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Free Trade Shouldn’t Be a Litmus Test for Conservatism

According to a recent analysis in the New York Times, President Trump’s “isolationist” trade policy is “at odds with longstanding conservative orthodoxy about the benefits of free and open markets.” The reader is further told that the president is under pressure from his working-class base, which is obstreperously demanding that protectionist taxes be placed on imported steel and aluminum.

I say not so fast.

The Times presents the GOP base’s supposed impatience with free trade [1] as a departure from almost sacred Republican beliefs, and free trade itself as a permanent conservative characteristic. Their evidence is that large corporations favor free trade while labor unions have generally been more protectionist.

But both assertions represent gross oversimplifications. Those who present free trade as a “conservative” position are skimming over whole chapters of the past. They conveniently overlook [2] (or are totally ignorant of) the fact that well into the 20th century, American statesmen who could hardly be characterized as leftists—like Alexander Hamilton, Henry Clay, and William Howard Taft—were outspoken advocates of tariffs. So were Abraham Lincoln and his Republican supporters, who in 1860 intended to raise the existing tariffs of 1857 to a record high (and to the detriment of the agricultural South). Two of the most fateful increases in taxes on foreign imports, the Morrill Tariff [3] of 1861 and the Smoot-Hawley Tariff of 1930 [4], were the work of Republican congressmen. In 1930, a not-exactly-leftist president Herbert Hoover happily signed Smoot-Hawley, which may or may not have worsened the Great Depression that had developed the year before. President Eisenhower was also a known supporter of tariffs [5], which earned him criticism from free traders.

Moreover, a recent darling of the establishment, Republican President George W. Bush, imposed steep duties [6] on imported steel in 2002. This steel tariff ranged from between 8 and 20 percent, depending on who was exporting and what was being exported to the U.S. Bush Jr. was compelled to act by the declaration of bankruptcy by 30 steel companies in the preceding decade; he kept the imposts he introduced in force until the end of the next year. Canada and Mexico were excluded from these tariffs because of the North American Free Trade Agreement (NAFTA). Still, it is hard to see how Trump’s attempt to extend tariffs to NAFTA signatories represents a radical deviation from the high steel tariffs of his Republican predecessor. By the way, there are permanent tariffs that exist for shoes and clothes, which neither national party is likely to touch.

Dramatically lowering tariffs was a campaign promise on the Democratic ticket of Grover Cleveland and Allen G. Thurman in 1888. (public domain)

In Europe, such non-leftists as Louis XIV, Frederick the Great, and Otto von Bismarck favored tariffs to protect the agricultural and commercial products of their countrymen. Up until the second half of the 18th century when Adam Smith and other critics of mercantilism began writing, it was generally assumed that all concerned European leaders would protect their commerce and infant industries by limiting imports and trying to increase exports. England practiced free trade in the 19th century principally because it was the most advanced industrial nation with the largest supply of credit. When these conditions changed before the First World War, the English government reverted to protectionism. This change in England’s fortunes and views about trade provided the theme of a famous book [5]The Strange Death of Liberal England, by George Dangerfield, which was published in 1935. Not surprisingly, it was the Tories who were accused of giving the death blow to English free trade.

It is not often mentioned—but should be, for the sake of accuracy—that the major advocates of free trade in the 19th century were radicals [7] like John Bright, Richard Cobden, and James and John Stuart Mill. Such free traders believed in extending the suffrage to women, and in various mechanisms for breaking down national barriers. Although the goals of these radicals have become mainstream positions by now, in the 19th century they certainly were not. The English protectionists against whom the radicals fought, particularly over the Corn Laws that maintained tariffs on the import of foreign grain, were the landed Tories. Benjamin Disraeli rose to fame as a Tory leader by taking the losing side of what was then the English right.

Although I myself lean towards free trade (all things being equal), there is no historical reason to assume that this position defines traditional Republicanism or a conservatism. Such an assumption is a perfect example of what may be called “litmus test conservatism.” A particular position becomes “conservative” because the donor base of what calls itself the conservative movement want its beneficiaries to advocate for it. We are fully justified in questioning free trade as such a litmus test. That position has often been linked with the left, while protectionism has just as often been associated with both Republicans and the European right.

change_me

Paul Gottfried is Raffensperger Professor of Humanities Emeritus at Elizabethtown College, where he taught for 25 years. He is a Guggenheim recipient and a Yale PhD. He writes for many websites and scholarly journals and is the author of 13 books, most recently Fascism: Career of a Concept and Revisions and Dissents [8]. His books have been translated into multiple languages and seem to enjoy special success in Eastern Europe.

21 Comments (Open | Close)

21 Comments To "Free Trade Shouldn’t Be a Litmus Test for Conservatism"

#1 Comment By Arthur Sido On March 7, 2018 @ 8:49 am

When people from Paul Krugman to the globalist shills in the big business media are uniformly against tariffs, it might be a good time to give them a serious look.

#2 Comment By collin On March 7, 2018 @ 10:55 am

Although I myself lean towards free trade (all things being equal), there is no historical reason to assume that this position defines traditional Republicanism or a conservatism.

I see that Trump is supporting all American families to write a $5 check to steel company executives and investors. Steel is so capital intensive, I would be surprised that this tariff creates more than 10K national steel jobs and will likely cost 30K jobs in other manufacturing or construction businesses.

#3 Comment By One Guy On March 7, 2018 @ 12:55 pm

I don’t care about William Howard Taft’s position on tariffs. The Stock Market (where I have my 401k) doesn’t like tariffs. That’s what I care about.

#4 Comment By Ken Zaretzke On March 7, 2018 @ 2:05 pm

“I say not so fast.”

Professor Gottfried, you’re causing consternation at the Heritage Foundation.

What Margaret Houlihan said to Charles Emerson Winchester III is what Trump is saying to Gary Cohn, Paul Ryan et. al.:

“You know what this is? [rubbing thumb and index finger together] It’s the world’s smallest violin, and I’m playing it just for you.”

#5 Comment By Jimbo On March 7, 2018 @ 2:13 pm

The movement towards free trade has been both political and economic – it proved that by eliminating barriers to economic cooperation we could also have greater diplomatic cooperation and better standards of living. Tariffs don’t make sense in the 20th century or beyond since we’ve jettisoned the gold standard (trade deficits would cause deflation and inflation as gold moved across borders with predictable results). The devastation inflicted on manufacturing was caused by an explosion of technological sophistication – refrigeration, transportation, telecommunication, power generation, computation, and a few others I’m certainly missing. There are certainly ways to improve manufacturing in the US – you could improve the approval process for permits and factories, as well as invest in infrastructure to try and generate cheaper power.

Tariffs are a clumsy tool of a distant past that we’ve largely discarded for good reason. We don’t drain blood from the sick anymore to correct an imbalance of humors; we shouldn’t bring it back just because some dude thought it was a good idea 100 years ago.

For political and economic decisions of the modern era, the 19th century just isn’t important or relevant to our experiences. It was too different.

#6 Comment By Ksw On March 7, 2018 @ 3:41 pm

Protectionism Is just another way to pick winners and losers, something republicans have constantly accused democrats of doing. Republican hypocrisy is shameless.

#7 Comment By Rick Johnson On March 7, 2018 @ 4:05 pm

1) Country A has 0% tariffs and impediments to foreign trade, but 100% tax on income.
2) Country B 100% proscription of foreign trade, but 0% tax on income.

Which country would have better economy?
Contrary to Smith and Ricardo, it is not the division of labor nor trade that provides economic endeavor. IT IS HUMAN VOLITION!

#8 Comment By Kent On March 7, 2018 @ 5:28 pm

I think Jimbo’s comments above hit the nail on the head. What’s really happening here though is that people are pining for the economy of the ’50’s & ’60’s. The US was heavily industrialized. But it wasn’t the industrialization that caused a good economy, it was labor unions.

You can bring back all the factories you want. But if you are going to pay those factory workers $8/hour, your are NOT going to #MAGA!

#9 Comment By TG On March 7, 2018 @ 5:45 pm

An intelligent and well-reasoned piece. Kudos.

But I would point out that our current elites don’t really believe in ‘free trade’ any more than they believe in market discipline (Wall Street bailouts anyone?).

For example: under ‘free trade’ large corporations can ship jobs to low wage countries to take advantage of labor arbitrage. However, private citizens cannot take advantage of arbitrage in goods such as pharmaceuticals because that would interfere with the ‘freedom’ of big corporations to maximize profits by restricting trade!!!

Even more extreme: currently there are reports that a large fraction of the peeled shrimp in the US is processed by actual slave labor in Malaysia – but we can’t ban this practice, because it would interfere with the ‘freedom’ to choose to employ slaves!!

“Freedom.” It’s whatever the rich say it is. Because freedom isn’t free, and the rich have spent a lot of money making it into whatever they want it to be.

#10 Comment By John Hanft On March 7, 2018 @ 5:58 pm

How would it be that intellectual musings were “cheaper” because they are being dumped by blots (after all such musings are rarely if ever unique). American “journalists” couldn’t get their musings published nor get paid. The American wordsmith industry would fall on hard times. The puppet consumer industry would pay less for the same lame content.

#11 Comment By Emil Bogdan On March 7, 2018 @ 7:38 pm

Rick Johnson, exactly. “Free trade” ends up being a philosophy of universal values, and its mistaken application assumes perfect reciprocity, assumes no other values that humans also live by. Free trade is the answer. Hey, I’m a free trader, so are you, right? Here, buy my stuff. Come sell your stuff. Duty free! All is well in paradise.

#12 Comment By prdoucette On March 7, 2018 @ 7:39 pm

It seems to be rather dubious logic to argue that Republicans should rightfully claim the title of the party of tariffs, given that many of these tariffs hurt Americans more than they helped, and really has nothing to do with whether the tariffs Trump has or wants to impose actually make any sense particularly when they are not focused at the one country which the US actually has a major trade deficit and who the US and much of the rest of the world needs to confront.

#13 Comment By Zgler On March 7, 2018 @ 9:06 pm

“Steel is so capital intensive, I would be surprised that this tariff creates more than 10K national steel jobs and will likely cost 30K jobs in other manufacturing or construction businesses.”

^^This. Subsidies/tariffs on capital intensive industries is lip service to Trump’s base, not anything that’s effective for job creation. He’s doing it because some lobbyist or crony caught his ear.

#14 Comment By Thaomas On March 8, 2018 @ 10:13 am

While it is good not to make a fetish out of amy part of libertarian economic policy including “free trade” the objective should be to examine policy in order to achieve legitimate objectives at least cost. In this case we need to clearly define and justify the objective. Why do we need exactly what kind of steel and aluminium industry for “national security?” Is a tariff (instead of a subsidy, say) the best way to achieve the objective? The Administration clearly has not made a serious attempt to answer these questions.

#15 Comment By VikingLS On March 8, 2018 @ 10:54 am

“Protectionism Is just another way to pick winners and losers, something republicans have constantly accused democrats of doing. Republican hypocrisy is shameless.”

Protectionism is also a way to promote production under conditions that meet American standards on workplace safety, workers rights, and environmental standards (and even if American environmental regulations are less strict under Trump, do you honestly believe we’re down to China’s level?) things Democrats claim to care about.

Trump could embrace the entire DNC platform and you all would still rail against him because he’s not your guy.

#16 Comment By VikingLS On March 8, 2018 @ 10:57 am

Oh, and as Republican, I am not sure that extends to the belief that a Republican president should not on an international level want to pick the United States as a winner.

We certainly don’t seem to want a level international playing field when it comes to defense.

#17 Comment By Ken Zaretzke On March 8, 2018 @ 6:04 pm

“This was the kind of mistake Reagan had never made. Although free trade was official Reagan ideology, his administration actually orchestrated an ad hoc industrial policy that appeased key political and economic constituencies. Many complaints came from older industries like textiles, steel, auto, and motorcycles, long bastions of GOP or Dixiecrat support. They were being inundated by East Asian and especially Japanese imports. Reagan’s Commerce Secretary Malcolm Baldrige and his deputy, Clyde Prestowitz, therefore challenged the free-trade orthodoxy still favored by the State Department, which was willing to sacrifice U.S. industries in order to sustain Cold War allies in Asia.”

Quotation is from “A Fabulous Failure: Clinton’s 1990s and the Origins of Our Times,” by Nelson Lichtenstein (current issue of The American Prospect).

#18 Comment By Brian Villanueva On March 9, 2018 @ 7:17 am

The book “Global Trade and Conflicting National Interest” is a wonderful primer on the economic case for protectionism. It’s written by serious academic economists, but is fairly accessible to the layman.

I happen to not be a fan of Trump’s steel tariff (not enough spin-offs remain from the Bessemer process — I’d rather build solar panels and robots), but I am even more skeptical of unrestricted trade proponents.

The economic case for unrestricted trade is actually quite weak. Most free-trade economists today base their arguments not on Ricardo’s economics, but on Adam Smith’s libertarian moral positions (so-called Smithian ethics.)

If you want to take down free traders on their own terms, read Baumol’s book.

#19 Comment By One Guy On March 9, 2018 @ 6:31 pm

“Trump could embrace the entire DNC platform and you all would still rail against him…”

It’s fun to argue fantasies and things that don’t exist. It eliminates the need for facts. One can just make things up to suit one, without fear of being proven wrong.

#20 Comment By Wizard On March 10, 2018 @ 12:57 pm

Thaomas – The “national security” rationale for Trump’s idiotic tariffs is nothing but a fig leaf to try and slip past existing trade agreements. Even leaders at the Department of Defense opposed them.

The only effect of these tariffs is to alienate our allies, make US manufacturers less competitive, and drive up prices for American consumers. So far, no one has offered me a convincing explanation of how that will “Make America Great”.

(Personally, I don’t want to live in a “great” country. I want to live in a country that’s free, peaceful and prosperous. Traditional measures of “greatness” can only be achieved by sacrificing some of all those attributes.)

#21 Comment By Kurt Gayle On March 12, 2018 @ 1:35 pm

On March 9th-11th the American Conservative’s “Of Note” featured TAC Editor-at-large Daniel McCarthy’s excellent March 8th New York Times article “The Case for Trump’s Tariffs and ‘America First’ Economics.”

On March 10th Daniel McCarthy discussed his NYT article on SiriusXM Radio – a 15-minute segment that is well worth listening to:

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