Mercantilism: Globalists hate it and so does Lew Rockwell

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Written By Al Cronkrite

At the outset, let me state that I enjoy reading the LewRockwell.com internet page and generally agree with Lew Rockwell as well as many of the others writers.

Libertarians are often Free Trade zealots. Many contend that depleting the standard of living of American workers is an acceptable consequence of Free Trade.

Though I am a devotee of Adam Smith and would restrict government to protecting the nation from foreign invasion, administering justice, and a minimum amount of public work, I am astounded at the callous disregard for the public welfare contained in some Libertarian expression.

On July 26th the Mises Daily Article was a special by Llewellyn Rockwell, Jr. on the subject of Mercantilism. Mercantilism involves government protection of domestic industry. He begins the article with this paragraph:

“The great economic error of mercantilism is the belief that foreign buyers are great but foreign sellers are not, and thus are barriers to imports necessary. For a nation at large, this error can be extremely costly because it dooms producers in the home country to inefficient lines of production and foists unnecessarily high prices on consumers.”

He then continues to advocate the free importation of catfish from Vietnam, computer chips from South Korea, and textiles from China. His remedy for American producers is to become “more efficient“.

Stating that mercantilism “dooms producers in the home country to inefficient lines of production” is false. The American textile industry is and was as efficient as any in the world; we can also raise catfish and make computer chips with equal alacrity. It is the labor component of the manufacturing process that lacks competitiveness. Prior to the free trade debacle, competition within the American labor force and among American businesses rewarded American labor with the highest standard of living of any comparable group in the rest of the world. In this era, the “more efficient” that Mr. Rockwell demands takes the form of a reduction in the standard of living of the labor force!

Free traders must be afflicted with callus opprobrium to consider placing their fellow Americans in such a predicament. Why would a nation that is enjoying the highest standard of living in the world and that has the world’s largest and most affluent middle class decide to allow foreign competition to force down the wages of their laboring citizens?

The article ends with this sentence:

“The pressure of globalization combined with the irresistible pressure of free markets will eventually prevail over all political attempts to design the market to the government’s liking.”

Free trade as described by Mr. Rockwell promotes egalitarianism. Its culmination is the leveling of world economies and the destruction of nationhood. Is this the reason our leaders have allowed our standard of living to deteriorate and our markets and our industrial base to be raped; so we can be a part of the new globalization?

In another article Mr. Rockwell sides with the Anti-Defamation league (ADL*) against the contention by an Illinois bank that some of Hitler’s economic policies were good for Germany. Mr. Rockwell writes:

“So it is with protectionism. It was the major ambition of Hitler’s economic program to expand the borders of Germany to make autarky viable, which meant building huge protectionist barriers to imports. The goal was to make Germany a self-sufficient producer so that it did not have to risk foreign influence and would not have the fate of its economy bound up with the goings-on in other countries. It was a classic case of economically counterproductive xenophobia.”

Adam Smith’s laissez-faire theory allowed for governmental protection from foreign invasion (A bit xenophobic, don’t you think?). He wrote in a different era and it is highly likely that in this day he would have deemed the economy worthy of governmental defense. If a nation is to retain the ability to defend its borders and the living standard of its citizens isn’t it advisable that it, “not have the fate of its economy bound up with the goings-on in other countries.“? Xenophobia at the national level is both realistic and the reason for autarky!

The “Free Trade” being foisted on Contemporary America is really not Free Trade at all but government controlled Free Trade designed to do exactly what Llewellyn Rockwell seems to be saying it should do – bring cheap and often inferior foreign imports into our economy at prices that will require the reduction of the living standard of our workers, rob us of essential industry, and eventually replace this nation as the leader of the world.

The Free Trade theory was sold to us following WWII and as our leaders bragged that we could “compete with anyone in the world” and assured us that Japan was a fine market for American goods, we began to have massive trade deficits. While the Japanese ran roughshod over American markets, we were never able to properly penetrate theirs. The result of this folly was Japanese ownership of American debt, extensive real estate holdings, and a large tenure in our industrial base.

The same bogus sales job is being touted with China. Our leaders are assuring us that “we can compete with anyone on the world” and that China’s massive population is a great market for American products. We are inundated with Chinese goods but have little leverage in the Chinese market. The rub is that we are losing most of the industries that make the products we might ship to China if they would let us (they probably wouldn’t).

It is difficult to get accurate figures on the jobs that have been lost. There is no doubt that the last decade has seen the lose of millions of industrial jobs. Not long ago Labor Secretary Elaine Chao said before congress that the jobs lost in the industrial sector would be replaced by High Tech jobs. Such a statement is hard to believe since we are importing hundreds of thousands of high tech workers and, as if that was not bad enough, our formerly domestic industrial giants are exporting white collar and high tech jobs to lower paid employees in Asia.

Karl Marx is quoted as saying, “When you place a free man in competition with a slave, you enslave the free man.” It is a maxim true of Free Trade. When we trade with slave nations, we make slaves of American labor. Free trade is slowing reducing America to the level of the nations with which we are trading. The standard of living in China is rising at unprecedented rates while more and more middle class American industrial workers are being forced into subsistence service jobs.

I am on the bandwagon and playing loudly for small, un-intrusive government and for individual and business freedom but I am totally against the purposeful demolition of our Nation, and the tyrannical imposition of democracy, free trade, and peace.

Man in all of his endeavors requires restraint. America’s Founders understood this need and because free nations can only be sustained when individual citizens restrain themselves, they fostered Christianity and the Laws of God as the standard of behavior.

It is a fraudulent government scheme that allows International corporations to become the possession of foreign entities whose labor force lives at subsistent levels.

Free Trade is stealing America’s wealth and the living standard of its citizens. It is hard to believe that those who support such a pernicious scheme have sufficient regard for the Nation.

*In his letter to the Glenview State Bank, Richard S. Hirschhaut, Regional Director of the Greater Chicago Anti-Defamation League begins with this paragraph: “As you may know, the Anti-Defamation League, founded in Chicago in 1913, is a human relations and civil rights organization that combats anti-Semitism and all forms of bigotry, as well as promotes tolerance and diversity throughout the United States and abroad. We sometimes receive complaints from community members regarding offensive and inaccurate portrayals of World War II and it is in this regard that we contact you today” Emphasis mine.


Published originally at EtherZone.com : republication allowed with this notice and hyperlink intact.”

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