Friday, July 10, 2020

'Free Trade!'s Begging the Question of Economic Causes - Economic Politics vs Political Economy pt7

If you wonder why I'm skeptical of 'Libertarians' as defenders of Individual Rights and Liberty, it might help to keep in mind that these are many of the same folks who, 1), equate Individual Rights with 'Economic Rights!', and 2), have been eager to - even now - engage in 'Free Trade!' with the captive peoples of Communist China, while knowing that Communism permits no manner of private property, freedom, or liberty, to the very people that they foolishly expect to be engaging in a meaningful form of 'Free Trade!' with. The nature of 'liberty' which such 'libertarians' speak of, is and can extend no deeper into their convictions than a pragmatic interest in 'what works' to their momentary gain, and as the very 'principles!' which they utilize to promote & justify 'Free Trade!' with Communist China, involve 'Economic Rights!' that could just as easily be used to justify both the mobster fencing stolen goods and the customer bargaining for goods they know to be stolen, IMHO their conception of 'rights!' and 'principles!' are visibly divorced from any substantive understanding of, or regard for, either individual rights or for the rule of law, which are necessary pre-requisites for Liberty. Hence my skepticism.

If you think that your own individual rights and liberty to exercise them, would be any more secure with such Libertarian's than would the rights of those people in China and Hong Kong which they so casually disregard and discard in pursuit of a 'free trade!' buck with Communist China (who is a silent 'partner' in every such transaction) - you really should ask yourself why.

Why do I say such a thing as that? Because they exemplify an approach to life that begins with economic thinking, as does Communist China, who finds it useful to permit some possessions & privileges to some of its people, at the moment, and likewise they too see 'property' as a matter of possessions, and 'markets' as but a means of getting what they want because they want it. Sure, 'Free Trade!'rs may differ with Communist China on how to apply their 'economic principles!', but their 'principles!' have the same roots in that strawman which Marx used to sideline the system of natural liberty & judiciary underlying the Free Market which Adam Smith spoke of, and then rebranded that entire system with the materialistic and near meaningless term for a financial strategy: 'Capitalism'. That same economic thinking was also employed in much the same way by the (socialist) J.S. Mill, as he redefined our Founder's vision of Liberty out of existence in the popular mind, in favor of that thoughtless adolescent urge to 'do what you want without restraint!', by means of a steady assault of works best known today from his popular (and contemptible) essay, 'On Liberty'.

One imagines that they tell themselves that their generous willingness to make a buck at the expense of other people's liberty, will bring those people a more prosperous slavery, which will somehow lead their slaveholders to loosen their chains upon them. They do so by ignoring the fact that nowhere in history, has economic prosperity alone succeeded in transforming political systems and tyrannies, into systems which respected the individual rights (or any semblance of the concept) of their own people, or of any other's, and no amount of begging of questions or forgiveness will produce what it lacks.

The bottom line is that people who lack an understanding of what America resulted from, should not be entrusted to care about your individual rights, any further than they can be counted upon to consider the rights of those who're utterly deprived of all individual rights, for that percentage of profits which qualifies in their mind as being 'a good deal'.

Fundamental to the form of 'Free Trade!' espoused by most libertarians, and especially those of the Murray Rothbard ilk (more on that below), is that 'Free Trade!' trades upon the false notion that business & prosperity are what America was founded upon, implicitly trading away the real causes of those effects, essentially arguing in a classic case of 'Begging the Question', that:
"'Free Trade!' has made America prosperous, because America was founded upon 'Free Trade!'"
, a claim which tells you nothing, as it "assumes the initial point", offering it's conclusion, as proof of that conclusion, while actively ignoring the broader cultural causes - a widespread respect for truth, virtue and knowledge within which individual rights could be served & preserved under a rule of law (which is liberty) - which is what preceded and enabled that America, and its prosperity, to result from. One danger of this approach, is that it leads us to presume that we can expect to continue enjoying those effects, without seriously attending to the essential causes of them.

What most Libertarians, and a great many Conservatives, fail to understand, is that an Economy is what follows from the policies that a nation has, and from why it has them. In the end, political thinking that begins with economic thinking, leads a people to forego what is prudent (the best possible application of principle to reality), for what will work pragmatically, at the moment, for the moment. In seeing our economy as something that can somehow exist apart from the Rule of Law - which is what all of our liberty depends upon for being upheld and defended - we've deluded ourselves into seeing 'economic rights' as being equivalent to, and even somehow separate from, those essential individual rights such as are protected under our Bill of Rights, and that one-eyed thinking has been influencing our elections since long before it oozed out into the open with Bill Clinton's 'It's the economy stupid!'.

Our Founder's familiarity with the long track of recorded history in the development of Western Civilization, led them to the revolutionary idea of putting government in service to the liberty of its citizenry, and from that system for upholding and defending the Individual Rights of all of their citizens, prosperity and economic abundance followed in the first imperfect stirrings of a Free Market. Attempting to support or defend that full system based upon economic analysis - whether Left, Right or Libertarian matters little - is doomed to result in... what we are facing right now.

My position, again, is not one of supporting tariffs as economic measures, and in no way do I dispute the merits of Laissez Faire or the Free Market, nor do I in anyway seek to legitimize either economic protectionism or the equally bogus twin concepts of 'Trade Surpluses' & 'Trade Deficits' (I've gone into the details of Individual Rights, the Rule of Law, Free Market & Economics too often before, to rehash again here, see my post on the differences between 'Free Trade!' & Free Market, from last year), I'm simply pointing out that it's only after the proper context of ethical, political, and legal frameworks are firmly in place, that the preconditions of liberty can be met, so that markets can and will be able to experience and enjoy economic prosperity. Once that context is met, there can be no legitimate and informed doubt as to whether a Free Market - whether within a nation, or between nations - will be the most productive and beneficial conditions that can exist. None - not since being informed by the inquiries and theories of Adam Smith, Jean Baptiste Say, and Frédéric Bastiat, followed by the real world results stretching across the 18th, 19th & 20th centuries, soundly demonstrated the truth of their theories in fact (This article thumbnails the issues well). There is not, and cannot be, any beneficial economic justification for tariffs (which, BTW, is not why Trump's threatened to deploy them). None.

My position instead, is that 'Free Trade!' and the Utilitarian philosophy used to justify it, bargains away the ideas which our Founding Father's formed this nation's ideals & government from, in pursuit of the thin appearances of prosperity that are unsustainable without them. In preceding posts I've illustrated how the dropping of important contexts from your consideration through an abbreviated area of focus, transforms once solid principles, into ideological bullet-points, a distortion which leads otherwise intelligent people to argue that the differences between trading with a Westernized ally, and Communist China, is a difference in name only. If the outrageousness of that doesn't hit you, I'll repeat once again that Marx himself asserted that the entirety of his ideology of Communism could be reduced to a single sentence: 'The elimination of Private Property' - how do you 'trade freely' with those who are permitted no private property? Why would you seek to profit by engaging with a nation that is dedicated to eliminating everyone's property and their ability to earn any profit from it at all? How is that not recognized as the complete betrayal of Liberty that it is? That they dare clothe themselves in the name of 'Libertarian', is either a confession of abysmal ignorance, or duplicitousness. Again, hence my skepticism of their ability to defend (let alone identify) liberty.

Such self delusion is only possible to intelligent people by their doing the business of thinking with flawed, if not broken, or even corrupt 'Principles!', thanks to the bad philosophy, or (supposedly) no philosophy at all, which form the seductive ideologies they utilize in place of a philosophy. The active use of such thinking as that, has butchered the remains of what had been the field of Political Economy, into the questionable sausage now known as modern Economics, with the presumption being that we needn't think about matters of philosophy at all, when it comes to 'ordering society' (and there are few things which the Economically minded love to do more than ordering your society), is surprisingly dangerous. According to their calculations, all we need to do is start with the actions and transactions that men act upon in daily life. For the proponents of oppressive govt power, positions such as these are understandable, but for those who think that their aims will enhance and further the cause of liberty, it is just sad. It was bad enough when one of the best of Libertarian economists, Ludwig von Mises, took 'Human Action' as his starting point, but he at least, for the most part confined his thoughts to the realm of economic transactions. Not so with one of his early followers, Murray Rothbard, who took that already abbreviated thought as being sufficient to replace the entirety of ethics and political philosophy with, a statement that he adorably refers to as being a 'principle' or 'axiom', usually referred to as the Non-Aggression Principle,
"THE LIBERTARIAN CREED rests upon one central axiom: that no man or group of men may aggress against the person or property of anyone else. This may be called the “nonaggression axiom.”"
I'll leave it to a future post to go into detail on the enormity of what is ignored in that statement, but it's worth making a mental note that he begins his thinking on how man should live - which is a statement of ethics which he makes without having first established or identified any system of Ethics at all (!), and without benefit of any of those more fundamental systems of metaphysics, epistemology, etc, which a system of ethics is necessarily derived from, and which would tell you (warn you!) what their proponents will feel very virtuous in doing to you. This takes Begging the Question to a whole new level, one that must drop the jaws of the carboard sign beggars at freeway exits. Rothbard quickly moves downhill from there, denying that Intellectual Property is a defensible right (a position which is incompatible with our Founder's understanding of Property) - a right which IMHO, is the necessary and indispensable root for the recognition and defense of all of our Individual Rights & Property - which freed him to sketch out the ideal of Anarcho-Capitalism, the notion that we don't need laws or government at all, only ever more elaborate business models. Even von Mises called that idiocy out, as being:
"...A shallow-minded school of social philosophers, the anarchists, chose to ignore the matter by suggesting a stateless organization of mankind. They simply passed over the fact that men are not angels. They were too dull to realize that in the short run an individual or a group of individuals can certainly further their own interests at the expense of their own and all other peoples' long-run interests. A society that is not prepared to thwart the attacks of such asocial and short-sighted aggressors is helpless and at the mercy of its least intelligent and most brutal members… They failed to conceive that no system of social cooperation can remove the dilemma between a man's or a group's interests in the short run and those in the long run.."
All of which is to say, that those who speak and behave as if 'Economic Realities' should be the starting point for all political thought and action, are spouting nonsense. One of Rothbard's popular quotations, is
"It is no crime to be ignorant of economics, which is, after all, a specialized discipline and one that most people consider to be a ‘dismal science.’ But it is totally irresponsible to have a loud and vociferous opinion on economic subjects while remaining in this state of ignorance."
Which, as usual, is true... as far as it goes... but in not going far enough while presuming that it does, it's application distorts the larger truth into falsehood. Hopefully I'm not the first to reply to that, in that:
"It's no crime to be ignorant of philosophy, it is, after all, concerned with everything which most people think of as being 'boring'. But it is totally irresponsible to have a loud and vociferous opinion upon philosophical issues such as Ethics, Law, Individual Rights and the like while remaining ignorant to the fact that economic theories sprang from the depths of philosophy, and not the other way around."
All of that is important to keep in mind when considering the 'Free Trade!''rs positions on international trade, where a large number of their 'thought leaders' believe that there should be no governments at all (though many do bizarrely desire an international body of a WTO), and so, with economic transactions being the starting point for their thinking - that mythical idea of a stateless world is the Utopia they seek.

In a similarly rootless fashion, most of the Truisms that are thrown out by defenders of 'Free Trade!' as if they were 'Principles!' (Liberty, Trade, Say's Law of Markets, Money), are but an uprooted string of words that they arbitrarily designate as 'principles' (rather than generalized truths derived from and validated by contextual experience, they assert in the spirit of Kantian Imperatives, that what they can't imagine as not being so, must be so). They pluck terms from the pioneering figures of Smith, Say, Bastiat, and more, who were formative in developing the understanding of what Political Economy (note the inclusion of both words) was, and use them without regard for the context that they were derived from, effectively castrating them of their actual meaning - a factor which is essential for their being mouthed and applied in the modern enthusiasms of 'Economics' (usefully reduced to only one word).

The real world consequences of this, is that they behave as if the pre-conditions for a Free Market have been met simply by acting on the desire to trade, which they see as justification and permission enough for trading with a nation that is devoted to the elimination of Private Property, along with all of the Individual Rights which are secured by that property, and which can only serve to undermine Liberty, and the Free Market, and Free Trade, and it will do so for all concerned ( and if you're considering casting a vote for the 'Libertarian Party' this November, please, give more consideration to that first).

Liberty In Name Only
Further illustrating (IMHO) the contexts that are being dropped in these issues, my Libertarian friend Duane, replied to my comments on the shortcomings of 'Free Trade!', with a link to a post in which an editor had taken an old Milton Friedman post from the 1980's, on trade issues between America & Japan, and concluded that in order to equalize the difference between that issue with an ally, and our current situation with a cold enemy today, requires only replacing a few random words:
"...I’ve taken the liberty of modifying and updating Friedman’s op-ed slightly by substituting China for Japan in order to reflect the “favorite whipping boy” of today’s protectionists. And I’ve also updated the last paragraph to reflect today’s favored domestic industries being artificially protected from competition with Trump’s tariffs..."
Demonstrating an astounding naivete, this author felt that the most essential and relevant differences to be found between the rival allies of America & Japan interacting within a shared (semi) Free Market, and our dealings with the lethal enemy to any form of a Free Market that Communism by definition is, and always has been, amount to nothing more than differences in name only.

That left me speechless, and I let the thread go cold. But it's been on my mind ever since... and led to this series of posts.

For someone to imagine that the relations between 20th Century Japan & America, or even those of the19th Century France & England in which Bastiat & Cobden first exposed the fallacies of economic protectionism (which were, military rivalries aside, still being conducted between broadly culturally and ethically likeminded nations), to imagine that either of those conflicts could bear any truly meaningful resemblance to the truly insurmountable differences - culturally, ethically, politically, legally, economically - which most definitely do exist and define the current conflicts between Communist China & America, is at best an example of philosophical & political Dunning–Kruger'ism

That doesn't describe Milton Friedman, as although he gave much economic advice to communists and dictators - including Communist China - he did so mostly on what the failings of their systems were, and why, and how, they should aim towards liberalizing (in the good sense of expanding the liberty of their peoples) their society's economies. And as I noted in the previous post, Friedman, page 57 (pg. 49 in the original paperback) of his book "Free to choose"', thought that the notion that market forces could triumph over the forces of a Communist government, were foolishly optimistic, and on top of that, even between trading partners, the root requirement of a Free Market economy requires that, as he wrote in reference to his book "Capitalism and Freedom" (1962), for a New York Times Magazine article in 1970, was:
"...There is one and only one social responsibility of business — to use its resources and engage in activities designed to increase its profits so long as it stays within the rules of the game, which is to say, engages in open and free competition without deception or fraud."[emphasis mine]
One thing that most definitely cannot be said about Communist China, is that they engage 'in open and free competition without deception or fraud', and those lesser figures who've followed after him have largely lacked that sensibility. Given that and all else that it takes no notice of, this 'updated' post cannot directly answer questions about the 'economic realities' we currently face - too much of reality has been filtered out from the very start - but... by way of noting what it doesn't say, it may still manage to convey something of the dangerously naïve evaluations which Libertarian 'Free Trade!'rs view our 'relationship' with Communist China as being today. Just try to remember to keep in mind what they are not considering in statements such as (Milton, avert your eyes) this:
"...The proponents of protectionism say,
“Free trade is fine in theory but it must be reciprocal. We cannot open our markets to foreign products if foreigners close their markets to us.” China, they argue, to use their favorite whipping boy, “keeps her vast internal market for the private domain of Chinese industry but then pushes her products into the U.S. market and complains when we try to prevent this unfair tactic.”
The argument sounds reasonable. It is, in fact, utter nonsense. Exports are the cost of trade, imports the return from trade, not the other way around...."
The sort of protectionism which Friedman himself was actually rightfully criticizing Japan and America about at the time, were for the most part the foolish policies of both parties, and without merit. But to Trump's credit, as noted previously, that isn't what he's been practicing, and (making allowances for his mercenary use & abuse of soundbite language), what he's been doing has been to use the political threat of tariffs and the like, not as Economic Measures meant to produce economic benefits - which is what actual Protectionism aims at - but as a Political Means of inducing other nations to reduce or drop their tariffs, with Trump's promise to follow in like fashion so long as they 'make a deal' with him, for the purpose of creating at least a somewhat freer market for all, from which economic benefits will follow from - but as effects, not causes.

That is not making an argument that protectionism is a valid economic policy, but only that tariffs can be selectively deployed as an effective political means of bringing about freer economic conditions, and while we'll need to wait for the future to know how successfully they turn out, for the present that's not the point.

Again, Free Trade, conducted within the structures of a Free Market is the best economic policy, but actual Free Trade requires the legal infrastructure of a Free Market to operate within, and a Free Market is the result of a government's political policies which form a strong Rule of Law oriented around the defense of the individual rights and property of that nation's citizens (which is what 'Free Trade!'rs ignore). If you say that economic concerns should take priority over those political and ethical philosophies which are what an economy results from, you do so by undermining both the Free Market and Liberty, in an insane pursuit of a nebulous 'Free Trade!', and to that begging of the question, I say again... no sale.

If, however, in response to the unjustified injection of power into the market, you propose to respond with tariffs as a political means of persuading the other nation to curb their unjustifiably abusive policies, knowing that it will likely incur some damage and risk to your own people (as any confrontation or war necessarily entails), for the wider purpose of ending, or reducing, those unjustified measures, then that is a policy that a justifiable political argument can be made for.

Protectionist policies of the 1980's were the particular point of friction in the original matter that Milton Friedman himself was actually writing about, but to think that those are the defining points of contention between America and China today, is... embarrassingly ignorant, and is an oversight of the magnitude that I'd like to think (perhaps mistakenly) that Milton Friedman himself wouldn't have committed.

When Japan in the 1980's sought to keep 'her vast internal market for the private domain', it harmed only its own people. Japan was unwisely subsidizing its markets at the time (steel for instance), thinking that that was the path to economic success. The proper response then, as now, in similar contexts, should be to engage with them where they may, and let them freely choose the loss of wealth their convictions seem to them to warrant. And as Japan eventually discovered, those policies were unwise, unproductive, and they ultimately economically cost them to such a degree that they have still yet to fully recover from.

But those economic conflicts were conducted between nations that were allied within a shared political context of Western (or at least Westernized) systems.

That is in no way the case in our current situation with Communist China today, and as such we are not pursuing the same 'bankrupt protectionist arguments' that were being pursued between Western allies in the 1980's. To apply Friedman's points which were made with those contexts in mind, to our situation in dealing with a hostile communist nation which is actively committed to our collapse and elimination from the world stage today, reveals the fantasy world of Libertarianism, and their own procrustean commitment to forcing economic thinking into the safe space of their own ideological box.

Taking those arguments out of the context of the 1980's, as this re-writer does, evades and hides what Communist China is doing today with the wealth which the rest of the world has so foolishly allowed them to 'compete' for, and which it has further criminally extracted from their own people. To those ends Communist China is and has been actively pursuing the theft of intellectual property, it blatantly engages in corporate and governmental espionage, their profits from 'free trade!' have enabled the abuse of their own people's lives and rights, have empowered its military encroachment and economic sabotage of those it engages in 'trade' with, and has directed their plunder into markets in competition with American industry, not in a misguided attempt to improve processes and quality so to achieve economic supremacy through actual competition, but for the purposes of achieving military and political supremacy over America and the West. Aims which, if successful, will have dire consequences not only for America, but for the existence of any Free Markets anywhere in the world. To treat that as being nothing more than an 'economic issue', is insanity on the level of lobbying to sell the proverbial hangmen the rope to hang you with.

In the quote above from the faux 'Friedman' post, the author casually repositions the comment that (Communist) 'China' "...pushes her products into the U.S. market...", what do you suppose is meant here by 'pushes'? It's finally a good choice of words, in that it at least implies using force. In Milton's original formulation, it referred to something more like someone pushing you in line outside of a store, to offer you a product for less "Psst! Hey bud, wanna sweet deal on this authentic Rolex watch?", whereas in this reformulation it seeks to avoid acknowledging that it means something more like the action of a thug pushing their way into your store to undersell your clients, at your own counter, with products made from designs stolen from you, and made with money stolen from your own cash register, with the intention of physically pushing your store out of the market and out of business altogether.

Is that latter description of being 'pushed', in any way compatible with trading freely in any market? Ask yourself,
  • Would you view such actions as economic actions?
  • Would you think such actions were being taken only for monetary gain?
  • If you were subjected to such treatment, would you be more likely to attempt resolving that by calling an economics professor, or the police?
To assume that the actions of a state, especially one as lawless as Communist China, whose policies of societal injustice denies and abuses the individual rights of its own people as a matter of course in its pursuit of geo-political dominance, to assume that they are being driven by economic motives alone, rather than by malicious political and geo-political ones, is an assumption which, being that it is naïve beyond belief, should cause us to have more than a few doubts and cautions about those who give them the benefit of the doubt.

The Protectionist Nature of 'Free Trade!'
Should a nation such as ours, ignore the actions of such a nation as Communist China, as it targets some of our citizens, or the industries which some of our citizens are employed in? Should our nation's first concern be with the secondary economic results of it being what it is, or should we instead be concerned with its primary purpose of upholding and defending the Individual Rights and Property of its citizens (which is what shapes and makes its economy possible)?

Oddly enough for 'Free Trade!' libertarians who fancy themselves as being uber-individualists, there's more than a tinge of collectivism in the thinking behind their preferred response of '...unilateral, unrestricted, free trade...'. Take note that in response to the direct criminal actions taken by a foreign power against individual Americans and their businesses, the 'Free Trade!'.rs impulse isn't to defend the property in their rights of those being wronged, but is instead to ignore those wrongs in order to protect the collective national output (GDP).

Note: These supposedly 'liberty' minded folk are not defending the productive rights of another nation's people, but are instead defending actions that have been orchestrated by an abusive foreign power that is targeting productive individuals in another nation, so as to cause real harm to the entire nation (and indeed to the world), by a power that is dedicated to the eradication of the individual rights and property of all peoples.

The call to do nothing in response to such deliberately provocative actions, in the name of 'free trade!', is not a means of promoting the right of individuals to trade in a Free Market, it is itself an exceedingly craven form of protectionism, protecting the flow of money into the collective economy (GDP), at the expense of the rights and property of those individuals who make up that economy. That, my dear Libertarian friends, is collectivism and protectionism, all wrapped up in garish bows of gilded 'Principles!' and 'Free Trade!'. Though no doubt they do so, for the 'greater good'.

In Friedman's "Free to Choose", he had a proposed amendment in it:
"Amendment on Free Trade – The right of individuals to acquire and sell legitimate goods and services on mutually acceptable terms shall not be infringed by Congress or any of the states."
Whatever it was that Milton Friedman originally had in mind as 'legitimate', do you consider such actions by a Communist government, to be offering 'Legitimate goods and services' for trade? IMHO, just as the police take measures to limit and shutdown the 'free trade' in stolen goods in their own cities, so too should our government act in regards to 'deals' proposed by a government such as that of Communist China.

A just Govt must first look to upholding and defending the individual rights and property of its own people, as individuals, and not sacrifice them, or pretend not to notice their being abused by external powers. We do not have a shared judicial system between nation states, there cannot be one at the level of such state actors, but we do have the power to penalize identifiable transgressions against us, and we should at the very least do so by political means such as targeted tariffs (though I'd prefer severing any and all engagement with any and all communist nations), and by very publicly submitting such causes 'to a candid world'.

For any group, let alone one which claims to care about Liberty, to oppose the prudent use of power by a legitimate nation (one that upholds and defends individuals rights and property in their rights) to defend its citizens from the deliberate and criminal targeting of them, or some portion of them by any political power, foreign or domestic, is unconscionable. To advocate for doing nothing in the face of such actions, in order to enjoy a statistical increase of economic wealth for 'all' (excepting of course those who are being targeted by that foreign power(s)), is a false, foolish, and fragrantly corrupt motive, which betrays a tendency towards fiscal collectivism, economic protectionism, and craven acquiescence to appeasement on a massive scale. Such notions can be called 'principled' only by those who've never learned what Principles are.

So long as economic competition is conducted within the range of a just regard to individual rights, then all is well. But when force is inserted into the market on a national scale, it cannot be ignored without making matters worse, economically, and politically. A legitimate nation exists to serve its primary purpose - upholding and defending its people's individual rights & property - and a nation that is great, does not sacrifice its primary purpose, to the pleasures and conveniences of some secondary financial benefits of the passing moment, benefits which can only result in the first place, from that nation effectively carrying out its primary purpose. To advocate doing so is nothing but disgraceful... hence my skepticism towards advocates of 'Free Trade!'.

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