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Thursday, June 21, 2012

Free Trade and Gary North

In which Gary North takes on "A Tax-Loving 'Austrian Economist'" at Lew Rockwell:
I had never heard of the individual who runs it. I looked him up. He has written a book on the coming depression. He has written another book on an unrelated topic. He has not written anything in book form on economic theory. He does not have an academic position anywhere. His academic background is limited to a bachelor's degree in economics. College courses in economics are Keynesian. A person needs follow-up work in economics to equip himself in the field.

There is an old rule: "You cannot change just one thing." There is a rule of economics: "If you claim to make a breakthrough in a narrow area of economics, this is going to force you to re-think almost everything else in economics." It is not good enough to tell everybody that you have refuted the fundamental doctrine of modern free-market economics: the doctrine of free trade. You also must show that you have restructured all of economic theory in terms of your revolutionary breakthrough: discovering why sales taxes on imported goods make society richer. The site's editor has not done this. I will go further than this: he has his work cut out for him.
It's apparent that Mr. North has decided to labor under the decided disadvantage of arguing from ignorance. That's a bold strategy, let's see if it pays off for him. I'll begin by pointing out that it is not entirely true to say I have not "not written anything in book form on economic theory" since The Return of the Great Depression not only contains a considerable amount of economic theory in it, but even suggests an minor improvement for the core mechanism of the Austrian Business Cycle to explain its greater versatility than its current mechanism would suggest. I certainly don't have an academic position anywhere, of course, neither does Mr. North. I do have a BS in economics, which may actually be more formal economic training than Mr. North has since his PhD is in history, not economics. But does it really befit someone who appeals to the authority of Ludwig von Mises to play the academic credential game in lieu of genuine critical discourse?

Furthermore, Mr. North is blatantly wrong. While it is true that it is not enough to simply assert that one has refuted something, is absolutely unnecessary to "show that you have restructured all of economic theory in terms of your revolutionary breakthrough" in order to demonstrate that one has, in fact, successfully refuted it. Identifying the flaws in the logic that supports the doctrine or demonstrating how the logic does not, in fact, correspond to observable reality are two of the ways a doctrine can be conclusively refuted, and in fact, both of those things have been done with regards to international free trade by me and others.
In his Wiki biography, we learn that he writes science fiction novels and designs video games. I would have hoped that he had expressed greater interest in Austrian economic theory than in science fiction and video games. He claims to be an Austrian school economist. He also is in favor of tariffs. He actually admits that by promoting tariffs (sales taxes on imported goods) in the name of Austrian economic theory, his position is "apparently oxymoronic." I recommend that he drop the adjective "apparently."
Yeah, not so much. You don't max level in CoD:MW2, WoW, and BF3 by reading Mises. And 750-page epic fantasies don't write themselves while you're mooning over your posters of Böhm-Bawerk and Rothbard. But skill as an elite sniper or battleground commander doesn't say anything about the correctness or incorrectness of one's economic analysis; after all, my predictive track record appears to be rather better than Mr. North's. I find Mr. North's lack of curiosity to be lamentable here. Since I clearly recognize the way in which it appears to be oxymoronic to suggest an Austrian defense of tariffs can be made, one would think that anyone who understands Austrian economic theory would wonder what could be the basis for such a seemingly outlandish claim. But Mr. North clearly doesn't want to look beyond the superficial and obvious, which may explain why he is still clinging to outdated and refuted classical doctrines despite there being numerous serious critiques and literally hundreds of years of evidence to the contrary.
He began his refutation of my defense of free trade by saying that I had invoked the names of Adam Smith and David Hume. He then went on to say that he has refuted both of them – he, plus a another guy, a man who says that Ron Paul is disingenuous on free trade, a man who is on the payroll of a industry trade association that promotes protective tariffs.

Sadly, I missed these refutations. If true, a lot of fat volumes on the history of economic thought will have to be revised. Poor old Hume. Poor old Smith. Refuted at last!

Needless to say, I remain skeptical.

He then went on to say that free traders do not pay any attention to economic history. We do not understand how economic theory applies to the real world.

Here is a man who claims to be an Austrian school economist. Yet he begins by saying that economic theory does not stand alone; economic history refutes it. He is clearly arguing that economic theory is refuted, not by better economic theory, but by economic history. This is a rejection of the first hundred pages of Ludwig von Mises' magnum opus, Human Action.

I think it is generally a good idea that when you announce your position as an Austrian school economist, you do not abandon the epistemology of Ludwig von Mises without at least explaining on what basis you have abandoned it.

The point that Mises made was simple enough: without economic theory to guide you in your selection of facts, and also in your explanation of the relevance of these facts, you cannot say anything relevant about economic history. You will be using some unstated economic theory to select and interpret the facts, except that you will be doing this either unconsciously or surreptitiously. There is no such thing as uninterpreted facts of economic history, according to Mises, and therefore the relevance of economic history must be assessed in terms of the accuracy of the theory. This is why Mises was a deductive theorist. He made this the foundational principle of his economic system.
It is true that I and others have refuted various things written by David Hume and Adam Smith. I should have mentioned David Ricardo too. Mr. North gets off to a bad start by first engaging in the genetic fallacy in order to illegitimately attempt to discredit Ian Fletcher and follows it up by admitting that he has not read any of our refutations. He then appeals to authority by pointing out that if we're right, a good deal of revision is in order. So, right from the gate we have an argument from ignorance involving one logical fallacy followed by two appeals to authority. While Mr. North has the right to be skeptical, he does not have the right to commit three logical fallacies in a misguided attempt to justify his ignorant skepticism.

Since he is unfamiliar with my argument, Mr. North fails to grasp that I am not merely saying economic history refutes the economic theory of free trade, I am saying that the theory of free trade is theoretically flawed and economic history helps illustrate those flaws. I am suggesting various corrections to the theory, which should then bring it in line with economic history as well as permitting it to serve as a functional predictive model as it has not in the past. Furthermore, I note that there are legitimate non-economic reasons to reject free trade as public policy, although these reasons cannot properly be considered flaws in the economic doctrine itself.

Because he is arguing from ignorance, Mr. North fails to understand that I am not abandoning Misean epistemology, but rather, asserting that it has been applied improperly in the past by Mises and others. In fact, I have been intending to go through one of Mises's pieces on free trade in much the same manner that I critically analyzed Henry Hazlitt's chapter on the subject; clearly I should try to get around to it sooner rather than later.
My critic then said that free traders adopt arguments that are 200 years old. He is correct.

One of the important aspects of truth is this: it survives for over 200 years. Amazing as it sounds, it survives for over 2000 years. One of the characteristics of truth is that it survives through time.

Then he went into a diatribe against the European Union as fascist, something that I certainly would not argue against. The fact that the European Union is fascistic has nothing to do with the truth or falsity of the logic of voluntary exchange.

We must also consider the effects of a government agent with a gun and a badge who threatens someone who wants to work out an exchange with somebody else. The logic of badges and guns extends even earlier than Adam Smith and David Hume, and it will extend a good deal longer than my life expectancy.

He never did reply to my presentation of badges and guns. There is a reason for this. He can't – not and still maintain the illusion that he is an Austrian school economist. There is nothing remotely Austrian about his analysis.
The problem isn't that the arguments are 200 years old, the problem is that they haven't been improved any in 200 years despite the growing number of theoretical criticisms and increasing amount of evidence of their failure as predictive models. The point, that Mr. North appears to have missed, is that the arguments have not survived through time. The continued belief of people who cling to those arguments and believe them to be true, while refusing to familiarize themselves with any of the counter-arguments, is not a characteristic of truth or intellectual credibility.

While the fascism of the European Union doesn't discredit the economic doctrine of free trade itself, it does discredit it as guiding principle of public policy. The European Union was founded and justified on the doctrine of free trade and it has delivered on many of the principles of that doctrine, including the free movement of labor, the free movement of capital, and the elimination of many tariffs. And yet, the prosperity it purported to deliver has revealed itself to be a mirage and the benefits it has delivered have come at a truly hideous cost.

I paid no attention to his "presentation of badges and guns" because it is wholly irrelevant to either the theoretical flaws in the economic doctrine or the observable failure of the doctrine as a predictive model. North is using them as some sort of negative magic talisman that he can wave to automatically refute anything he dislikes, but he cannot legitimately bring "badges and guns" into the equation without also bringing in every other non-economic aspect of public policy as well, such as immigration, crime, cultural heterodoxy, religion, and moral philosophy.

As for the idea that there is nothing remotely Austrian about my analysis, I find it remarkable that North can't see the link to Austrian theory in a criticism that is based, in part, upon the connection between trade deficits and the debt they necessarily incur.
Then he offered a paragraph on trade with South Korea. It turns out that, because of a new trade agreement that lowers tariffs from South Korea, Americans bought more goods from South Korea. Let's see if I understand this. When you lower the price of goods, more of them are sold. Yes, yes, I think this is correct. Americans bought more goods from South Korea than we sold to them. So – I think this is right – they lent dollars to America. Does this mean "you don't get something for nothing"? I suppose it does.

He expects hos readers to conclude:. "We must have more badges and guns and sales taxes! Nothing else will save us from poverty! Free trade, meaning free markets, meaning individual liberty of choice will destroy America otherwise! Tax us! Please tax us! We just can't stop ourselves!"

My conceptual problem here is in understanding how a man with a badge and a gun and a sales tax would have made Americans better off. Or South Koreans.

Then he said that NAFTA is bad. Since I have never written anything in favor of NAFTA, I certainly do not want to refute him on this point. My argument related to people making an exchange, and also to a third person with a badge and a gun who sticks the gun in the belly of one of the people who wants to make an exchange, and demands payment of a sales tax. As far as I can see, this has nothing to do with NAFTA, which is a bureaucratic system for enforcing managed trade.
Mr. North first managed to be unclear about the paragraph I "offered", which was not something I wrote but a quote from Pat Buchanan's recent column on free trade and South Korea. Second, he failed to note that despite the price of American goods being lowered, fewer were sold to South Korea. Third, he did not address the failure of the free trade-based predictions of the Office of the U.S. Trade Representative, as the statistical evidence by which those predictions must be judged showed U.S. exporters sold fewer made-in-America goods, services and agricultural products to Korean customers and therefore did the precise opposite of supporting "more good jobs here at home". Does this mean "you don't get something for nothing"? No, the failure of the trade office predictions means that either the predictive model based on the free trade doctrine was applied improperly or that the model itself is incorrect.

North repeatedly fails to understand that if one makes predictions utilizing certain assumptions and those predictions are incorrect, that is an indication that the assumptions are probably incorrect and need to be revisited. And the sounder the logic involved in the argument, the more likely it is that the foundational postulates themselves are false.

To address North's conceptual problem, a man with a badge and a gun and a sales tax would not have made South Koreans better off. They have done very handsomely out of the new free trade deal. But he could have prevented Americans from finding themselves worse off, as the US is now selling $444 million less to South Korea while adding another $825 billion in new debt. Would Mr. North would consider himself to be similarly better off if his salary were to be cut by 12 percent while he tacked on another 15% to the amount already owed on his credit card? Taking Mr. North's logic to the extreme, we would have to conclude that being unemployed with a maxed-out credit card is the ideal economic state.

Mr. North engages in another logical fallacy, this time the No True Scotsman, when he claims that NAFTA is nothing but a a bureaucratic system for enforcing managed trade. That is partially true, but North evades the undeniable fact that NAFTA is also a partial application of free trade doctrine, as it certainly freed up the international movement of capital and labor, and reduced many tariffs as well, and failed as a predictive model in very much the same way that the South Korean trade agreement failed.

If the free trade doctrine is correct, even partial applications should partially deliver upon its promises. But the economic history that Mr. North so strangely disdains repeatedly shows that they do nothing of the sort, but rather, usually play out precisely as predicted by the policy opponents who are critics of free trade doctrine.
Then he invoked Pat Buchanan. He said that Pat had – how can I put this euphemistically? – booted my donkey. Brutally. On a website which claims to be Austrian in perspective, invoking Pat Buchanan's authority on this issue seems to be an inappropriate source of refutation. I do not recall that Mr. Buchanan has ever identified himself as an Austrian school economist.

He also referred to the fact that I had cited Henry Hazlitt. He went on to say that Henry Hazlitt offered a remarkably incompetent argument for free trade. He insisted that he personally discovered 13 specific errors in Hazlitt's chapter on free trade.

Let me say at this point that I find all this delightfully amusing. Anybody who says in public that he has refuted any of Henry Hazlitt's positions with 13 different arguments is not someone I would regard as an unimpeachable source on his own powers of reasoning. Call me narrow-minded. Call me prejudiced. But that is the way I assess it.

If you read the sections which he cited from Economics in One Lesson, you may sense that you have encountered this line of reasoning before. If you have read Mises' Human Action, Chaptrer XXIX, Section 3, then you have indeed encountered this line of reasoning before. Hazlitt merely extended Mises' arguments, although he wrote his book several years before Human Action was published. It would be legitimate to argue that Mises extended Hazlitt's arguments. Of course, they were both extending arguments advanced by Hume and Smith, as well as subsequent free traders. So, what our would-be Austrian economist had argued is this: to be a well-informed Austrian economist on the issue of tariffs, you should begin with a rejection of Human Action.
Once again, Mr. North resorts to the genetic fallacy. And since, unlike Mr. North, I do not engage in the logical fallacy of appeals to authority, I will point out that at no point was I appealing to Mr. Buchanan's authority as an Austrian school economist or anything else. I was simply quoting Mr. Buchanan's very effective point that the trade office predictions concerning South Korea based on free trade doctrine had clearly failed, as America not only increased its trade deficit, but was actually exporting less to South Korea than before.

I wouldn't call Mr. North narrow-minded or prejudiced, simply ignorant for failing to examine the 13 Hazlittian errors I identified and foolish for thinking he could get away with such intellectually lazy behavior without getting nailed for it. Anyone who doubts my claim is certainly welcome to examine the two posts identifying the first seven errors and the second six committed by Henry Hazlitt in Chapter 11 of his useful, but outdated Economics in One Lesson. They can even read one free trader's attempt to defend Hazlitt from some of my criticisms. Mr. North didn't see fit to do any of that, he simply goes on to commit another logical fallacy by appealing to Hazlitt's authority.

As for Mises, I certainly intend to critically analyze his case for free trade as well. Rather than leap right to the source, I'm methodically working backwards and identifying each new error as it was added to the doctrine. Perhaps this will lead to an eventual rejection of Human Action, but I tend to doubt it. Mises's masterpiece is not a Marxian monolith, every last piece of which must be blindly accepted on faith lest it all collapse in complete disarray.

He then went on to say that the classical economic defense of free trade, the conventional defense of free trade, and the neo-Keynesian case for government intervention all have failed to take debt into account.

Then he presented statistics regarding America's debts to foreigners. It seems that owing fiat money issued by the Federal Reserve System at 0.09% per annum (T-bills) is a disaster for Americans, and getting the use of goods produced abroad is an even bigger disaster. "Heads, they win; tails, we lose." It's a lose-lose transaction. Sadly, Americans do not understand this. For those of us who think the U.S. government will default on this debt, we look at a Hyundai and think, "This is a good deal. They get T-bills. I get the car."

Here is reality, according to economics. Every exchange that is not completed involves debt. That is to say, it involves the use of credit. It involves the exchange of a promise to supply future goods in exchange for present goods.

Let's consider a common transaction. I buy a house. I borrow the money to buy the house. I am now in debt inside my house. This does not mean that I am less wealthy. In fact, from my point of view, I am more wealthy. That is why I bought the house. I regard the house as more valuable to me than the present value (discounted by the mortgage rate) of the future stream of income that I will use to pay off the house.

He said that prosperity which is generated by free trade is a mirage. He did not bother to prove this. It really does need proof. Why is the subjective value that someone gets from owning something a mirage? Why are the benefits of trade with someone across the street or across town a mirage? How about across state lines? What's that? It's not a mirage? But it is when I buy something across a national line, unless I get to pay a sales tax.

The logic of his position is not intuitive. It needs an explanation. But my critic did not provide one.

I buy things online. I do not pay a local sales tax. Is this increase of my subjective wealth a mirage? Would I be better off economically if I had bought it locally and paid a state and county sales tax? Are all of us who buy online victims of a mirage? This is the logic of his position. But his argument is not supported by logic. It is supported by lots of numbers issued by government statistical agencies. The numbers show that we online shoppers are suffering from the mirage of wealth. He understands this. I do not. Do you?
By attempting to justify free trade by appealing to the possibility of paying for a car with defaulted T-bills, Mr. North is advocating outright theft. This is monstrous, particularly for one who keeps making to the non-economic "badges and guns" argument. And note that North goes so far to claim that being in mortgage debt makes one intrinsically more wealthy, which is a spectacularly bizarre argument for someone questioning my Austrian allegiances to make. Furthermore, I did prove that the prosperity supposedly produced by free trade, which is customarily measured in GDP growth, is a mirage, because I showed that the debt/GDP per capita ratio has increased dramatically from 1960 to the present. While one can shift the argument from GDP to household assets, that doesn't change the fact that the debt figures demonstrate that the GDP-based argument for free trade is an illusory one.

His online consumer analogy fails by Austrian standards because he is confusing internal free trade with trans-national free trade. The two are not synonymous due to the relative immobility of capital and labor across international borders, as Mises himself noted.

"The sole justification for distinguishing in economic theory between domestic and foreign trade is to be found in the fact that in the case of the former there is free mobility of capital and labor, whereas this is not true in regard to the commerce between nations."

This does bring us to one of the non-economic aspects of the matter, but suffice it to say that unless Mr. North is as to pursue his occupation in Bangladesh or Mongolia as he is to move it to Florida or Arizona, he cannot reasonably make use of domestic analogies in order to defend international free trade. Indeed, this goes to the very heart of the matter, and the fact that many free trade advocates have gone so far as to dishonestly attempt to claim that the free movement of labor is not an intrinsic aspect of free trade is evidence that even some of free trade's more vehement supporters are beginning to realize some of the fundamental flaws of the doctrine.

To overcome this mirage, we need tariffs, he implied. In other words, when two people get together to make an exchange, and somebody with a badge and a gun does not stick his gun into the belly of one of the individuals to demand payment of the sales tax, this absence of guns and badges and the threat of violence decreases their prosperity. So, there is nothing like a badge and a gun in your belly, coupled with the demand that you pay a sales tax, to make you richer.

Think of the possibilities here. If there were another guy with a badge who sticks a gun in your back, and he demands that you pay an additional sales tax, you could get rich really fast.

This is the logic of every defense of tariffs that is not made exclusively in terms of financing the government. Any argument for tariffs that says that there is a benefit to society in general from sending out people with badges and guns to collect sales taxes, is a defense of badges and guns and sales taxes as crucial tools of production.

Historically and theoretically, Austrian school economists have not been prominent in promoting the idea that badges, guns, and higher sales taxes promote greater social welfare.

He said that the logic of free trade was always erroneous, because any consideration of debt which is put into the equation – he never did provide an equation – reveals from historical statistics the intrinsic falsity of the free-trade argument.
Mr. North is simply engaging in silly rhetoric here, meant to appeal to those Aristotle described as being incapable of education through dialectic. His appeal to badges and guns has nothing whatsoever to do with economic theory, and more to the point, is a terrible analogy since it leaves out the way each exchange reduces one party's ability to engage in future exchanges. And it is amusing that he tries to assert I am claiming badges and guns and sales taxes are crucial tools of production when if we follow his free trade logic to its extreme, it should be obvious that there will be no production taking place except where the capital and labor all flows to their ideal location for maximum efficiency.

He also mischaracterizes what I wrote, as he invents a link between the erroneous logic of free trade and the way in which the debt statistics disprove the empirical case for free trade. Not the logical one; the logic fails on its own terms. Mr. North clearly doesn't understand the differences between the theoretical case, the empirical case, and the moral case as he keeps mixing them up.
He specifically said that buying giant houses with no money down did not make people richer. Well, how about buying smaller houses with no money down? Did that make people poorer? A lot of people over the last 75 years have bought homes for 20% down, which certainly involved debt. Did that make them less rich? Did that impoverish them?

I realize that people can make bad decisions. That possibility is basic to all economic thought, but especially Austrian economic thought. People make bad decisions based on faulty information. Fractional reserve banking and central banking are sources of widespread false information. This perspective is basic to Austrian school economics. But the fact that people were misled by fractional reserve banking and central banking does not prove that they would have been better off if somebody with a badge and a gun had charged them an extra 5% or 10% sales tax.

This supposed Austrian school economist, who has never written anything on Austrian economic international trade theory in book form, and who claims that he has refuted 13 of Henry Hazlitt's arguments, and who has refuted David Hume and Adam Smith, is persuaded that people who pursue their individual self-interest according to the best information they have are really fools. They do not have good information. But he thinks he does. And so, this Austrian school economist wants the federal government to send out people with badges and guns to demand sales taxes from buyers, so that Americans who want to make exchanges will be less likely to do so. This will reduce their victimization by the mirage of wealth.

Taxation produces liberty. Taxation produces wealth. Taxation reduces mirages. Taxation clears the mind. Ingsoc was right, it seems.

More rhetoric and posturing. It is little wonder that he didn't understand the link between the housing boom and the financial crisis. But it is no harder to understand that taxation can, in some circumstances, produce liberty and wealth than to grasp the equally difficult notion that raising tax rates does not always increase tax revenue. Mr. North appears to have a very simplistic mind that does not understand complex relationships that are more than simple ratios.
Let me push this logic. If all this is true of trade between people across the invisible borders separating nations, then it must be logically true regarding the invisible borders separating states inside the United States. It must also be true with respect to invisible borders separating counties.

Therefore, in order to make everybody richer, each of these government jurisdictions should send out men with badges and guns to interdict the shipment of goods across those invisible lines. They must all impose sales taxes. Why? Because, if this is not done, society will become poorer. It will succumb to the mirage of wealth.

CONCLUSION

All this comes from a guy who says he is a member of Mensa, an organization of geniuses. This reminds me, once again, that if a buzz saw is set at the wrong angle, you can sharpen it for hours, but it will not cut straight.
Mr. North here reveals both his logical incompetence as well as demonstrating his insufficient knowledge of Mises. As I already pointed out, the free mobility of capital and labor inside the United States fundamentally distinguishes internal trade from international trade.

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309 Comments:

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Anonymous Idle Spectator June 21, 2012 5:32 AM  

tl;dr

Anonymous Simon June 21, 2012 5:51 AM  

If you're gonna say tldr, surely the semicolon is not required. Sort of makes a rather unpretentious abbr pretentious. Loses its lustre

Anonymous Rantor June 21, 2012 6:08 AM  

I find reading North frustrating as he fails to deal with factual arguments. I don't know how you have th epatience to deal with this man. As I doubt you can enlighten this person, I implore you to spend more time writing about Elves, souls and humans in a medieval environment.

Of course, just maybe, you can enlighten some of the other economic readers out there, at least those with brain.

Anonymous VryeDenker June 21, 2012 6:24 AM  

This seems like it might just be interesting. Hopefully a few of us will learn something by the time this is over.

Blogger Shimshon June 21, 2012 6:42 AM  

Vox, there are so many impediments to genuine free trade. Just the insane US corporate tax structure alone practically forces manufacturing and profits offshore. Then there's the monetary system that itself practically forces massively misallocated capital and investment (even in the absence of crazy bubbles). Given all these other impediments, I can see why your general argument makes sense. Free trade (or, really, freer trade with loosened restrictions on the movement of labor and capital) is indeed a net minus for the US, or developed economies in general.

Perhaps you and your critics on this subject are simply arguing over different topics? North is arguing from a theoretical perspective of genuine free trade and you are arguing from the perspective how trade works today. Or am I missing something?

Anonymous TheExpat June 21, 2012 6:44 AM  

It is already clear that North has no intention of 'playing fair' in this matter. He will only pick and chose which strawmen he feels best support his case (and his subscription-based income), and ignore or hand-wave the rest. The only way to make sure that North has to deal with all of the issues is to put everything in front of his subscribers and other supporters. After hashing things out here, I recommend editing a nice, tight article covering the most valid points and supporting facts, and seeing if Lew Rockwell is willing to give equal time to your views as well as North's.

Blogger Shimshon June 21, 2012 6:54 AM  

I would also like to add...

North's "arguments" are absolutely pathetic.

Blogger Vox June 21, 2012 6:59 AM  

Perhaps you and your critics on this subject are simply arguing over different topics? North is arguing from a theoretical perspective of genuine free trade and you are arguing from the perspective how trade works today. Or am I missing something?

No, I'm covering both. In case you missed it, I am first pointing out the flaws in the free trade argument, then showing how economic history illustrates those flaws. I am not making a solely empirical case. There are actually four cases to be made: theoretical, empirical, moral, and public policy. North is conflating the theoretical and the moral while ignoring the empirical and the public policy.

Blogger Vox June 21, 2012 7:01 AM  

I recommend editing a nice, tight article covering the most valid points and supporting facts, and seeing if Lew Rockwell is willing to give equal time to your views as well as North's.

I asked Lew about that. He's not, which is fine with me. I'm not one of his columnists after all while North is. So I'll just do it at WND instead with a link to what I write here.

Anonymous TheExpat June 21, 2012 7:04 AM  

I'll just do it at WND instead with a link to what I write here.

Okay, I'll admit it. I chuckled when I read that.
There are indeed benefits to having a good-sized soap box or two of one's own.

Anonymous ODG June 21, 2012 7:14 AM  

I expected better from Gary North.

I don't understand these supposed "intellectuals" from economics, evolution, atheism,lilberalism, etc. If you are so smug and confident in your views, you should be able to simply say "I've covered that argument before in this, that, and the other papers. Here are the links/bibliographies. Go check them out." Instead, they resort to these childish dismissive statements. Pathetic.

Anonymous Jegolan June 21, 2012 7:15 AM  

He didnt even link to the blog post he's refuting. That's not very polite. If anyone maybe could notify the people over at the Cafe Hayek blog about Vox's critique of free trade, maybe we could get a more fruitful discussion.

Anonymous ODG June 21, 2012 7:16 AM  

*liberalism, that is.

Anonymous Rantor June 21, 2012 7:16 AM  

i have now read the full GaryNorth article. Nothing but appeal to authority and his most simplistic gun and badge crap. He refuses to even discuss the issue and offer an argument.

Also all his arguments are based on his personal benefit. While it is true that some individuals will benefit from free trade, the country, if it loses jobs and can't replace them, loses. Germany only grew to strength by being an exporter of goods. The US grew as an exporter in the post war era, we are seeing that running a major trade imbalance is good for the exporter and bad for the importer.

Anonymous Anonymous June 21, 2012 7:21 AM  

Vox

I am not able to find a fault with your empirical analysis. But, I still cannot understand one crucial theoretical question: If free-trade(genuine theoretical) between nations is a net negative(including both nations), how can you say that free-trade(genuine theoretical) between regions within a nation state is a net positive (including both regions)? I think this is the point even North raises.

Blogger Vox June 21, 2012 7:40 AM  

If free-trade(genuine theoretical) between nations is a net negative(including both nations), how can you say that free-trade(genuine theoretical) between regions within a nation state is a net positive (including both regions)?

First, get a handle if you don't want your comments deleted. Second, due to the debt and labor mobility problems. Presumably you understand that foreign debt is an issue; even Samuelson and Keynes recognized it. Genuine free trade precludes the existence of nations, the "common market not free trade" is a dishonest dodge, as this quote from Mises shows:

Under a system of completely free trade, capital and labor would be employed wherever conditions are most favorable for production. Other locations would be used as long as it was still possible to produce anywhere under more favorable conditions. To the extent to which, as a result of the development of the means of transportation, improvements in technology, and more thorough exploration of countries newly opened to commerce, it is discovered that there are sites more favorable for production than those currently being used, production shifts to these localities. Capital and labor tend to move from areas where conditions are less favorable for production to those in which they are more favorable. But the migration of capital and labor presupposes not only complete freedom of trade, but also the complete absence of obstacles to their movement from one country to another.

I'll note that Nate's point about WVA's population was incorrect. It fell from 2,005,552 in 1950 to 1,852,994 in 2010, and in relative terms, went from 1.3 percent of the US population to .06 percent. This shows that there is a large degree of internal population mobility that would completely destroy the USA if exhibited on an international level. Imagine if instead of 308,745,538 people, the USA had 139,825,037 of its least productive, least ambitious residents. That's the sort of thing we would expect to see with genuine free trade.

Now, I admit that the existence of nations is not an economic argument, but then, neither is "guns and badges". That's why I have noted this is an argument with at least four distinct aspects.

Anonymous VryeDenker June 21, 2012 7:44 AM  

"I am not able to find a fault with your empirical analysis. But, I still cannot understand one crucial theoretical question: If free-trade(genuine theoretical) between nations is a net negative(including both nations), how can you say that free-trade(genuine theoretical) between regions within a nation state is a net positive (including both regions)? I think this is the point even North raises."

I'm am merely a computer programmer, so don't quote me, but I would imagine that trading between regions within a country would look good for the country as a whole, but would impact negatively on the region getting the short end of the stick. The country would still have a GDP of X, but Region#1 might lose 10 Dollars forcing them to retrench a trinket maker, while Region#2 might gain 10 Dollars, allowing them to employ 1 more doo-dad maker. The Country's GDP and employment record stays the same, but those of the two regions are affected.

I would further imagine the same thing would happen on a globalist view if one substitutes "the world" for "country" and "country" for "region": one fewer American is employed, while one extra Korean is employed because of the shifting concentration of capital.

Blogger Vox June 21, 2012 7:47 AM  

I think this is the point even North raises.

I should also mention, if that is the case, he clearly doesn't know his Mises.

The sole justification for distinguishing in economic theory between domestic and foreign trade is to be found in the fact that in the case of the former there is free mobility of capital and labor, whereas this is not true in regard to the commerce between nations.

Note: capital AND labor. Furthermore, note that this is a practical distinction that Mises makes, it's not a purely theoretical point.

Anonymous Sweet Lass June 21, 2012 7:52 AM  

I find it...entertaining.. that he uses the fact that you have a wide range of interests (and success in those areas) as a way to discredit you. Really? Also, to be so dissmissive of your degree IN ECONOMICS. Hysterical. Has he perhapse decided that bachelor degrees do not count? Surely Economic programs everywhere are up in arms!

Blogger Dan Hewitt June 21, 2012 7:53 AM  

Genuine free trade precludes the existence of nations

Right. So you are not denouncing free trade via voluntary exchange amongst individuals, but rather commerce conducted in accordance with ten-thousand page decrees rammed down the throats on individuals by nation-states?

Anonymous Sweet Lass June 21, 2012 7:56 AM  

In light of the North's dismisal of your degree, I am now going to demand that anyone who has an opinion about Economics MUST have a Masters or PH D in it. Starting with North himself....

Anonymous Sweet Lass June 21, 2012 7:58 AM  

"I asked Lew about that. He's not, which is fine with me. I'm not one of his columnists after all while North is. So I'll just do it at WND instead with a link to what I write here."

Awesome. I didn't know that Rockwell was such a punk.

Blogger Anonymous June 21, 2012 8:02 AM  

This comment has been removed by the author.

Anonymous JazzyB June 21, 2012 8:05 AM  

Vox

Sorry for posting as Anonymous earlier. I tried logging in with my google account, but it turned out as Anonymous.

So, essentially, the point is that: if a country R trades with a country P in a complete transaction T, then

i) Both Vox and North says T is positive.
ii) North says that both of P and R will be positive.
iii) Vox says either R or P will be positive and the other negative. Since USA is one of the richer countries in the world, a free trade with poorer countries are likely to be negative for USA.

Am I right in my assessment?

Anonymous A.Handle June 21, 2012 8:07 AM  

"He never did reply to my presentation of badges and guns."

No problem he's just my business patner ( said with a mafioso accent)

Blogger Vox June 21, 2012 8:16 AM  

So you are not denouncing free trade via voluntary exchange amongst individuals, but rather commerce conducted in accordance with ten-thousand page decrees rammed down the throats on individuals by nation-states?

No, I'm also denouncing some free trade via voluntary exchange amongst individuals across national borders, or is as much more often the case, between various government-created entities. There is, in fact, an interesting path to attack free trade doctrine based on the nature of corporations.

I didn't know that Rockwell was such a punk.

He's not. He wrote a very generous piece about RGD the day it was released. Even at WND, battles between columnists are very much frowned upon. I was only permitted to go directly after Malkin in my column because her book was a legitimate topic of national discussion at the time, and even then, it made them more than a little uncomfortable.

Am I right in my assessment?

I would say "assuming T to be positive". I wouldn't go so far as to declare it is positive. And R & P could both be negative, but as you say, it's likely to be negative for the USA.

Anonymous JazzyB June 21, 2012 8:28 AM  

So, in a scenario where USA is -10 and Korea is +20 in a transaction, your case is that free trade is "wrong for USA". I understand that as a US citizen. But, as an economist, we cannot bring that patriotism into the equation, correct? Because, in the end, the combined economy benefited from that transaction (which could, in turn, bring a +15 to USA in future). When I look around the world, the standard of living has increased in many a places because of this. You just need to look at China and India to realize how beneficial it has been for the world.

Anonymous paradox June 21, 2012 8:32 AM  

"...who appeals to the authority of Ludwig von Mises to play the academic credential game..."

It's hilarious North would play that game, considering he advocates for a Wal-Mart University.

Anonymous the abe June 21, 2012 8:37 AM  

Given the relatively tight-knit nature of the published Austrian thinkers and students living on this planet, it is a complete disgrace to Mises' legacy that North (and Rockwell, FTM) is either too smug or too cowardly to broach a legitimate line of query into the matter. Even a simple. courteous email from North asking Vox to lay out a case would have been ample opporrtunity for Vox to either stand or fall on merits.

International Free trade is fundamentally a product of methodological holism, rather we like it or not. Without a thorough Austrian accounting of this and why it's somehow more advantageous than all the Keynsian and Marxist hollistic frameworks needs to be addressed.

Anonymous The Gray Man June 21, 2012 8:45 AM  

JazzyB: So, in a scenario where USA is -10 and Korea is +20 in a transaction, your case is that free trade is "wrong for USA". I understand that as a US citizen. But, as an economist, we cannot bring that patriotism into the equation, correct?

The goal is to show what is best for you, your family, and your country--not people living in a hellhole on the other side of the world. Making them better off at your expense is not a smart decision.

Blogger JD Curtis June 21, 2012 8:46 AM  

This North yutz is in WAY over his head. Can you say, 'Fighting Withdrawal' anyone?

Blogger Vox June 21, 2012 8:46 AM  

So, in a scenario where USA is -10 and Korea is +20 in a transaction, your case is that free trade is "wrong for USA". I understand that as a US citizen. But, as an economist, we cannot bring that patriotism into the equation, correct?

No, that's not quite right. What we have is the economists saying +20 is good for Korea and -10 is good for the USA. And that's simply not true; the economist can certainly say if something is good or bad for any of the actors, and should say so if that is the case. What we have is the free traders wrongly claiming that was is bad for the USA is actually good for it.

Anonymous VryeDenker June 21, 2012 8:48 AM  

"When I look around the world, the standard of living has increased in many a places because of this. You just need to look at China and India to realize how beneficial it has been for the world."

What happened to the Americans who built the stuff that now gets built in China and India? A great case study is the impact on the British auto industry after Rover, Bentley and friends decided to offshore their factories.

Anonymous the abe June 21, 2012 8:49 AM  

It's hilarious North would play that game, considering he advocates for a Wal-Mart University.Paradox

Well, last I was in college, most of my classes were taught by 3rd world, unskilled grad students that could barely speak English. Walmart sells products made by unskilled, 3rd world peoples. Not a stretch, really.

Blogger LP 999/Eliza June 21, 2012 8:49 AM  

Excellent response, this is the perfect break from current events. However, free trade is an issue that is always before a nations economy.

More to follow isn't just 'a saying' but a promise around here.

Blogger Dan Hewitt June 21, 2012 8:53 AM  

No, I'm also denouncing some free trade via voluntary exchange amongst individuals across national borders, or is as much more often the case, between various government-created entities. There is, in fact, an interesting path to attack free trade doctrine based on the nature of corporations.

Borders and corporate privilege come from the nation-state, and obviously create their own distortions. The interventions you are suggesting address problems that are created, in part, by previous interventions. Since we’re all throwing Mises quotes at each other today:
With a few exceptions contemporary commentators on economic problems are advocating economic intervention. This unanimity does not necessarily mean that they approve of interventionistic measures by government or other coer¬cive powers. Authors of economics books, essays, articles, and political platforms demand interventionistic measures before they are taken, but once they have been imposed no one likes them. Then everyone—usually even the authori¬ties responsible for them—call them insufficient and unsat-isfactory. Generally the demand then arises for the replace¬ment of unsatisfactory interventions by other, more suitable measures. And once the new demands have been met, the same scenario begins all over again.

Lastly, I appreciate all of your responses over the last few days. Blogs where the author interacts with the readers are the most rewarding to read, so thanks for taking the extra time to participate in the comments.

Blogger Joshua_D June 21, 2012 8:56 AM  

From what I understand of Human Action, from reading related material and not the book ... yet, it would seem very important to distinguish that capital is very different from labor. Labor is people, and people act.

It seems to me that no economist should just assume that labor will move. I think Nate makes a good point. I do think some labor does move, but it seems incorrect to assume that all labor available would move even if everyone could move.

If I move my factory from NC to Cali or to Chili, it seems ridiculous to assume that the all the labor in NC would choose to move along. Unlike capital, people get to make choices. And many people make choices based on the choices of other people.

Vox, already pointed out that the argument has four different aspects. I would point out that the labor factor - Humans - in any economic theory is very different from capital, production processes, etc.

I'm pretty sure Vox has pointed this out beforel; although capital is fungible, labor is not.

Anonymous aero June 21, 2012 8:57 AM  

Mr. North

You don't have to have economic degree to understand that each oscillation get worse. That that they're getting closer. That the handlers of the economy don't know what going on. Because their cures do more damage.

Anonymous VryeDenker June 21, 2012 9:00 AM  

Vox:"What we have is the free traders wrongly claiming that was is bad for the USA is actually good for it."

Maybe they mean it in the sense that it builds character...?

Blogger swiftfoxmark2 June 21, 2012 9:08 AM  

I didn't know that Rockwell was such a punk.

He may also just not want to get in the middle of the debate himself. I suspect that he and Gary North go way back as well, although I haven't checked into this thoroughly.

Blogger Vox June 21, 2012 9:15 AM  

Since we’re all throwing Mises quotes at each other today

Touche.... You'll note that I'm not actually appealing to his authority myself, I'm simply demonstrating that I'm not quite the Austrian ignoramus that Mr. North would have his readers believe and that North has not necessarily grasped Mises's own arguments.

I do think some labor does move, but it seems incorrect to assume that all labor available would move even if everyone could move.

Of course. That's part of my point. And people are a lot more willing to move from Michigan to Arizona than from Michigan to Zimbabwe. I mean, both Nate and I are examples of labor that has moved, we know better than most the trouble it involves. And having moved both within and without the country, I can say that the latter is at least 20x harder. But free trade doctrine requires that people move.

I appreciate all of your responses over the last few days. Blogs where the author interacts with the readers are the most rewarding to read, so thanks for taking the extra time to participate in the comments.

You're quite welcome. I quite enjoy discussions like these where no one is simply engaging in rhetoric or running away and hiding as soon as someone else makes a solid point contradicting them.

Blogger Shimshon June 21, 2012 9:36 AM  

Sweet Lass, I don't know Lew personally but I have had the occasional correspondence with him over more than a few years now. In my experience he is quite the gentleman. He is always interested in articles by new or otherwise unknown or different talent, in addition to his stable of regulars, so if he turned down Vox, like Vox, I respect his reasons. I imagine if North had mentioned Vox by name (and it was certainly rude not to), he would have been more inclined to oblige.

Anonymous Salt June 21, 2012 9:42 AM  

I'm surprised LRC allowed North to take shots at an unattributed article easily, yet not, linked to. North mentions a bit about Vox, yet evidently deems it beneath him to actually name the author or the blog.

Anonymous Josh June 21, 2012 9:44 AM  

do people actually make the case that free trade, by which I mean the removal of tariffs on imported goods, without changing anything else in the legal regime (taxes, regulations, subsidies), is a net benefit to both parties in the aggregate?

obviously as a pure transaction if one can purchase an imported good or service that is cheaper than a domestic one, both the foreign seller and domestic buyer are better off (the seller gets a profit from the sale and the buyer has more money with which to purchase other goods and services, or to save).

to play the bastiat, what is unseen are the effects of this transaction on the domestic producers of those goods who lose customers and profits.

however, what about the role of competition in the marketplace? does it not bring benefits to the consumer in lower costs, increased quality, and greater variety? there are numerous examples of foreign competition bringing improvements I'm industries (an easy one is in automobiles).

Anonymous Josh June 21, 2012 9:50 AM  

I suspect that he and Gary North go way back as well, although I haven't checked into this thoroughly.

they do, they were both on congressman paul's staff in the 70s

Blogger SarahsDaughter June 21, 2012 9:56 AM  

"however, what about the role of competition in the marketplace? does it not bring benefits to the consumer in lower costs, increased quality, and greater variety? there are numerous examples of foreign competition bringing improvements I'm industries (an easy one is in automobiles)." - Josh

In the US, isn't that when the challenge of regulations and unions come into play? Creating an inability for manufacturers, in the US, to compete when it comes to cost?

Blogger Dan Hewitt June 21, 2012 9:57 AM  

About the whole moving thing, I've been thinking about it and I'm not so sure that free trade REQUIRES people to move. All else being equal, capital wants to move to low wage areas and labor wants to move to high wage areas.

Let's say Michigan becomes a depressed area. In the absence of any economic intervention, wages would fall. Residents who don't wish to move to Zimbabwe would simply have to accept lower wages. And wages would not keep spiralling downward, because the inflow of capital would bid them back up.

Ironically, if freedom of movement were allowed, there would probably be Zimbabweans living in Michigan who would be the first to move back. Followed by other folks who don't have strong ties to Michigan - other recent immigrants probably.

So free trade PERMITS people to move would be a more accurate statement.

Blogger Vox June 21, 2012 10:06 AM  

So free trade PERMITS people to move would be a more accurate statement.

No, not at all. The only reason the people have to move in the first place is because their jobs disappeared, in many cases due to the fact that their neighbor no longer has to buy x from a local supplier, but can obtain it from a foreign supplier. The very doctrine of free trade is predicated on capital and labor moving to where they are most valued.

It's really quite inhuman and totally antithetical to all cultural, traditional, and non-economic values when viewed accurately. If the USA adopted genuine free trade, millions of Americans would either have to move abroad or adopt a permanently lower standard of living every year.

Anonymous Josh June 21, 2012 10:11 AM  

In the US, isn't that when the challenge of regulations and unions come into play? Creating an inability for manufacturers, in the US, to compete when it comes to cost?

That's been my point all along. People blame free trade for jobs leaving the US and moving overseas, while the bigger contributor is our tax and regulatory regime.

Blogger That Crazy Christian June 21, 2012 10:11 AM  

Well done Vox!

I was actually laughing when I read this paragraph: "Why is the subjective value that someone gets from owning something a mirage? Why are the benefits of trade with someone across the street or across town a mirage? How about across state lines? What's that? It's not a mirage? But it is when I buy something across a national line, unless I get to pay a sales tax."

Subjective value Mr. North? We're talking economic theory and you're talking subjective value? We point to a massive trade deficit and you want to talk about feeling good? Good grief.

Also shifting the standards from international arenas to national or local arenas simply demonstrates an inability to think critically about the subject, because the differences are strikingly obvious.

Anonymous Josh June 21, 2012 10:12 AM  

Vox,

have you read "the outline of sanity" by chesterton, or any other writings on distributism??

Blogger Vox June 21, 2012 10:21 AM  

That's been my point all along. People blame free trade for jobs leaving the US and moving overseas, while the bigger contributor is our tax and regulatory regime.

You're creating a false distinction. Both things contribute directly to the problem. Without free trade, the effect of the tax and regulatory regime is smaller because the ability of capital and labor to escape it is diminished. The worst thing you can do is have free trade in combination with a heavy tax and regulator regime.

You appear to have some emotional connection to free trade that you're having trouble detaching yourself from. I understand, but until you stop trying to defend it and start actually analyzing it, you won't grasp the central issues. It's an apparent dichotomy that free trade can reduce human freedom, but it's no different than understanding how freedom to join the labor force can actually reduce women's ability to choose to stay home or how raising tax rates can reduce tax revenue.

Blogger Vox June 21, 2012 10:21 AM  

have you read "the outline of sanity" by chesterton, or any other writings on distributism?

No, never read that.

Anonymous Meh June 21, 2012 10:30 AM  

So, in a scenario where USA is -10 and Korea is +20 in a transaction, your case is that free trade is "wrong for USA". I understand that as a US citizen. But, as an economist, we cannot bring that patriotism into the equation, correct? Because, in the end, the combined economy benefited from that transaction (which could, in turn, bring a +15 to USA in future). When I look around the world, the standard of living has increased in many a places because of this. You just need to look at China and India to realize how beneficial it has been for the world.

Why the HELL should our elected representatives decide to improve India and China at our expense? Is that really what we pay them to do? I only vote for people who do what's right for the USA, period.

Anonymous Josh June 21, 2012 10:30 AM  

You appear to have some emotional connection to free trade that you're having trouble detaching yourself from.

it might be more correct to say that I have sine emotional connection to less government intervention.

I'm not trying to make an argument for free trade as much add I'm trying to make those who are attacking free trade defend their arguments.

you have to admit that it is difficult for a libertarian or anarcho capitalist to wrap their heads around the idea that confiscating more money from consumers in the form of tariffs actually benefits those consumers.

Anonymous Meh June 21, 2012 10:33 AM  

If I move my factory from NC to Cali or to Chili, it seems ridiculous to assume that the all the labor in NC would choose to move along.

Having participated in some "where do we move the factory" discussions, I can assure you that corporations do not assume that all the labor will come along. They take the attitude that anyone willing to move at his own expense can keep his job, but the rest of the labor force can be readily acquired in the new location.

Anonymous Josh June 21, 2012 10:33 AM  

No, never read that.

it's his critique of both capitalism and communism, essentially arguing that b
both ultimately have similar results: communism leads to total control of society and economy by the state, capitalism to total control of society and economy by corporate cartels

Anonymous paradox June 21, 2012 10:36 AM  

the abe June 21, 2012 8:49 AM
Well, last I was in college, most of my classes were taught by 3rd world, unskilled grad students that could barely speak English. Walmart sells products made by unskilled, 3rd world peoples. Not a stretch, really.


That's what I find funny, North is making a big to-do about academic credentials then previously stated academic credentials are not really that valuable and so easy a caveman could acquire them at Wal-Mart University.

Anonymous Josh June 21, 2012 10:36 AM  

Without free trade, the effect of the tax and regulatory regime is smaller because the ability of capital and labor to escape it is diminished. The worst thing you can do is have free trade in combination with a heavy tax and regulator regime.

and that line of thought leads to capital controls and, ultimately, less freedom

Blogger Nate June 21, 2012 10:39 AM  

"Let's consider a common transaction. I buy a house. I borrow the money to buy the house. I am now in debt inside my house. This does not mean that I am less wealthy. In fact, from my point of view, I am more wealthy."

Wait...

WHAT?

I mean I no I already said North could be safely dismissed for appeals to academic authority... but seriously... does the man have such boundless hypocracy that he will urinate on Mises while appealing to his authority?

Anonymous Fatso McGraw June 21, 2012 10:40 AM  

This is good stuff. I find North's glib assertion that the US is gaining from Korea because we're getting physical stuff for trinkets (worthless dollars) to be amusing. I don't know if it's outright theft, because each party is at least somewhat voluntary to the transaction. Still, it's not in the USA's long run interest to be duping our suppliers with Monopoly money. Surely North must have considered this. Or maybe not. Growing up I liked the theory of free trade. I can't argue with the results that Buchanan (and Vox) point out.

Anonymous Josh June 21, 2012 10:40 AM  

if one is to argue that state intervention in foreign trade can lead to grater wealth, could one also make those same arguments inn respect to domestic trade?

Blogger Vox June 21, 2012 10:43 AM  

you have to admit that it is difficult for a libertarian or anarcho capitalist to wrap their heads around the idea that confiscating more money from consumers in the form of tariffs actually benefits those consumers.

It shouldn't be. They simply don't understand that the option is between a) paying some extra money to cover the tariffs or more expensive domestic goods, and b) paying a shipper to transport all their earthly goods to China where they'll be working. This isn't an exaggeration. On British TV, one sees HSBC ads which are targeted at Chinese and other Asians moving to Canada and other Western countries.

It's just hard for the people of the West to understand, even when they live in a country that was settled by people seeking better opportunities. The ironic thing is that Mises himself understood the non-economic argument for rejecting free trade was not an evil one. He was wrong, but not in the same way that the free traders of today are wrong:

But whatever may be the prerequisites for the development of international trade, protective tariffs can accomplish only one thing: to prevent production from being carried on where the natural and social conditions are most favorable for it and to cause it to be carried on instead where conditions are worse. The outcome of protectionism is, therefore, always a reduction in the productivity of human labor. The freetrader is far from denying that the evil that the nations of the world wish to combat by means of a policy of protectionism really is an evil. What he maintains is only that the means recommended by the imperialists and protectionists cannot eliminate that evil. He therefore proposes a different way. In order to create the indispensable conditions for a lasting peace, one of the features of the present international situation that the liberal wishes to change is the fact that emigrants from nations like Germany and Italy, which have been treated like stepchildren in the division of the world, must live in areas in which, because of the adoption of antiliberal policies, they are condemned to lose their nationality.

What Mises fails to recognize is that they will lose their nationality under the liberal free trade regime too. His outlook was essentially colonial in nature; he thought free trade would turn the world into the West. But as it turns out, protectionism can do a better job of eliminating that evil than his liberal free trade doctrine.

Blogger Dan Hewitt June 21, 2012 10:43 AM  

The only reason the people have to move in the first place is because their jobs disappeared, in many cases due to the fact that their neighbor no longer has to buy x from a local supplier, but can obtain it from a foreign supplier.

Labor is a scarce resource. If the price of it were permitted to fluctuate freely, involuntary employment would not exist. The whole “one intervention begets another” thing...

You’re picturing a foreign labor ‘sink’ or ‘black hole’ where labor disappears to. No such thing exists, as opportunity cost applies to those folks also. And comparative advantage dictates that the work goes to whomever has the lowest opportunity cost.

If the USA adopted genuine free trade, millions of Americans would either have to move abroad or adopt a permanently lower standard of living every year.

There are two counteracting forces here. Standards of living would converge around the world, yes, which means our standard would go down. But capital and labor being put to their most productive uses would increase real wealth and raise standards of living. I’m not sure which of these would be the stronger force.

Blogger Nate June 21, 2012 10:45 AM  

"You're creating a false distinction. Both things contribute directly to the problem. Without free trade, the effect of the tax and regulatory regime is smaller because the ability of capital and labor to escape it is diminished. The worst thing you can do is have free trade in combination with a heavy tax and regulator regime."

So I have these people that I want to keep in my house.... and I started torturing them. I pulled out their finger nails... and burned them with hot pokers and such... and then they walked out the door.

And thus the door is clearly just as much to blame as the torture!

Anonymous Question June 21, 2012 10:47 AM  

If the USA adopted genuine free trade, millions of Americans would either have to move abroad or adopt a permanently lower standard of living every year.

And in either case, how could they afford to buy the stuff that's being produced cheaply abroad?

Anonymous TheExpat June 21, 2012 10:47 AM  

you have to admit that it is difficult for a libertarian or anarcho capitalist to wrap their heads around the idea that confiscating more money from consumers in the form of tariffs actually benefits those consumers.

And yet that is exactly what happened in Japan, South Korea, and many other countries (including the early U.S.) who pursued 'protectionist' policies in order to foster domestic industry. The key is that the tariffs are recycled to support domestic industry in some manner, so the money does not simply disappear from domestic consumers with no corresponding benefit, as the number of higher paid, skilled jobs increases.

If one's theory and especially predictions made based on that theory are contradicted by free-world examples, then it is time to reexamine one's theory.

Blogger Joshua_D June 21, 2012 10:51 AM  

Nate June 21, 2012 10:39 AM
"Let's consider a common transaction. I buy a house. I borrow the money to buy the house. I am now in debt inside my house. This does not mean that I am less wealthy. In fact, from my point of view, I am more wealthy."

Wait...

WHAT


Yeah ... he said that. He also said that taking foreign people's stuff and defaulting on the debt we owe them is a benefit. Maybe North was drunk when he wrote that response. We all say stupid things from time to time, especially if we've had a few too many. And by "we" I mean "me," so I can understand. :)

Anonymous Salt June 21, 2012 10:52 AM  

And thus the door is clearly just as much to blame as the torture!

But it's out the door they went.

Blogger Vox June 21, 2012 10:59 AM  

There are two counteracting forces here. Standards of living would converge around the world, yes, which means our standard would go down. But capital and labor being put to their most productive uses would increase real wealth and raise standards of living. I’m not sure which of these would be the stronger force.

You are correct. But you should be sure. Do the math and set aside the debt issues. Small group of around 600 million at 50k/capita per year, large group of 6.4 billion at 3k/capita per year. The average is 7k/capita. So even if global wealth doubles over the next 50 years thanks to free trade, the West's standard of living will have to fall to about a quarter of what it is now.

Throw in the near total destruction of the nations of the world and that's the future you're advocating if you're a free trader.

Anonymous Josh June 21, 2012 11:03 AM  

And thus the door is clearly just as much to blame as the torture!

if not more so

Anonymous Yorzhik June 21, 2012 11:06 AM  

Gads, so many comments already it makes no sense to try and comment at all.

VD... you're wrong.

Blogger Joshua_D June 21, 2012 11:08 AM  

Wait a minute ...

Standards of living would converge around the world, yes, which means our standard would go down. But capital and labor being put to their most productive uses would increase real wealth and raise standards of living.

That sounds a lot like ... fracking commies! Will we ever get rid of the Commies! At least the Russians, Chinese and Cubans were forthright about being Commies. Now we have to deal with environmentalists and free-traders! ;)

Anonymous 11B June 21, 2012 11:09 AM  

The WSJ, the guys who want to put an amendment in the Constitution for open borders and the guys who never met a free trade deal they did not like, wrote in March of this year regarding the South Korean deal that:

Because South Korea's import tariffs were generally higher than the U.S.'s, the effect of the deal will likely be to reduce South Korea's surplus in trade with the U.S., which amounted to $13.1 billion last year, but not eliminate it completely.

Are these guys ever right?

Anonymous Josh June 21, 2012 11:11 AM  

Throw in the near total destruction of the nations of the world and that's the future you're advocating if you're a free trader.

because you would need a supranational entity to manage the free trade agreements?

Blogger Vox June 21, 2012 11:13 AM  

because you would need a supranational entity to manage the free trade agreements?

No, because of all the people moving from one nation to another. The EU is already dealing with this problem with all the young Greeks and Spaniards having the right to go to Germany and England and collect benefits. Free trade means opening up your entire social support network to Nigerians and Indonesians.

Blogger Vox June 21, 2012 11:15 AM  

VD... you're wrong.

You make such a convincing case.

Anonymous JazzyB June 21, 2012 11:15 AM  

Consider that manufacturing for all the computer/laptop/smartphone/tablet devices are done in the USA instead of China. Do you think that the people in the USA would have enjoyed the standard of living that they have now? We would still be probably paying $2000 for a computer, and would still have been in the desktop/laptop age instead of a smartphone/tablet age. Are we considering the aspect of wealth created by lowering the prices? If I have an income of 4 bucks per day and coffee was 4 bucks yesterday and 2 bucks today, then I have doubled the my wealth without increasing the income.

Anonymous Josh June 21, 2012 11:16 AM  

Free trade means opening up your entire social support network to Nigerians and Indonesians.

social support networks should obviously be eliminated

Blogger Dan Hewitt June 21, 2012 11:19 AM  

But you should be sure. Do the math and set aside the debt issues.

That is impossible to predict. If I have in fact stole wealth from anyone via the mercantilism of my nation-state, then I should be glad to relinquish it.

Throw in the near total destruction of the nations of the world and that's the future you're advocating if you're a free trader

You might like the anarcho-libertarian view if you spent time thinking about it. You could live in a community of like-minded people, and could exclude anyone you wish. Which, I get the impression, would be a long list :)

Blogger Joshua_D June 21, 2012 11:21 AM  

Josh, at some point you have to apply your utopian ideals to the real world.

Blogger Dan Hewitt June 21, 2012 11:21 AM  

That sounds a lot like ... fracking commies!

Commies are into free markets?

Blogger Dan Hewitt June 21, 2012 11:22 AM  

Joshua, calling someone utopian is not an argument.

Anonymous JazzyB June 21, 2012 11:24 AM  

And to the people who are saying that we should worry about only the USA- thats a political statement, not economics. Economics, as a subject of study, does not have the liberty to do that. I understand Vox when he says economists should say that USA is -10 in a transaction and Korea is +20 - thats just asking for truth. But to say that we don't care what Korea makes simply because USA is negative is not an economic thought. That's just political.

Anonymous Josh June 21, 2012 11:27 AM  

vox, your contention is that free trade increases debt, correct?

Anonymous Feh June 21, 2012 11:29 AM  

Consider that manufacturing for all the computer/laptop/smartphone/tablet devices are done in the USA instead of China. Do you think that the people in the USA would have enjoyed the standard of living that they have now? We would still be probably paying $2000 for a computer, and would still have been in the desktop/laptop age instead of a smartphone/tablet age.

Tablets and smartphones improve our standard of living?

Far as I can tell they are a source of distraction that drains productivity and causes traffic accidents. Oh, and they provide more convenient access to porn. Yaaay, improved standard of living!

For most applications, the improvement in the standard of living came from the first desktop, and very little after that. I have a much better computer than I did in 1985 -- and I largely use it for exactly the same purpose (word processing and spreadsheets) so I am not sure the extra power has really achieved any useful productive purpose.

Anonymous Josh June 21, 2012 11:30 AM  

Josh, at some point you have to apply your utopian ideals to the real world.

yeah, free markets, no regulations, gold standard, full reserve banking, no welfare state, no taxes...sounds so miserable...

Anonymous Josh June 21, 2012 11:31 AM  

 Oh, and they provide more convenient access to porn. Yaaay, improved standard of living!

hey, leave our porn out of this

Anonymous pdimov June 21, 2012 11:31 AM  

Vox: Without free trade, the effect of the tax and regulatory regime is smaller because the ability of capital and labor to escape it is diminished.

On the contrary, the effect is bigger precisely because capital and labor can't escape it. As a consequence, lack of free movement of capital and labor tends to keep the regime somewhat sane.

The worst thing you can do is have free trade in combination with a heavy tax and regulator regime.

No, the worst thing is lack of free movement of capital and labor, combined with heavy taxes and regulations. This kills the economy (or drives it underground).

Blogger Joshua_D June 21, 2012 11:32 AM  

Dan Hewitt June 21, 2012 11:22 AM
Joshua, calling someone utopian is not an argument.


Who said I was arguing?


Dan Hewitt June 21, 2012 11:19 AM
You might like the anarcho-libertarian view if you spent time thinking about it. You could live in a community of like-minded people, and could exclude anyone you wish. Which, I get the impression, would be a long list :)


Why do you think that you would get to live in a community of like-minded people, and could exclude anyone you wish?

I haven't read a whole lot on anarcho-libertarianism, but it seems apparent that if we were neighbors, I could sell my property to anyone I wish, whether they were like-minded or not, and there wouldn't be much you could do about it, except ... move.

Blogger Joshua_D June 21, 2012 11:34 AM  

Josh June 21, 2012 11:30 AM
Josh, at some point you have to apply your utopian ideals to the real world.

yeah, free markets, no regulations, gold standard, full reserve banking, no welfare state, no taxes...sounds so miserable...


I didn't say "miserable." I said "utopian."

Blogger Nate June 21, 2012 11:35 AM  

"yeah, free markets, no regulations, gold standard, full reserve banking, no welfare state, no taxes...sounds so miserable..."

And yet you didn't mention free trade here.

Anonymous Sweet Lass June 21, 2012 11:35 AM  

It was cowardly and my sweet little opinion is that he should have done it to properly maintain a good reputation editorially. Otherwise he is protecting his writer and not providing the best product for the reader. You know, being a punk editorially.

Anonymous Shild June 21, 2012 11:36 AM  

You appear to have some emotional connection to free trade that you're having trouble detaching yourself from.

This is most certainly true of me. Amidst all my readings in Austrian economics and Libertarian politics, the harsh criticism of interventionism and economic planning in all its forms, the disparagement of socialist and fascist schemes, there is one underlying attitude.

This attitude is expressed explicitly by Nock in his book Our Enemy, the State, and by Rothbard who asked "Do you hate the State?" It is a basic worldview in which State power is necessarily parasitic, tyrranical, dishonest, and essentially evil.

Anonymous Sweet Lass June 21, 2012 11:39 AM  

Probably. But a good Editor would make his writer back it up. I know from experience.

Anonymous JazzyB June 21, 2012 11:39 AM  

-- Far as I can tell they are a source of distraction that drains productivity and causes traffic accidents. Oh, and they provide more convenient access to porn. Yaaay, improved standard of living!

That could be your opinion, but that is a technological advance, in any case, whose effects on productivity and communication will not be visible to you initially. You should know that a lot of people did not like the steam engine when first introduced. So was the case with computers. You are not an exception.

Anonymous Shild June 21, 2012 11:43 AM  

(Continued)

And then VD comes along and says that protectionist measures can improve for a nation's economy. The implied perspective is that exercise of State power can be a good thing. This flies in the face of my most basic assumptions of my political and economic outlook.

Now, there is a difference between VD point out that tariffs can be good for a country and him actually advocating such an action. Still, I am very resistant to accepting VD's argument because it would require a critical reevaluation of all my assumptions. I imagine that others may experience the same cognitive dissonance when they try to grasp VD's argument.

Anonymous Josh June 21, 2012 11:43 AM  

And yet you didn't mention free trade here.

covered under free markets and no regulations

Anonymous Josh June 21, 2012 11:45 AM  

exactly, shild

if state intrusion into the market is good in this case, aren't there other cases where intrusion would be good?

Anonymous Feh June 21, 2012 11:46 AM  

That could be your opinion, but that is a technological advance, in any case, whose effects on productivity and communication will not be visible to you initially.

The unproven assumption is that all technological advances create an improvement in productivity.

I guarantee you that any office that permits its employees internet access is losing much more productivity than it gains.

Anonymous Salt June 21, 2012 11:47 AM  

The implied perspective is that exercise of State power can be a good thing.

Sure. Can, not necessarily is. Exercise of State power need not be tyrannical.

Anonymous Josh June 21, 2012 11:48 AM  

This attitude is expressed explicitly by Nock in his book Our Enemy, the State, and by Rothbard who asked "Do you hate the State?" It is a basic worldview in which State power is necessarily parasitic, tyrranical, dishonest, and essentially evil.

A-freaking-men.

in the words of ron swanson, is there a non gay way to ask this man to go fishing with me?

Anonymous MeMyselfI June 21, 2012 11:49 AM  

"Why the HELL should our elected representatives decide to improve India and China at our expense? Is that really what we pay them to do? I only vote for people who do what's right for the USA, period."


This is something I've never understood... on the surface it seems like a good argument. But, it is such narrow thinking.

The reason to help poor people in India and China is because it's better than GOING to WAR with them.

If 30 million or so excess Chinese men - for example - don't have jobs and a possible future as middle-class consumers then they will likely, at some point, march through most of Asia tearing the place up. Same for India. Same for most of the middle-east? Same for Africa?

Either premptively fight the next war on the field of monetary and economic policy or fight it with real bullets. Which is better for the U.S.?

Blogger Joshua_D June 21, 2012 11:50 AM  

Shild June 21, 2012 11:36 AM
This attitude is expressed explicitly by Nock in his book Our Enemy, the State, and by Rothbard who asked "Do you hate the State?" It is a basic worldview in which State power is necessarily parasitic, tyrranical, dishonest, and essentially evil.


I think I'm in agreement. However, as a follower of Jesus Christ, I know that this world is imperfect. There will be no utopia here. It seemed that Rothbard knew this too. He at least made comments to the same effect in many lectures I've listened to. "There is no perfection on this side of eternity." I hate sin. But, sin will be with us on this side of eternity.

So, I might think that, in a perfect world, my children would always make good decisions. They wouldn't throw tantrums. They would never run out into the street. They would never ever consider putting their finger on that fracking hot pot sitting on the stove. And, they would be totally free.

Of course, being as how we live in the imperfect real world, I sometimes have to grab them by the arm, give them a spanking for acting like a little terror, and smack their hand away from that fracking hot pot on the stove.

Anonymous JazzyB June 21, 2012 11:51 AM  

I do not think that free-trade with no tariffs is a panacea for everything. Like everything human and invented by humans, free-trade too has its own troubles, no doubt. But, ultimately,lesser tariffs and lesser protectionist regimes have improved the standard of living across the world. I certainly do not see that USA or any country lost out economically in this process. So, I would still go for lesser tariffs with some practical adjustments, on a case-to-case basis. But, theoretically, that does not go against the free-trade argument.

But if the argument is in terms of political power or cultural issues, that is an altogether different thing. Those issues are outside the purview of economic thought.

Anonymous The Gray Man June 21, 2012 11:52 AM  

Josh,

I was once a believer like you--I tried to make free trade work even when I first saw Vox's arguments against it a while back. There must come a point where you are open to growing intellectually--this does not mean what you believe is wrong, but that refusal to consider that there might be errors in your thinking is only hindering yourself. There comes a point when certain ideas are shown to be flawed--in this case we see what the effects of anarchism (of the libertarian variety) and its counterpart--complete free trade-- are destructive to Western society and the freedom we have. Freedom will not exist in a libertarian society--it is a self-destructive force. Anarchism, statelessness, and free trade will ultimately end in less freedom for people like you.

Vox has demonstrated flaws in libertarian thinking. I eagerly await his future "national libertarianism" book. I really think he should drop the term libertarian altogether, it has bad connotations these days that will only further alienate any good ideas he might have from the mainstream.

Even libertarians gave up on holding to the word "liberal".

Anonymous Feh June 21, 2012 11:52 AM  

And to the people who are saying that we should worry about only the USA- thats a political statement, not economics.

The idea that the government is going to make a decision about trade policy based on "pure" economics is simply fatuous.

It is also a prime example of how libertarianism promotes Leftist tyranny by breaking down the existing order and creating chaos and weakness which Leftists exploit to create vicious tyranny.

Who will take over when "free trade" reduces the West's standard of living to that of the Third World? Leftist autocrats, of course.

Anonymous Mark Call June 21, 2012 11:55 AM  

First, you're right, Vox, that -- whatever the reason -- North's effort was no 'fastball'.

But this was a hanging curveball, and easily refuted:

If the free trade doctrine is correct, even partial applications should partially deliver upon its promises.

You, too, know better. As a pilot, so do I.

But even if "free trade doctrine" was 100% correct, (and NAFTA with it)
doing so in a system of dishonest weights and measures (fiat money) would have at least one observed result:

gutting the victim, as fiat dollars get exported en masse, along with productive capacity. And the debtor still remains 'slave to the lender.'

Anonymous RINO June 21, 2012 11:57 AM  

Josh, at some point you have to apply your utopian ideals to the real world.

You just don't get it do you? Private property will end all pollution and immigration problems forever. Everyone will live happily in a one world anarchist utopia. Free trade is good, it has done wonders if you haven't noticed.

Got it? Don't criticize and don't ask questions.

Blogger Joshua_D June 21, 2012 12:00 PM  

RINO June 21, 2012 11:57 AM
Josh, at some point you have to apply your utopian ideals to the real world.

You just don't get it do you? Private property will end all pollution and immigration problems forever. Everyone will live happily in a one world anarchist utopia. Free trade is good, it has done wonders if you haven't noticed.

Got it? Don't criticize and don't ask questions.


Further reinforcement of my belief that I can almost always find something to agree on with anyone. ;)

Anonymous Feh June 21, 2012 12:00 PM  

This is something I've never understood... on the surface it seems like a good argument. But, it is such narrow thinking.

The reason to help poor people in India and China is because it's better than GOING to WAR with them.

If 30 million or so excess Chinese men - for example - don't have jobs and a possible future as middle-class consumers then they will likely, at some point, march through most of Asia tearing the place up. Same for India. Same for most of the middle-east? Same for Africa?

Either premptively fight the next war on the field of monetary and economic policy or fight it with real bullets. Which is better for the U.S.?


That's the stupidest argument I've ever heard -- and it is self-refuting!

Poor countries cannot go to war with Western powers (absent some third party who arms them, like the former USSR) because they lack the means to do so. The more impoverished they are, the less ability they have to project power outside their borders. Sub-saharan Africa is ZERO military threat to anybody for precisely this reason.

The only reason China has been increasingly regarded as a possible military threat is they have increasingly had the money to acquire advanced hardware. If we consider them a future threat, then the best thing to do is to IMPOVERISH them, not enrich them through free trade.

Anonymous The Gray Man June 21, 2012 12:02 PM  

Feh June 21, 2012 11:52 AM
And to the people who are saying that we should worry about only the USA- thats a political statement, not economics.

The idea that the government is going to make a decision about trade policy based on "pure" economics is simply fatuous.

It is also a prime example of how libertarianism promotes Leftist tyranny by breaking down the existing order and creating chaos and weakness which Leftists exploit to create vicious tyranny.

Who will take over when "free trade" reduces the West's standard of living to that of the Third World? Leftist autocrats, of course.


This is one of the best comments I have ever read. There is a point where libertarianism completely breaks down and creates a social order (or lack thereof) ripe for destruction by Communists and third-world masses that do not give a damn about freedom, liberty, or tradition.

Blogger Vox June 21, 2012 12:05 PM  

The reason to help poor people in India and China is because it's better than GOING to WAR with them.

Really? It's worth sacrificing 75 percent of your standard of living? And despite not trading with China for most of human history, the USA has never gone to war with it. You're indulging in rhetoric, you're not actually thinking through what you're saying.

But if the argument is in terms of political power or cultural issues, that is an altogether different thing. Those issues are outside the purview of economic thought.

Precisely. You can't argue war or guns and badges, then complain when other people talk about crime and culture.

Anonymous MeMyselfI June 21, 2012 12:07 PM  

"If we consider them a future threat, then the best thing to do is to IMPOVERISH them, not enrich them through free trade."

9/11/01 says otherwise.

Widely available N-B-C weapons say otherwise.

Give the impoverished a middle-class a future to lose and they might think twice about making trouble. Leave them in poverty and they have nothing to lose. Desperation breeds desperation.

And, think about the numbers: 30 *MILLION* excess Chinese men. No women in their future, no middle-class outlook. What are we going to do - nuke them? Not likely. It would be like a plague of locusts if they were unleashed on the region. Even if we did not participate in such a war directly it would still effect us. If we can prevent it at lower cost, why wouldn't we?

Anonymous Josh June 21, 2012 12:08 PM  

There is a point where libertarianism completely breaks down and creates a social order (or lack thereof) ripe for destruction by Communists and third-world masses that do not give a damn about freedom, liberty, or tradition.

so you're saying that the state upholds social order?

Anonymous Josh June 21, 2012 12:10 PM  

Anyone wanna guess Germany's biggest trading partner in 1939-1940?

France.

1941?

Russia.

Obviously trade does not prevent war.

Anonymous Shild June 21, 2012 12:10 PM  

VD, I'm not clear on something.

Are you criticising the free trade theory as a matter of academic interest, or are you actually advocating a national protectionist policy?

Anonymous patrick kelly June 21, 2012 12:18 PM  

I lost interest in much of anything Mr. North has to say after listening to about 5 minutes of his Y2K shtick in 1999 on Coast to Coast (IIRC).

Free trade would work great if we didn't live in a fallen world full of fallen men. Wouldn't need government either. Ifs, skiffs, boat rides, unicorns, flying pigs... meh....

Anonymous Feh June 21, 2012 12:20 PM  

"If we consider them a future threat, then the best thing to do is to IMPOVERISH them, not enrich them through free trade."

9/11/01 says otherwise.

Widely available N-B-C weapons say otherwise.


Nope. Not merely stupid, but LMAO stupid. 9/11 did not emerge from "poverty". NBC weapons require great wealth to create (the "poor" countries with such weapons had significant outside help).

Give the impoverished a middle-class a future to lose and they might think twice about making trouble. Leave them in poverty and they have nothing to lose. Desperation breeds desperation.

If they are desperately poor and stay in their squalid hellholes, who cares about their desperation? They can cannibalize themselves but they can't affect us.

And, think about the numbers: 30 *MILLION* excess Chinese men. No women in their future, no middle-class outlook. What are we going to do - nuke them? Not likely. It would be like a plague of locusts if they were unleashed on the region.

So what? That's China's problem, not ours. And if China goes on a rampage, yeah, nuclear weapons are certainly on the table.

Even if we did not participate in such a war directly it would still effect us. If we can prevent it at lower cost, why wouldn't we?

The Great Leap Forward and Cultural Revolution did not affect us AT ALL.

Poverty and strife in Africa does not affect us AT ALL.

Since the premise that poverty will lead to a war of desperation is false, the conclusion that we need to spend money to prevent it is also false, and also should be rejected out of hand.

Anonymous MeMyselfI June 21, 2012 12:20 PM  

It's in our own interests to get the rest of the world a solid middle-class that isn't easily discarded by nationalistic ferver.

1939 was created because we *impoverished* Germany after WWI. Yep, that fixed everything. Impoverishing a potential enemy eliminated their potential to make war against us.

The marshall plan after WWII got it right. Look what we have today.

We've got to do better than narcasism for economic policy.

Anonymous RINO June 21, 2012 12:24 PM  

I lost interest in much of anything Mr. North has to say after listening to about 5 minutes of his Y2K shtick in 1999 on Coast to Coast (IIRC).

Wow they were doing that shtick back then too? I actually shouldn't be surprised as they have continued to make a living off that stuff for years.

Anonymous The Gray Man June 21, 2012 12:28 PM  

Josh
so you're saying that the state upholds social order?

The social order creates the state out of traditions and shared cultural norms. At some point the state will be used to destroy those traditions and norms (as we have seen in America). Now the only way to begin to preserve what used to exist is through the State.

A point like this was even conceded by Mises in Human Action. He reached a point where he saw the Communist threat as so dangerous that if total war were declared on the West, and it looked like the West might lose, he would even support conscription and the draft to make sure that Western society and freedom was preserved.

Anonymous patrick kelly June 21, 2012 12:37 PM  

"...Y2K shtick in 1999 on Coast to Coast (IIRC).

Wow they were doing that shtick back then too? I actually shouldn't be surprised as they have continued to make a living off that stuff for years."

Yeah, the year before 2000, Y2K? And when much of what was predicted didn't happen the shtick became somehow explaining that the world had actually ended but there was a massive cover-up, yuck yuck..... (I read it in The Onion)

Anonymous Fatso McGraw June 21, 2012 12:38 PM  

MeMyselfI: "9/11/01 says otherwise."

You realize that most of the hijackers were actually middle class men, right? Financed by an extremely wealthy guy, right? Poverty was not the reason for 9/11.

Anonymous The Gray Man June 21, 2012 12:39 PM  

I remember hearing the Y2K thing was very "hush hush" and cover up, only to discover that the problem had been identified many, many years before, companies had already spent money fixing the computers that would mess up, and that it really was nothing of major consequence in the long run.

Blogger Nate June 21, 2012 12:42 PM  

"covered under free markets and no regulations"

And what happens when Nation B puts massive tarrifs on your exports?

Anonymous Josh June 21, 2012 12:45 PM  

The social order creates the state out of traditions and shared cultural norms. At some point the state will be used to destroy those traditions and norms (as we have seen in America). Now the only way to begin to preserve what used to exist is through the State.

so the same state that is waging war against tradition and culture will magically be able to reverse course and defend it?

Anonymous Josh June 21, 2012 12:47 PM  

And what happens when Nation B puts massive tarrifs on your exports?

well, in the utopian world there would be no regulations by any governments...or really any governments actually powerful enough to impose them...

Anonymous cheddarman June 21, 2012 12:50 PM  

I would like to see Vox write up an article on this, complete with charts, graphs, etc, and submit it to LewRockwell.com

sincerely

cheddarman

Anonymous Boetain June 21, 2012 12:50 PM  

Vox: "While one can shift the argument from GDP to household assets, that doesn't change the fact that the debt figures demonstrate that the GDP-based argument for free trade is an illusory one."

First, the measure should be household wealth, not assets. Second, I know you like to throw government debt into the equation, but that is dishonest unless you also include government assets. So let's keep it simple and I will prove your case statistically for you (i am sure you will give me credit in your book on free trade that I hope you will write).

Household wealth per capita in 1960 was about $7,000. Let's put that in terms of something real such as gold. Gold was $35 per ounce, so that gives a 1960 wealth figure of 200 oz Au/capita.

The current figures are $200,000 wealth divided by $1600 per ounce gives 2012 wealth figure of 125 oz Au/capita.

So, you could say wealth has declined 38 percent under the quasi free trade regime. Someone could counter with year 2000 wealth figures which would be much higher due to the low price of gold then. You could then use your volatility argument to show wealth is lower AND more volatile under free trade.

There you go, this free trader just made the reduced wealth case for you. Your welcome in advance.

Blogger Vox June 21, 2012 12:51 PM  

9/11/01 says otherwise.

No, it doesn't. The USA was trading with Saudi Arabia for decades prior to 9/11. And there is zero evidence that trade precludes war, much less wealth. In fact, there is considerable evidence that wealth comes from war, as in the case of Rome, the British Empire, and post-WWII America.

Anonymous The Gray Man June 21, 2012 12:52 PM  

Josh
so the same state that is waging war against tradition and culture will magically be able to reverse course and defend it?

Not magically. It requires new people with the willpower to do such a thing. These types of cultural shifts have happened before. Look at the Federalists who undermined John Adams in the late 1700s, then Thomas Jefferson's administration reversing much of that.

The French Revolution and Napoleon.

The Weimar Republic and the National Socialists.

History is rife with examples.

Blogger Vox June 21, 2012 12:53 PM  

Your welcome in advance.

Ah, thanks....

Blogger Vox June 21, 2012 12:55 PM  

Are you criticising the free trade theory as a matter of academic interest, or are you actually advocating a national protectionist policy?

I'm just criticizing it at this point. I have by no means finished thinking the matter through.

Anonymous The Gray Man June 21, 2012 12:56 PM  

Josh
well, in the utopian world there would be no regulations by any governments...or really any governments actually powerful enough to impose them...

This sort of society will never, ever exist. That means you are holding to an idea that cannot ever have place in reality--thus it is stupid to try to convince people of it's worthwhileness. We aren't discussing the afterlife or achiving some metaphysical state of bliss, we are only discussing tangible material things. One of these being that states will always exist. You are stuck with this "terrible evil", so stop calling it unjustified, all you are doing is making yourself appear unliked by anyone who isn't also a libertarian.

I'm not trying to rag on you but your posts are a perfect example of why libertarians cannot wield nation-wide influence and continually lose elections.

Anonymous Josh June 21, 2012 12:56 PM  

In fact, there is considerable evidence that wealth comes from war, as in the case of Rome, the British Empire, and post-WWII America.

only if your gains are greater than the amount spent to fight the war, and on a global scale, it's still a net loss...

but of course we're talking about national, not global, economies.

Anonymous James Dixon June 21, 2012 12:58 PM  

> ...by which I mean the removal of tariffs on imported goods...

A useful qualifier, as it should be obvious that governments may choose to impose export fees or tariffs.

> Why the HELL should our elected representatives decide to improve India and China at our expense?

Oh, how quaint. Someone who thinks our elected representatives actually represent us.

You're absolutely correct, of course, but the question answers itself when viewed in the proper context.

> I only vote for people who do what's right for the USA, period.

Yeah. A shame there aren't many of those on the ballot. :(

Blogger The Anti-Gnostic June 21, 2012 12:59 PM  

Vox - there's a reason the Mises Institute keeps Gary at a polite distance.

Buried deep somewhere in some Austrian school essay, I recall reading the statement, "Imports must ultimately be paid by exports." I forget who wrote it. Anyoo, I posted that on one of the comment threads several years back and Bob Murphy abruptly came swooping in for a look.

I think Bob Murphy has done some more thinking on trade deficits and refined his view, but I'm too lazy to check.

Anonymous Josh June 21, 2012 1:01 PM  

One of these being that states will always exist. You are stuck with this "terrible evil", so stop calling it unjustified, all you are doing is making yourself appear unliked by anyone who isn't also a libertarian.

murder, theft, etc will always exist, should people stop calling them unjustified?

Anonymous unger June 21, 2012 1:05 PM  

The only reason the people have to move in the first place is because their jobs disappeared, in many cases due to the fact that their neighbor no longer has to buy x from a local supplier, but can obtain it from a foreign supplier. The very doctrine of free trade is predicated on capital and labor moving to where they are most valued.

It's really quite inhuman and totally antithetical to all cultural, traditional, and non-economic values when viewed accurately. If the USA adopted genuine free trade, millions of Americans would either have to move abroad or adopt a permanently lower standard of living every year.


You say this like people have a right to their customers' continued patronage and a right to a given income, and your definition of 'bad for Americans' is predicated entirely upon those supposed rights. North, on the other hand, does not have an entitlement complex, which is why he's able to think clearly. The correct response to 'millions of Americans would have to adopt a permanently [why? 'permanently' is a long time] lower standard of living' is: So what? And you know this, or at least have no excuse not to know it, since the tagline at the bottom of this page reads: "Success comes most swiftly and completely not to the greatest or perhaps even to the ablest men, but to those whose gifts are most completely in harmony with the taste of their times." You put it there, did you not? Wherefore, then, the bawling over those whose gifts do not change with the times? Seems like you've got one theory for weekdays and another for Sunday.

Blogger Nate June 21, 2012 1:08 PM  

"well, in the utopian world there would be no regulations by any governments...or really any governments actually powerful enough to impose them..."

Oooo!

I can play this game too... how about we invent these machines that take base elements and magically create anything. you ask for it... it makes it. instantly. and when ever you through something away or take a crap or whatever.. it goes back to the machines and they change it back to base elements to be used as future do-dads!!!

Anonymous Josh June 21, 2012 1:10 PM  

The French Revolution and Napoleon.The Weimar Republic and the National Socialists.History is rife with examples.

Yes, I forgot about the massive flowering of human freedom and liberty under those regimes...

Your arguments can effectively be ignored now.

Blogger Joshua_D June 21, 2012 1:13 PM  

Josh June 21, 2012 1:01 PM
murder, theft, etc will always exist, should people stop calling them unjustified?


No. However, you also shouldn't structure your (either private or state-controlled)under the assumption that those things do not exist.

Josh, are you really civilServant in disguise?

Anonymous VD June 21, 2012 1:14 PM  

The correct response to 'millions of Americans would have to adopt a permanently [why? 'permanently' is a long time] lower standard of living' is: So what?

To which the correct response is: go fuck yourself, you worthless citizen of the world. This is where I part company with the so-called libertarians who are, in the end, utopian globalists cut out of the same cloth as the communists and EU fascists. It's not an accident that Karl Marx supported free trade too.

[G]enerally speaking, the Protective system in these days is conservative, while the Free Trade system works destructively. It breaks up old nationalities and carries antagonism of proletariat and bourgeoisie to the uttermost point. In a word, the Free Trade system hastens the Social Revolution. In this revolutionary sense alone, gentlemen, I am in favor of Free Trade.

Free trade is no different than climate change and every other globalist pseudo-science. It's only being pushed in order to erect the single world government and is ultimately antithetical to freedom.

Blogger tz June 21, 2012 1:14 PM  

Excellent. Though there may be some kind of logical proof of theoretical free trade, it requires conditions which don't exist, much like Newton's laws don't work as nicely if there is friction. If there was a fixed pile of gold in two trading partners, and one diminished and the other increased, the inflation/deflation should tend toward equilibrium.

Instead we have fractional reserve banking where the fraction gets smaller and other forms of debt until something blows up and the account entries snap back violently to the size of the actual piles.

North supporting debt sounds more like Krugman than Mises. The mortgage means he does not own his house - at least if the house itself is pledged as collateral. He will have only the equity of the house, whatever is leftover at whatever firesale market price applies. He can feel wealthier, but it is the same illusion as fractional reserve banking. He who dies with the most unpaid debts wins?

Blogger Joshua_D June 21, 2012 1:15 PM  

... structure your (either private or state-controlled) judicial system...

Anonymous Josh June 21, 2012 1:15 PM  

for the record, in reality, I do favor mirror image trade laws, which would, I think, gradually result in lower tariffs and increased trade...

I don't think that any free traders blindly support opening us markets without opening up foreign ones

Anonymous The Gray Man June 21, 2012 1:18 PM  

Josh
murder, theft, etc will always exist, should people stop calling them unjustified?

You just admitted yourself that they will never be eliminated, which is your ultimate goal in talking about the unjustification of the state. No one believes murder and theft will be eliminated, so no one walks around saying they need to be.

Do you see the disconnect that you're making?

If I advocate less murders and seek policies and changes (be they government or society in general) that will prevent murder, that is a good thing from my pro-liberty and life saving point of view.

Likewise, if I advocate smaller government and less intrusion on liberty, I will seek out policies and changes that result in that.

In neither situation am I going to run around saying "MURDER IS UNJUST, IT MUST BE ELIMINATED". People will look at me like an idiot, much the way people look at libertarians who constantly nag on and on about the state. I know this because for years I was one of them. People who are not libertarians do not want to hear what you have to say, and think less of you for it.

When I stopped talking about this sort of thing and started to change my mind, I realized people are far more open to your opinion on politics, even going so far as seeking it out.

Anonymous Josh June 21, 2012 1:18 PM  

Josh, are you really civilServant in disguise?

well now I'm offended

Anonymous unger June 21, 2012 1:21 PM  

It's not an accident that Karl Marx supported free trade too.

So much for not resorting to genetic fallacies, eh?

At any rate, 'go fuck yourself, you worthless citizen of the world' is not a valid reply. You're claiming that people are entitled to an income stream, and its protection by force of arms. (Hey, guess who else has some Marx in him?) It's hardly unreasonable to insist that you defend this rather extraordinary claim.

Anonymous Scintan June 21, 2012 1:22 PM  

Yes, I forgot about the massive flowering of human freedom and liberty under those regimes...

Your arguments can effectively be ignored now.


Are you blind to the irony in this post of yours?

Anonymous Josh June 21, 2012 1:22 PM  

If there was a fixed pile of gold in two trading partners, and one diminished and the other increased, the inflation/deflation should tend toward equilibrium.

that's my a argument

Anonymous The Gray Man June 21, 2012 1:23 PM  

Josh
Yes, I forgot about the massive flowering of human freedom and liberty under those regimes...

Your arguments can effectively be ignored now.


I was discussing changes in society through government, not whether they achieved great beacons of freedom and liberty.

That said, what life was like for most people in both Germany and France in the last two examples was much better. Hitler and Napoleon both set out with clear goals in mind, and both made their people better off for a time than they would have been otherwise under the terrible systems of corrupt government they had previously.

I am in no way holding them as a great example of freedom, but showing how society was more or less "saved" by their influence for a time.

I also notice you left out my example of Jefferson undermining Hamilton's Federalism which nearly drove this country to war with France and eliminated our national debt, among other things.

Blogger The Anti-Gnostic June 21, 2012 1:24 PM  

unger, here is what you're missing: people also have a right (and a desire) to band together for mutual benefit to mitigate the vagaries of commerce. That's why they form marriages, and from there families, and from families tribes, and from tribes nations. While it is true that no nation can do economically what no family and even no individual can do, the nation's tax structure, currency, etc., are now all part of the mix and the Austrians should account for them.

Anonymous Josh June 21, 2012 1:24 PM  

Are you blind to the irony in this post of yours?

I'm not the one arguing that hitler is an example of using state power to advance liberty

Anonymous Stilicho June 21, 2012 1:26 PM  

There are two counteracting forces here. Standards of living would converge around the world, yes, which means our standard would go down. But capital and labor being put to their most productive uses would increase real wealth and raise standards of living. I’m not sure which of these would be the stronger force.

You are correct. But you should be sure. Do the math and set aside the debt issues. Small group of around 600 million at 50k/capita per year, large group of 6.4 billion at 3k/capita per year. The average is 7k/capita. So even if global wealth doubles over the next 50 years thanks to free trade, the West's standard of living will have to fall to about a quarter of what it is now.

Throw in the near total destruction of the nations of the world and that's the future you're advocating if you're a free trader.


Ah, but think of the enormous increase in your personal standard of living if you could profit from the redistribution of capital and labor and the subsequent "norming" of world-wide living standards...that's quite an incentive to move your capital from the West to less developed countries if you can profit from the massive increase in living standards there or even the net overall increase.

Anonymous VD June 21, 2012 1:26 PM  

You're claiming that people are entitled to an income stream, and its protection by force of arms.

Yes, that's what nations do. You have no loyalty to anything beyond yourself, and no one need have any loyalty to you. With your logic, no one should offer you any protection at all and can take what you have if it pleases them. In other words, you're a simple barbarian.

It is beyond stupid to claim that nationalism is Marxist. Marxism is specifically anti-nationalist, which is precisely why it is pro-free trade.

Anonymous Scintan June 21, 2012 1:28 PM  

Are you blind to the irony in this post of yours?

I'm not the one arguing that hitler is an example of using state power to advance liberty


No, you're the one deliberately twisting what was posted in an effort to dismiss an argument you've been unable to successfully refute.

Anonymous Josh June 21, 2012 1:31 PM  

I was discussing changes in society through government, not whether they achieved great beacons of freedom and liberty.

to the extent that government changes culture, it will almost always change it to one of less freedom and more government.

even jefferson was just a road bump on the hamiltonian march towards more and bigger government.

Anonymous RINO June 21, 2012 1:31 PM  

Free trade is no different than climate change and every other globalist pseudo-science. It's only being pushed in order to erect the single world government and is ultimately antithetical to freedom.

They always complain about the global elite. The global elite is pretty gung-ho about free trade. I'm curious as to if that ever makes them stop and wonder.

Blogger The Anti-Gnostic June 21, 2012 1:33 PM  

You're claiming that people are entitled to an income stream, and its protection by force of arms.

Whether you're anti-entitlement argument is valid (and I think that's debatable), it is completely beside the point. People DESIRE an income stream and will resort to force of arms to protect it. For most, the motivation is to see their children and children's children get to keep the same high living standards rather than having them equalize globally to the level of the Hutus and Tutsis.

Now, I wish all the best in the world to the Hutus and Tutsis. But if it's Them or Us, I'm sticking with Us.

Blogger Dan Hewitt June 21, 2012 1:39 PM  

Yes, that's what nations do. You have no loyalty to anything beyond yourself, and no one need have any loyalty to you. With your logic, no one should offer you any protection at all and can take what you have if it pleases them. In other words, you're a simple barbarian.

Is the non-agression priciple really that difficult to grasp?

Anonymous Stilicho June 21, 2012 1:39 PM  

If 30 million or so excess Chinese men - for example - don't have jobs and a possible future as middle-class consumers then they will likely, at some point, march through most of Asia tearing the place up. Same for India. Same for most of the middle-east? Same for Africa?

Once you start paying the Danegeld, you never get rid of the Dane.

Anonymous Josh June 21, 2012 1:40 PM  

No, you're the one deliberately twisting what was posted in an effort to dismiss an argument you've been unable to successfully refute.

His original argument was that libertarianism (less government) threatens the social order...which leads to less liberty...

so...one concludes that government creates social order that values liberty...

even though governments throughout history almost always decrease liberty...

Anonymous WaterBoy June 21, 2012 1:42 PM  

Josh: "well, in the utopian world there would be no regulations by any governments...or really any governments actually powerful enough to impose them..."

Depends on whose idea of Utopia is implemented. The other version -- one world government, one economy -- is the other, and far more likely to actually occur. The Free Trade ideal could be applied to either one.

Nate: "how about we invent these machines that take base elements and magically create anything. you ask for it... it makes it. instantly"

One world government...no trade, because machines magically create everything...throw in no currency, and you have Star Trek Economics.

Anonymous VD June 21, 2012 1:46 PM  

Is the non-agression priciple really that difficult to grasp?

No harder than rainbow-farting unicorns. It's a reasonable personal principle, it is not a reasonable one for nations.

Anonymous Josh June 21, 2012 1:46 PM  

It is beyond stupid to claim that nationalism is Marxist. Marxism is specifically anti-nationalist, which is precisely why it is pro-free trade.

my only issue with nationalism is why, as a southerner, should be forced to give a damn about the north and the west coast, even though we're supposedly one nation?

Anonymous Josh June 21, 2012 1:48 PM  

No harder than rainbow-farting unicorns. It's a reasonable personal principle, it is not a reasonable one for nations.

why not?

Anonymous WaterBoy June 21, 2012 1:52 PM  

Josh: "why not?"

Because it isn't reciprocal.

Anonymous Josh June 21, 2012 1:56 PM  

Because it isn't reciprocal.

you leave me alone, and I leave you alone

you attack me, and I kick your ass

looks reciprocal to me

Anonymous Shild June 21, 2012 1:56 PM  

Yes, that's what nations do. You have no loyalty to anything beyond yourself, and no one need have any loyalty to you. With your logic, no one should offer you any protection at all and can take what you have if it pleases them. In other words, you're a simple barbarian.

It is beyond stupid to claim that nationalism is Marxist. Marxism is specifically anti-nationalist, which is precisely why it is pro-free trade.


This nationalist talk sounds odd coming from an expat.

Anonymous Scintan June 21, 2012 1:59 PM  

His original argument was that libertarianism (less government) threatens the social order...which leads to less liberty...

so...one concludes that government creates social order that values liberty...

even though governments throughout history almost always decrease liberty...


His original argument doesn't justify you taking his subsequent posts and deliberately distorting them and lying about them.

Again, how can you not see the irony in your posts?

Anonymous jSinSaTx June 21, 2012 1:59 PM  

""If we consider them a future threat, then the best thing to do is to IMPOVERISH them, not enrich them through free trade."

9/11/01 says otherwise.

Widely available N-B-C weapons say otherwise.

Give the impoverished a middle-class a future to lose and they might think twice about making trouble. Leave them in poverty and they have nothing to lose. Desperation breeds desperation.

And, think about the numbers: 30 *MILLION* excess Chinese men. No women in their future, no middle-class outlook. What are we going to do - nuke them? Not likely. It would be like a plague of locusts if they were unleashed on the region. Even if we did not participate in such a war directly it would still effect us. If we can prevent it at lower cost, why wouldn't we?"

This is as much an argument for Bush's preemptive war and nation building doctrine as free trade.

Anonymous unger June 21, 2012 2:02 PM  

@VD: I didn't claim that nationalism was Marxist. But 'from each according to his ability, to each according to his need' certainly is - and it is nothing if not a statement of entitlement, just like your statement of entitlement.

As for the rest...

@Anti-Gnostic: So, communities and nations have the same standing as marriage - 'what God hath joined, let man not put asunder'? No. Marriage may be a sacrament, 'till death do you part'; communities are not.

I must clarify one thing. I do not deny that shifting patterns of trade can gut communities. Neither do I say that people have no moral obligation to their neighbors, no need to consider the possible long-term consequences of their behavior, quite including their business transactions.

But.

That does not mean that people have enforceable rights to their standards of living. It is one of the harsh realities of the world that there are three and only three ways of getting something you want: producing it with your own two hands, producing something someone else wants and trading it for a thing he has made, and taking it from someone else by force. Until you've done one of the three, a thing is not yours in any sense at all; unless you've done one of the first two, a thing is not yours by right. And if you attempt the second, and are rebuffed - even for bad reasons - it just doesn't give you license for the third.

...as for the rest: yes, people 'will' resort to force of arms to protect their income streams. But the question was whether they 'should'. Nobody ever said it was always easy or pleasant to do what is right at the cost of worldly success. Which is why when the resident 'superintelligence' accuses me of being 'a citizen of the world', I say it is he who is the real citizen of the world. As Mencken once wrote:

When the control of Christendom passed from kings and priests to pawnbrokers and note-shavers it was a step downward, if only because kings and priests and nobles cherished concepts of professional honor, which are always as incomprehensible to pawnbrokers and note-shavers, i.e., to the bankers who now rule us, as they would be to pickpockets and policemen. There were things that a king would not do, even to shake down the faithful for a good collection; there were things that a noble would not do, even to save his life. But there is absolutely nothing that a banker will not do to augment his products, short of going to jail.

Anonymous Yeah June 21, 2012 2:05 PM  

This is as much an argument for Bush's preemptive war and nation building doctrine as free trade.

Yeah, as if "invade the world, invite the world" wasn't bad enough, now we gotta "enrich the world" as well.

Blogger Dan Hewitt June 21, 2012 2:07 PM  

This nationalist talk sounds odd coming from an expat.

Also, this unlibertarian talk sounds strange coming from a libertarian.

Anonymous Chad June 21, 2012 2:09 PM  

I would have to say I reject Vox's assertions outright. I find that the arguments for the pressures exhibited by free trade to be mistaken as the conditions for its existence. Granted, the ideal preference is for capital and labor to meet at the most favorable loactions, but economic conditions adapt for capital and labor of varying mobility.

To illustrate this point lets invoke the backbone of economic arguments, space aliens. Lets suppose aliens engaged us in trade, but the atmosphere on their planet is toxic to humans and they can't survive in our atmosphere. To facilitate the exchange of goods they employ a warpgate. Let's say the beings can produce advanced technology at prices that Earth industry couldn't hope to compete with. What they ask for in exchange for all this is raw materials lumber, steel, etc. Notice that in these conditions 1) displaced manufacturing sector workers cannot relocate to the alien planet 2) alien capital is not relocating onto Earth. Is there an obstacle to engaging in free trade with the alen race?

My answer is no. The manufacturing sector on Earth will be wiped out, but the standard of living would increse due to more favorable returns on raw material production. Hence free trade will have benefited both parties (except those with vested interests in Earth manufactures) without the need for production capital or labour flow to or from the alien planet.

The problems Vox has laid out in his argument against free trade contain nothing that isn't easily explained by the effects of using fiat currency in a system of credit expansion. You might notice Vox's arguments require him to invoke credit problems. But if the use of credit is the problem, how is owing $200 to a domestic supplier preferable to owing $125 to a foreign supplier for comparable goods?

Anonymous VD June 21, 2012 2:09 PM  

my only issue with nationalism is why, as a southerner, should be forced to give a damn about the north and the west coast, even though we're supposedly one nation?

America is not a nation by definition. America is a union. That is why America will break up. Germany reunited because it was one nation despite being two different states. Czechoslovakia broke up because it was two nations in one state.

...as for the rest: yes, people 'will' resort to force of arms to protect their income streams. But the question was whether they 'should'. Nobody ever said it was always easy or pleasant to do what is right at the cost of worldly success. Which is why when the resident 'superintelligence' accuses me of being 'a citizen of the world', I say it is he who is the real citizen of the world.

I didn't accuse you of being a citizen of the world. I accused you of being a barbarian. Which is what you are. You're no more civilized than the cave man, grunting about what is his. And babbling about "what is right" has nothing to do with the current discussion of whether free trade benefits or harms nations.

Anonymous Stilicho June 21, 2012 2:15 PM  

@Unger

Dude, your Mencken quote supports Vox's point, not yours. Next up: are you going to tell us that labor determines value?

Anonymous WaterBoy June 21, 2012 2:15 PM  

Josh: "you leave me alone, and I leave you alone"

I don't see how pro-active economic protection is attacking anyone. A foreign company has no more right to an income stream than a US citizen does, to put it in the original terms.

Anonymous Scintan June 21, 2012 2:15 PM  

This nationalist talk sounds odd coming from an expat.

Also, this unlibertarian talk sounds strange coming from a libertarian.


Call me when Libertarian thought is monolithic.

Anonymous Josh June 21, 2012 2:21 PM  

America is not a nation by definition. America is a union. 

now, as a southerner, why should I care that companies like gm and ford do well instead of foreign companies like nissan, which actually has its american headquarters in my town?

and..as a side note, the more I think about it the more it seems that the ones who benefit the most from free trade are multinational corporations because of lower supply costs...

Anonymous James Dixon June 21, 2012 2:28 PM  

> ...the more I think about it the more it seems that the ones who benefit the most from free trade are multinational corporations because of lower supply costs...

Josh, and I hate to say this, but are you just now figuring that out?

That's been obvious for at least 20 years now.

Anonymous Josh June 21, 2012 2:33 PM  

Josh, and I hate to say this, but are you just now figuring that out?That's been obvious for at least 20 years now.

no, but I had assumed that the savings would result in lower costs to the consumers ultimately, which is generally how three economic theory goes

but, aside from favoring mirror image trade laws, I hadn't really states to rethink free trade until vox starting hammering it

Blogger Nate June 21, 2012 2:34 PM  

"It's a reasonable personal principle, it is not a reasonable one for nations."

And yet there stands Switzerland.

now... wear are those rainbow farting unicorns?

Blogger Nate June 21, 2012 2:34 PM  

WHERE dammit. GAH

Blogger Nate June 21, 2012 2:35 PM  

"I didn't accuse you of being a citizen of the world. I accused you of being a barbarian. Which is what you are."

Anarchists are not necessarily Barbarians.

Anonymous Yorzhik June 21, 2012 2:38 PM  

You make such a convincing case.

Perhaps next time the topic comes up I'll give it a go. When a thread gets up to 200 comments in such a short time, it's not fair to you to expect a quality discussion.

Anonymous Shild June 21, 2012 2:41 PM  

"I didn't accuse you of being a citizen of the world. I accused you of being a barbarian. Which is what you are."

Anarchists are not necessarily Barbarians.


I kind of figured they would consider it a compliment.

Blogger The Anti-Gnostic June 21, 2012 2:42 PM  

The NAP breaks down because a bleeding-heart Swiss may shelter, completely voluntarily, a Yemeni refugees in his home. The Swiss state authorities will then enter the home, by force if necessary, and put the refugee on the next plane out. The good of the Swiss nation has been preserved; the rights of the Swiss bleeding-heart have been sacrificed for the national interest.

Anonymous Josh June 21, 2012 2:45 PM  

now... wear are those rainbow farting unicorns?

riding to dc to save obama care

Anonymous WaterBoy June 21, 2012 2:48 PM  

Nate: "And yet there stands Switzerland."

In the context of tariffs being considered economic aggression (as was originally intimated), it is just as aggressive as other nations (at least, to non-EU members).

Anonymous Josh June 21, 2012 2:48 PM  

The NAP breaks down because a bleeding-heart Swiss may shelter, completely voluntarily, a Yemeni refugees in his home. The Swiss state authorities will then enter the home, by force if necessary, and put the refugee on the next plane out. The good of the Swiss nation has been preserved; the rights of the Swiss bleeding-heart have been sacrificed for the national interest.

in this example aggression would have been committed first by the yemeni inn violating the swiss border

Anonymous John June 21, 2012 2:49 PM  

And thus we see how the extremes of Austrian theory begin to take on the quality of dogma. Painfully ironic that a man can prattle on for hours about the "Doctrine of Liberty" while at the same time condemning Marxists for their quasi-religious devotion to Central Planning.

Blogger Nate June 21, 2012 2:51 PM  

"In the context of tariffs being considered economic aggression (as was originally intimated), it is just as aggressive as other nations (at least, to non-EU members)."

That context of aggression is profoundly stupid... and I will not be addressing it.. any more than I would address those that claim that suggesting association with nations or religions are somehow also practicing violence/aggression.

Anonymous Stilicho June 21, 2012 2:51 PM  

now... wear are those rainbow farting unicorns?

I observed a rainbow recently. However, since I cannot show that there was also a virgin nearby, the evidence for your unicorn must remain inconclusive.

Blogger The Anti-Gnostic June 21, 2012 2:57 PM  

in this example aggression would have been committed first by the yemeni inn violating the swiss border

I can hear the howling all the way from Reason Magazine that borders aren't visible from space.

The thorny question is what does or does not violate the NAP, and the answers are as many as there are people with viewpoints. It's a nice first principle but really too facile and reductionist. Otherwise, we'd just type it on the first page of the penal code and leave it at that.

Anonymous WaterBoy June 21, 2012 3:13 PM  

Nate: "That context of aggression is profoundly stupid... and I will not be addressing it.."

Then why bring Switzerland into it? The discussion was about economic protection, not national defense...and Switzerland imposes tariffs, too.

Anonymous unger June 21, 2012 3:16 PM  

@VD:
I didn't accuse you of being a citizen of the world. I accused you of being a barbarian. Which is what you are. You're no more civilized than the cave man, grunting about what is his. And babbling about "what is right" has nothing to do with the current discussion of whether free trade benefits or harms nations.

Um, actually, you did call me 'a citizen of the world'. 1:14 PM. And I can't help but laugh when you, of all people, call me a barbarian. It is precisely the barbarians who have no concept of ownership beyond what can be taken by force, who are led by their bellies instead of moral compunctions. It is only the civilized who respect rights. It is only the civilized who bother to reason about rights. And, of course, it's only the civilized who aren't obviously suffering from Alzheimer's who remember what they wrote a few minutes prior and do not become insufferably belligerent at the drop of a hat.

@Stilicho: How so? The anti-free-trade side is busily counting its coins and hooting about how right and wrong are irrelevant, how only survival and profit matter - that "if it's Them or Us, I'm sticking with Us." If that is not the behavior of 'pawnbrokers and note-shavers' looking to 'augment their products', nothing is.

Anonymous Jay June 21, 2012 3:21 PM  

Hey Vox,

Wouldn't the GDP to debt ratio be even worse without free trade? American produced goods are more expensive, so we'd be borrowing more money to pay for them. Granted, GDP would be higher (since more American goods purchased means more American goods produced), but the interest charged on that debt would offset any gain in GDP.

Am I right on this? If not, where did my thinking go wrong?

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