SFL Liberty Forum Online* Presents:
Luca Gattoni-Celli, Junior at the College of Charleston
*Serving as a daily exchange for students’ ideas, the Liberty Forum publishes short articles, thought pieces and academic abstracts on the SFL website. Articles may be submitted on any topic concerning classical liberalism by undergraduates and graduates. We encourage all students (high school, undergraduate, and graduate) to submit any short intellectual pieces to SFL. Find out all about how to submit and read previous submissions in our archive here!
Our archive includes a previous article by Ross Kenyon on “Free Market Base or Superstructure: An Open Inquiry Regarding Resultant Political Economies & the Moral Culpability of Current Beneficiaries.”
Against the Concept of Economic Nationalism
Cheap foreign labor is taking our jobs. Domestic industries like agriculture and manufacturing must be protected from foreign competition. Imports are bad. Exports are good. Currency depreciation is thus desirable. The flow of money into and throughout the nation each year (GDP) is the best measure of our economic well-being. Such assertions are made frequently by the usual suspect thinkers of public discourse: politicians, pundits, and journalists. They are as incorrect as they would have been 300 years ago.
In 1776, Adam Smith wrote An Inquiry into the Nature and Causes of the Wealth of Nations. He was reacting to European kings’ obsession with accumulating specie and creating international trade empires, a zero-sum economic doctrine called mercantilism. Monarchs taxed their subjects into starvation to launch armadas and wage genocide against civilizations half a world away. Economic historians generally view the publication of Wealth of Nations as the blow that fatally discredited this brutal doctrine. Although his writings rejected unfettered free markets as base and exploitative, Smith was equally condemnatory of fallacious economic reasoning that perpetuated illiberal government and impoverished Europe. Ultimately, Smith cared about human freedom and flourishing. He was a moral philosopher and humanist. His simple observation was that the wealth of nations is not measured in gold, or goods and services, for that matter, but in the ability of individuals to purchase them. Smith did not advocate economic individualism so much as recognize that it is the singular arrangement under which the human condition may improve. His insight was that individuals voluntarily address each others’ rational (albeit imperfectly-so) self-interest.
As noted above, Smith’s profound insights are not as widely-regarded as the earnest student of economics might hope. Commentator Lou Dobbs exemplifies the hyper-nationalism and xenophobia of the neo-mercantilist view. To quote Ayn Rand, “Racism is the lowest, most crudely primitive form of collectivism.” Hyper-nationalism and xenophobia are forms of racism. When commentators makes the claim that the ‘American worker’ must be ‘protected’ by virtue of his being an American, his livelihood and personal success are implied to be somehow special and wonderful—denigrating the affluent German and poor Chinese worker alike. The American has more of a right to sell his labor than any non-American. He is one of us. The ‘American farmer’ has a preeminent right to sell his crops in the United States or any other nation. He has the right to demand tariff and subsidy programs which increase prices and generate surpluses (“aid”) that undercut third-world economic development. He is one of us.
Who are we? We are individuals—not a tribe brandishing spears at the outside world. America is defined by ideas, chief among which are beliefs in the primacy of merit and innate dignity of the individual. Commerce is a set of voluntary interactions which embodies these ideals. It rewards tolerance and punishes arbitrary judgments. For example, if I refuse to hire otherwise qualified individuals simply because of their ethnicity, my competitor can gain a real advantage by hiring them. As the saying goes, markets see only one color: the color of money. Many such judgments are embodied in the concept of GDP. Its theoretical assumptions make neo-mercantilism possible. Yet if transactions are mutually-beneficial, whether an American firm exports or imports, it is better off for trading. A reasonable Manhattanite would reject the argument that the McDonald’s near his apartment should be protected from competition with a Burger King in the Bronx, a Wendy’s in Rochester, or a Dairy Queen in Boston. Why are such distinctions permitted across national borders?
The very concept of a national economy (domestic versus foreign ‘product’) is deeply contrived. We benefit when we transact on merit alone. India only started growing when it softened its trade barriers. America’s current account deficit with China is as meaningless as my current account deficit with Chick-fil-A. The agonizing oxidation of the Rust Belt has only been prolonged by protectionist policies that have discouraged entrepreneurs from moving our economy toward its comparative advantage. Whenever a politician pontificates about the sanctity of domestic industry, he is betting that instead of evaluating his statements rationally, you will demonize entire nations of individuals. Doing so makes you the enemy of peace, tolerance, reason, and your own interest.
