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The Latest Conservative Defense of Tariffs

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For many years now, some conservatives, in their magazine and web articles criticizing government-managed trade agreements such as NAFTA and CAFTA, have made veiled criticisms of free trade.

But no more. Since the beginning of the year, when Donald Trump started imposing protective tariffs on selected items from certain countries, those conservatives have begun to openly criticize free trade and promote protectionism.

Sure, they are still denigrating real free trade by associating it with trade agreements, GATT, the WTO, the UN, the EU, the desire of globalist elites to have a one-world government, the decline of American independence, and the surrendering of American sovereignty.

They are still promoting the idea that without the government’s protecting certain industries, the United States can become dangerously dependent on foreign suppliers for essential commodities in times of war. (In response to Trump’s recent tariffs on imported steel and aluminum, the DoD stated that the tariffs were not necessary to ensure national-defense requirements.)

They are still reciting the logical fallacy that — because the federal government was funded by tariffs from its inception and into the twentieth century, and America prospered and became an industrial power during that period — America did so because of tariffs, rather than in spite of them.

And they are still maintaining that although Americans have to pay somewhat higher prices for manufactured goods due to tariffs, it is foreigners who mainly pay tariffs for the privilege of selling their goods in the vast U.S. market. (The truth, of course, is that tariffs are taxes on importers that are paid to the customs authority of the country imposing the tariff. They are not a tax on the seller of the goods. And Americans may have to pay considerably higher prices for goods due to tariffs if the total increase in the cost of a good caused by the imposition of a tariff is passed on to the consumer.)

But now, thanks to Trump, it appears that those conservatives feel emboldened to directly attack free trade and advocate protectionism.

The latest conservative defense of tariffs is that the Founding Fathers were protectionists and not free traders in the tradition of Adam Smith, David Ricardo, J.B. Say, and Frédéric Bastiat. The father of the country, George Washington, so we are told, was a protectionist. The author of the Declaration of Independence, Thomas Jefferson, and the father of the Constitution, James Madison, although they had flirted with the idea of free trade, came to share Washington’s view. Other Founding Fathers, such as Alexander Hamilton, John Adams, and Benjamin Franklin, were protectionists. So why aren’t you a protectionist? Are you smarter than the Founding Fathers?

There are four major problems with the “Founding Fathers” argument to justify tariffs.

One, with respect to economics, the American colonies of the Founding Fathers were not exactly free markets, as recently described in the Cayman Financial Review:

Before the Revolutionary War, the American colonies also had pre-capitalistic, quasi-feudal economies similar to England before the Whig Revolution.

The Whig Revolution, which had allowed England to develop a modern capitalist economy, did not immediately cross the Atlantic.

In the 1770s, colonial legislatures still regulated the prices for many goods and services and forbade arbitrage and speculation. Colonial courts still accepted “just price” doctrine, allowing judges, all [of] whom were members of a small oligarchy, to overturn contracts when market prices moved against colonial elites. And when crops failed or prices fell, colonial legislatures frequently declared “debt holidays” to prevent creditors from seizing the property of the colonial oligarchs.

Most of the America’s founders were from the small, wealthy elite in the colonies. Identifying with the English gentry rather than the rising middle class, [Henry St. John 1st Viscount] Bolingbroke greatly influenced most of the founders’ views of economics and politics. Most founders, especially Thomas Jefferson and James Madison, agreed with Bolingbroke about the primacy of agriculture, shared his fears of banks and a paper currency, and dreaded industrialization. Most founders accepted Bolingbroke’s policy recommendations with the exception of a ruling monarch.

Do conservatives who advocate tariffs, as the Founding Fathers did, likewise want the current American economy to be patterned after the colonial economy? I don’t think so. Conservatives generally say they favor a market economy free from government interference.

Two, many of the Founding Fathers were slave owners. George Washington, Samuel Chase, Benjamin Franklin, John Hancock, Patrick Henry, John Jay, Thomas Jefferson, James Madison, and Benjamin Rush owned slaves at one time. Washington didn’t free his slaves until after his death. Would a conservative justify slavery today because many of the Founding Fathers were slave owners? Of course not. Would a conservative even listen to any proposal to reinstitute slavery because the Founding Fathers were slave owners? Of course not.

Three, the time of the Founding Fathers was much different from today. The United States had just fought a war with Great Britain to secure its independence. America was neither an economic powerhouse nor economically self-sufficient. There really were “infant industries” for the government to protect. (That, of course, doesn’t mean that it was the proper role of government to protect them.)

And four, the Founding Fathers had no income tax, Medicare tax, or Social Security tax to fund the government. Those three taxes fund the current federal government a thousand times higher than it should be. It is ludicrous to argue that we need tariffs because the Founding Fathers instituted tariffs to fund the federal government of their time. If conservatives are going to argue that a small revenue tariff on all imported goods would be better than having an income tax, Medicare tax, and Social Security tax, then I would agree with them. But that is not what they are saying.

The Founding Fathers did and said many good things, and had a lot of wisdom when it came to U.S. foreign policy, but that doesn’t mean that they were infallible.

Free trade has nothing to do with trade agreements, government organizations, globalism, a one-world government, or national sovereignty. It has everything to do with freedom — freedom to engage in commerce with anyone in the world without government interference.

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