The Political Autism of Anti-Protectionism
There is a certain species of policy analysis which exhibits many of the symptoms which are commonly found among high-functioning autistic people. Among these symptoms are an inability to understand context, a troubling need for routines, an obsession with particular topics, difficulty with abstract thinking, difficulty in understanding other perspectives, a lack of empathy, an inability to process social cues, repetitive use of set phrases, and an inability to identify or think about groups or shared interests. Analysis that suffers from some (or even all) of these shortcomings can be found all over the political spectrum, but it seems to come disproportionately from libertarian thinkers.
The rise of Donald Trump has brought a protectionist view of trade policy back to the forefront for the first time in decades. Naturally, this gives libertarians pause, as protectionism violates individual liberties, is economically inefficient, and gives more money and power to the state. In a textbook-style vacuum, free trade is both more libertarian and more beneficial than protectionism. But to stop there and fail to address the relevant current conditions would be politically autistic by way of context denial. Thus, it is necessary to examine how protectionist policies can make sense in certain contexts, as well as the problems with supporting a policy of free trade in all circumstances.
On January 26, White House Press Secretary Sean Spicer floated the idea of a 20 percent import tariff on goods coming from Mexico as a means of funding a border wall. This prompted outrage from the establishment media, along with claims and analysis showing that Americans would pay the tariff rather than Mexico because Mexican products would be more expensive for American consumers as a result. This would be true if all else were equal, but this is not the case.
The Context
Mexico already has import tariffs which can be as high as 140.4 percent and average 13.97 percent. For Mexico to tariff US goods while the US does not tariff Mexican goods puts American companies at a disadvantage. While the libertarian may note that smuggling to evade the tariff would be a morally acceptable response, this is not feasible on the level necessary to conduct a national economy. Revolution to abolish the governments that impose the tariffs would also be morally acceptable, but this is likewise unfeasible, at least for the immediate future. Eliminating government interference in the economy that makes it harder to do business domestically is another option which is better than protective tariffs, but doing so to the extent and with the quickness which would be necessary is unlikely. The next best option, then, is for the US government to respond with an equivalent counter-tariff to attempt to even out the discrepancies caused by another state’s tariffs, with an aim toward negotiating abolition of the tariff on both sides.1 Given that 81.2 percent of Mexican exports for a worth of $309.2 billion go to the United States and 15.7 percent of US exports for $236.4 billion go to Mexico, the threat of a trade war clearly gives leverage to the United States. Peter Navarro, who heads the White House National Trade Council, said as much to CNNMoney:
“The tariff is not an end game, it’s a strategy…to renegotiate trade deals. Tariffs wouldn’t put U.S. jobs at risk.”
It is important to remember that much like nuclear weapons, the primary purpose of tariffs is not to be directly utilized, but to alter the behavior of other states by serving as a deterrent. The threat of a trade war by way of tariffs and counter-tariffs helps to keep the economic peace, just as peace through mutually assured destruction does with nuclear weapons. A response to another nation’s tariff to gain leverage against it is the secondary purpose, as explained earlier. Those who fail to account for this are exhibiting political autism by engaging in context denial.
The Analysis
A 20 percent tariff would discourage Americans from buying Mexican products. This would also raise the cost of goods which are currently provided at the lowest cost by Mexicans. The increase would not necessarily be 20 percent; to illustrate this, let us consider a simple example. Suppose that avocados from Mexico currently cost $1 each, while equivalent avocados grown in California cost $1.10 each. The tariff makes it so that initially, the Mexican avocados increase to $1.20 while the California avocados remain at $1.10. Initially, the American consumer pays 10 percent more but switches to the California source as much as possible. This diversion of funds from Mexico to California allows the Californian producers to make investments to improve their techniques and expand their operations, which will lower the cost of their products over time, potentially even below the $1 level that consumers originally paid to Mexico.
Whether this is a superior outcome for the American consumer depends upon a variety of factors, such as the available farmland in each location, the weather patterns over the next several years, the intelligence of American agriculturalists versus Mexican agriculturalists, and so on. What is known is that as few Americans as possible will be paying the tariff to the US government, and as many as possible will instead pay only part of it to American producers. This will not create net jobs, but it will have influence over where jobs will be created, which will give some American consumers more money to spend. The inability to think abstractly to get beyond the basic free trade position is an example of political autism.
Rationalism, Not Empiricism
Many economists will attempt to argue for free trade on empirical grounds, but this is a flawed approach. Economics is not a science, but an a priori discipline akin to logic and mathematics. The logical truths of economics can be illustrated by using empirical examples, but the discipline itself is not data-driven.
Most empirical cases for free trade rely upon David Ricardo’s theory of comparative advantage. But comparative advantage makes several starting assumptions which are not always true, such as non-diminishing returns, the presence of multiple trade commodities, inelastic demand, domestically mobile labor, and internationally immobile labor. Although the available evidence suggests that free trade raises living standards, increases purchasing power, and accelerates economic development, these studies suffer from both the cum hoc ergo propter hoc fallacy and the absence of counterfactuals for each case. This is not cause for dismissal, but it is cause for suspicion. A proper case for free trade must rest on logic, not observation.
Although free trade usually provides more net benefit than protectionism in the long run, people do not live in the long run; they live their lives and feel economic pain here and now. Furthermore, a net benefit does not mean that each individual person benefits; only that the sum of all benefits and malefits is greater than zero. It may be the case that a minority sees great gains while a majority suffers somewhat smaller losses, and this would explain why a democratic system would produce protectionist policies. Political autism manifests here in the form of the lack of empathy for those who are harmed by free trade in the short-term, the difficulty of understanding their perspective, and the inability to think properly about individuals versus groups.
Trump And Adaptation
The desire for protective tariffs among Trump supporters fits into a larger picture. Following Trump’s election, many leftists have criticized Trump supporters as being unwilling or unable to adapt to a changing world, and Trumpism as a reaction to that changing world. But an organism faced with a changing environment has three options: fail, adapt itself to the environment, or adapt the environment to itself. Most species are almost exclusively capable of the former two options, but humans are uniquely capable of the latter option. In seeking to reverse unfavorable societal trends, Trump supporters are doing something uniquely human and perfectly understandable. A libertarian may question their methods, but their motives make sense. Those who oppose Trump but express a desire to understand the other side would do well to consider this point.
Conclusion
There are good reasons to oppose protectionism in the abstract, but to simply state these reasons and fail to appreciate the context in which protectionism is advocated is an example of political autism. In theory, there are better courses of action, but these options are not always feasible. The threat of tariffs as a means to deter other states from imposing tariffs is an important tool for deterring trade wars, and a nation that refuses to consider such a deterrent is at a disadvantage against other nations that have no such scruples. The empirical case for free trade, while intriguing, is not true for all people in all circumstances, and does nothing to help those who have lost their livelihoods to foreign competition. In a perfect world, no protectionism would be justifiable, but that is neither this world nor the world of the immediate future.
Footnotes:
- Note that the use of barriers to free trade as a negotiating tactic is nothing new in US-Mexico trade relations. When Mexico tried exporting avocados to the US in the 1990s, the US government resisted at first, but gave in when Mexico started erecting barriers to US corn exports. The end result of using counter-barriers against barriers to free trade in this case was freer trade.
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