The ‘Logic’ of Protectionism Leads to an Absurd Conclusion: Complete Self-Sufficiency at the Individual Level

[Separatist]

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Thanks mostly to Donald Trump, but with some able assistance from Bernie Sanders and to a lesser extent Hillary Clinton, there’s been a new revival on the campaign trail of anti-free trade, pro-protectionist trade demagoguery, supplemented with some recycled, outdated, and discredited mercantilism (the belief that a government can make a nation more prosperous by regulating trade and using tariffs and other protective measures to favor domestic industries). It’s therefore a good time to update and recycle a CD post from last year that featured what I think is one of the best and most persuasive arguments against restrictions on trade and trade policies that protect domestic industries from foreign competition in an effort to save or protect domestic jobs, courtesy of economist Walter Block. In his 1975 book Defending the Undefendable (full text available online here via Mises.org) Walter uses an effective reductio ad absurdum approach to expose a major flaw in the position of those like Trump and Sanders who oppose free trade and free trade agreements, and who instead support protectionism and other restrictions on international trade so that foreign countries don’t “steal our jobs.”

The text below is adapted from Chapter 23 (“The Importer”) of Walter’s excellent book in which he defended “the pimp, prostitute, scab, slumlord, libeler, moneylender, and other scapegoats in the rogues’ gallery of American society.” In the original version of the book in 1975, Walter focused on the aggressive advertising campaign of the International Ladies’ Garment Workers’ Union that was being implemented at that time to promote the struggling domestic garment industry against the rising tide of lower-cost imported clothing. I’ve taken the liberty of updating the text below with more contemporary references (emphasis is mine).

The position of many Democrats, Donald Trump, and union organizations like the AFL-CIO is that past trade agreements like NAFTA and the pending Trans-Pacific Partnership trade bill cause American jobs to be lost, displaced, and outsourced to countries like Mexico, Panama and Korea. Presidential candidates Donald Trump, Hillary Clinton and Bernie Sanders have all recently criticized US trade deals and Trump and Sanders have advanced some form of protectionist trade policies as part of their platforms. According to Trump, China is “ripping off” the United States on trade and stealing our jobs. China, Mexico and Japan were identified by Trump as countries where “we are getting absolutely crushed on trade.” Trump has proposed imposing 45% tariffs on Chinese imports and a 35% tariff on Ford cars made in Mexico in an effort to keep jobs in the US.

On a superficial level, protectionist arguments seem plausible. After all, every toy, car, T-shirt, iPhone, or tomato that could have been produced domestically, but was instead imported, represents work that could have been performed by Americans. Certainly, this means less employment for American workers than would otherwise be the case. If the argument was limited to this aspect of trade, the case for the restriction, if not prohibition of imports, would be well-made.

The argument, however, is fallacious, and the consequences to which it logically leads are clearly unsound. The premise which opposes free trade and justifies protectionism on the national level also justifies it on the state level. We shall ignore the political impossibility (unconstitutionality) of one state setting up tariffs between it and other states. This is, after all, irrelevant to the economic argument of the anti-free trade advocates like Trump, Sanders and the AFL-CIO. Theoretically, any one state could justify its policy in exactly the same way that a nation can. For example, the state of Montana could bar imports from other states on the grounds that they represent labor which a Montanan could have been given but was not. A “Buy Montana” program would then be in order. It would be just as illogical and unsound as any “Buy American” campaign.

The argument, however, does not end at the state level. It can, with equal justification, be applied to cities. Consider the importation of a baseball glove into the city of Billings, Montana. The production of this item could have created employment for an inhabitant of Billings, but it did not. Rather, it created jobs, say, for the citizens of Roundup, Montana, where it was manufactured. The city fathers of Billings could take Trump’s anti-trade position and “patriotically” declare a moratorium on trade between the citizens of their city and the foreign economic aggressors in Roundup. This tariff, like those of the larger political subdivisions, would be designed to save the jobs of the citizens and prevent Roundup from stealing jobs away from Billings.

But there is no logical reason to halt the process at the city level. The anti-trade, protectionist thesis can be logically extended to neighborhoods in Billings, or to streets within neighborhoods. “Buy Elm Street” or “Stop Maple Street from stealing our jobs” could become rallying cries for the protectionists. Likewise, the inhabitants of any one block on Elm Street could turn on their neighbors on another block along the street. And even there the argument would not stop. We would have to conclude that it applies even to individuals. For clearly, every time an individual makes a purchase, he is forgoing the manufacture of it himself and outsourcing its production. Every time he buys shoes, a pair of pants, a baseball glove, or a flag, he is creating employment opportunities for someone else and, thereby, foreclosing those of his own. Thus the internal logic of the protectionist argument leads to an insistence upon absolute self-sufficiency, to a total economic interest in forgoing trade with all other people, and self-manufacture of all items necessary for well-being.

Clearly, such a view is absurd. The entire fabric of civilization rests upon mutual support, cooperation, and trade between people. To advocate the cessation of all trade is nonsense, and yet it follows ineluctably from the anti-trade and protectionist positions put forward by Donald Trump. If the argument for the prohibition or restrictions of trade with tariffs and trade barriers at the national level is accepted, there is no logical stopping place at the level of the state, the city, the neighborhood, the street, or the block. The only stopping place is the individual, because the individual is the smallest possible unit. Premises which lead ineluctably to an absurd conclusion are themselves absurd. Thus, however convincing the protectionist, anti-trade arguments advanced by Trump and Sanders might seem on the surface, there is something terribly wrong with them.

MP: Even though Walter’s book is now more than 40 years old, his strong defense of free trade and his complete take-down of trade protectionism above using reductio ad absurdum is as fresh and compelling today as it was in 1975. Especially in this new era of anti-trade demagoguery and hysteria, increasing calls for tariffs and other forms of trade protection, and a troubling trend towards isolationism, it’s a very timely message that deserves more attention.

Q: How convinced are economists as a group of the benefits of free trade in general and the benefits of free trade agreements in particular?

A: Pretty strongly convinced, according to this University of Chicago survey of 42 top economists. In response to the statement “Past major trade deals have benefited most Americans,” 93% of the economic experts agreed (weighted by their confidence on a scale from 1 to 10), and none disagreed (7% were uncertain).

[ajax]

Great application of reductio.

If protectionism makes you better off, apply it all the way down the line: trade barriers ought to be erected between state, counties, cities, municipalities, individuals.

Let the prosperity begin.

[ChristopherABrown]

Defending the Undefendable (full text available online here via Mises.org) Walter uses an effective reductio ad absurdum approach to expose a major flaw in the position of those like Trump and Sanders who oppose free trade and free trade agreements, and who instead support protectionism and other restrictions on international trade so that foreign countries don’t “steal our jobs.”

A form of myopia makes this perspective logical.

And the Trumpster with Bernie missed 1/2 the point.

Firstly, one needs to look at why free trade agreements exist.

Multinational corporations want it to exploit human labor and escape environmental regulations. It was the WTO that created NAFTA and GATT. GATT in China had such a negative effect on one region that techno-junk had to be banned.

GATT and NAFTA have fairly well destroyed the American economy and industrial base.

Global diplomatic destabilization has resulted from free trade while environmental destruction has been made widespread. Nations who are aggressors have been enriched to perhaps use their power against us eventually, while human life has been depreciated yet one more time through exploitation.

The best corporate executives have a mentality that has been defined as sociopathic. They only serve stockholders who have a similar problem based in greed. The long term quality of living things is not observed then acted upon in a majority if situations.

Corporations have no loyalty to the American constitution, and benefit from using their profits to slowly usurp its principles which serve to further enrich them.

All of this exists as if life was about stuff, material existence. The mentality discards concern for future generations and therefore cheapens life and the purpose of it.

The purpose of life is love, not stuff creating convenience and comfort. Corporations in control of media have perverted the American mentality, and expanded that to the world to a degree where environmental toxicity is becoming a real issue in many environments.

Free trade as it's practiced is based in the false economy of oil and actually degrades every thing of value. Life in nature, human life and appreciation of what life is about. This, while reducing actual independence of individuals.

This is not to say that technology is bad or wrong. This says that technology exclusively in the hands of corporations enslaves and dumbs down the people generally. Putting corporations in control of economy, morals and law degrades humanity and all life.

The thread title attemps to engage a cognitive distortion of "all or nothing thinking" to justify itself. The notion of "complete self sufficiency for the individual" is not short of extreme "all or nothing thinking" and is in itself absurd. Therein is an attempt to make the concept of self sufficiency absurd.
We are naturally dependent upon one another, and it is natural that such dependency be within our local sphere. Using petroleum to move goods and resource between disparate economies for the enrichment of unconscious despots serving only comfort and fulfillment of desires at the expense of needs is a very dark endeavor to commit to.

The alternative is to put humanity in control of itself with natural law, for the highest purposes of humanity under Gods doctrine of love.

[2EstablishZion]

Ah, one of the endangered species, a thread on LDSFF worth reading. I'll study it in depth this evening when I have time.

Thanks for posting!