionism was a good idea for emerging economies. Of course, the Japanese and Chinese Communist political establishment did read his writings and decided that was sauce for the goose was sauce for the gander. The 1997 flight of foreign capital from Asian countries was yet a further reinforcement of this reasoning.

It was I believe David Ricardo the British economist who popularized the idea of comparative advantage at a time when there was little recognition that international financial and technological mobility and improved transportation and communications would tend to render the geographical location for manufacture and services provision immaterial. However, Ricardo also believed that wages should be left to free competition so, for example, in his time restricting agricultural imports from other countries was not good sense, hence his support of repeal of the Corn Laws in Britain. However, this belief of Ricardo’s has never been firmly coupled with his comparative advantage theory in common parlance. I think if I ask you what is the value in dollars of China’s comparative advantage products outside of wage/materials rate advantages and Chinese food you would be hard pressed to come up with any great value.

I think the dangers of currency interventionism are best illustrated in the following article by Thomas Palley:-

http://www.levy.org/pubs/ppb_85.pdf

In this article written in 2006 he predicts this current economic recession as a consequence of currency interventionism although I doubt he could have quite foreseen its amplification by the greed, stupidity and fraud surrounding sub-prime mortgages and their dice-and-slice spin-off financial investments. Within this article you will find what for me is a key statement concerning the madness of current global trade arrangements under the mantra of “the market is always right”. Palley states:-

“In particular, the system promotes global deflation by emphasizing exports excessively; this focus
hollows out the income and aggregate demand–generation process in the United States via de-industrialization and outsourcing.”

His article is concerned to offer solutions to mercantilism masking as free trade including managed exchange rates and the imposition of taxation on US bonds and other financial instruments bought by foreign governments and private investors. This is not dissimilar to the ideas of the American Richman family in their book “Trading Away Our Future.” Here is their website which further explains their thinking :-

http://tradeandtaxes.blogspot.com/2009/01/balanced-trade-will-create-jobs-raymond.html

In addition it is of interest to explore the ideas of Dennis Murphy who argues that countries with fairly high population densities need to focus on exports because there is not the space for people to consume a large volume of goods produced for the home market. Japan I guess would be a good example where homes are small and space for storing second and third cars, power boats and recreational vehicles, jacuzzis, for example, is at a premium. His web site provides some interesting statistics to support his argument:-

http://petemurphy.wordpress.com/the-case-for-tariffs/

Interestingly, though it is not with China that the United States incurs the largest trade deficit value. Eire (Southern Ireland) has a higher one despite its population density being relatively low and this illustrates another aspect of mercantilism. Eire’s corporate tax rate is half that of the United States and many American pharmaceutical companies manufacture there to get this saving and avoid having to pay the very high sales tax, or value added tax, that the European Union market imposes on foreign imports. So clearly a belief that free trade is played freely, or fairly, is naïve.

This brings me to my last two points. How can a country like the United States which for so many years believed it was important to be anti-communist, lost so many lives fighting communists in Asia, and spent a fortune in an arms race to defeat communist governments with programs like Star Wars suddenly decide that communist run countries were OK and worth investing in? Could it be that once government declared there was no longer a significant military threat, greedy elites realized there were vast fortunes to be made? Here is Jack Welch, the former CEO of General Electric, giving the game away in a 1998 interview with Lou Dobbs.:-

http://message.snopes.com/showthread.php?t=44956

Welch’s view has given birth to the concept of Barge Economics whereby the most important thing now for a capitalist manufacturer, or services provider, is to get the lowest possible costs irrespective of the ethics, morality or plain human decency involved. The old adage still stands; buy low, sell high. The argument is that business is like the replication of genes; it is the survival of the most adaptive. The implication of this is that increasingly it does not make sense to manufacture anything, or provide an increasing number of services, from the United States anymore until the Chinese Communist Party or some Fascist regime takes over the country and imposes their draconian system of wage controls, pollution control avoidance and currency rigging systems and subsidies. Over the years I’ve read a lot about the way Communist and Fascist systems operate. They are abominable. Erik Beinhocker in the book I’m currently reading “The Origin of Wealth.” calls them “Big Man” systems. He says to be politically correct it should really be “Big Person” but I think the former title is right, you are statistically more likely to find sociopaths amongst men than women for obvious reasons. Communism and Fascism’s weakness for me as political systems is that it allows sociopaths to gain positions of power because its supporters do not understand that liberty requires control. Liberty requires that we impose tolerable limits upon our actions through government and its power to pass laws. We have to do this because human beings are Conditional Co-operators. We are a mixture of selfishness and altruism. I think in the United States there are many individuals who confuse the idea of liberty with the notion that the market is always right. We have the Sub-prime Disaster to illustrate that this idea is wrong. This disaster was the outcome of allowing too many zero-sum games to be played and Barge Economics and global trade manipulation tricks are further indications of this essentially selfish, or sociopathic, mentality. Our task in this country is to re-learn the true meaning and mechanisms of liberty and rebuild trust amongst ourselves by figuring out the best non-zero-sum games we should be playing.

I must apologize, for I’m preparing for a long drive to the East Coast and need to get to sleep, so I’m not going to reply to this in depth, though I may try to if I find enough time while in the DC area. (Thus, I must apologize for a dearth of postings to keep you on your toes/aggravated and for a failure, again, to reply in depth).) I do want to cover a few quick things, though.

1. re: “dispossessed” versus “unpossessed”: It’s a real word, but not I’m not sure if it’s a legitimate word, which is to say that I’m not sure, were it not so suitable to my purposes, that I’d be willing to employ it. (Of course, other, better, more concretely legit words exists, but I’ve formed a habit of using it.)

2. re: “invidious”. You’re right here. I’m not sure why I went with that word, not having made the direct connection between the word and “envy”; thanks for the lesson; I was shooting for the common (as common as it is in everyday language, anyway) use regarding inciting resentment or anger, but failed to adhere to the stricter, more accurate use of the word. Thank you for the correction.

3. re: Constitution. ” It isn’t the framers’ faults that our modern elected officials disregard their original intent” I certainly agree with that. I’m still of the camp that wishes that they’d revamped the Articles, as they were commissioned to do, rather than having scrapped it for something new. Surely, even if you ultimately disagree, you, having expressed sympathy for my agrarian/localist vision (but noted the impossibility of it), you can appreciate the sentiment.

4. re: environment. I’m not convinced that anthropogenic global warming exists. I’m not convinced that it doesn’t, either. I tend to prefer to err on the side of caution; more important, my “environmentalism” is much broader than that: It’s become somewhat cliché, but I’m a “conservationist”, rather than an acid-dropping environmentalist. I find common ground in some shared belief with environmentalists, but I’m quite wary of them, generally agreeing, perhaps not as passionately, with your assessment that environmentalism is a vehicle for socialism.

5. re: economic liberalism. Don’t you get it? I want to be one, in the sense of Röpke “liberal conservatism”. I do believe that free trade is the way to go, rather than protectionist measure, but, again, I still long, perhaps deludedly, for the cultural and social (rather than governmental/political) institutions and framework that Röpke praises. It may be an enduring testament to Man’s fallen state that rebuilding these structures without government involvement is impossible, but I have hope. It doesn’t mean that I don’t make compromises from time to time, whether in the ballot box or with my wallet, but I do my best to support local businesses, local institutions, and so forth, and, when possible, to vote in ways conducive to what I want.

I’m all for friendly terms. As I noted a while ago, I suspect that most of our heated debates would be better over pints. Besides, if my undergrad years taught me nothing else about social interactions, it’s the liberals who have a propensity for letting academic/political/intellectual conversations get in the way of friendship. I can’t guarantee an apology to Mr. Levin, though. We’ll see.

I wonder if, at the core, on many (though certainly not all) issues, we’re probably more in agreement than our conversations would reveal. I’m just more inclined toward one end of the conservative spectrum than you, and am more of an agrarian idealist. Doubtless, my being a country boy from a town of about 2,000 and your coming from where you do (It’s public enough information, but I’ll leave it unmentioned here for your privacy) probably have a fair amount of influence
P.s.: Same here.

Cheers.