Tuesday, October 12, 2010

Ripping Ricardian "Logic"

Vox makes an interesting observation about the Ricardian "Free Trade" blather.

...we can conclude that government cannot and should not be involved in making decisions regarding which domestic industries should be protected from foreign competition and which should be abandoned to it. However, it is a complete failure of logic to conclude on this basis that domestic industries should not be protected from foreign competition because the impossibility of calculation does not go so far as to preclude a government's ability to distinguish between foreign and domestic production, let alone a foreigner and a citizen. And to deny that a national government can justly prefer the well-being of its domestic producers and citizens to that of foreign producers and non-citizens is no different than denying a national government's right, (to say nothing of its responsibility), to defend its borders against military invasion.

And for Vox, this is actually a conversion from his prior "Free Trade" advocacy.

...the fact that the Ricardian crowd has been reliably dishonest about the historical effects of the Smoot-Hawley tariff, the positive effects of tariffs during the 19th century, and the probable effects of free trade agreements like NAFTA should give serious pause to those who, like me, have tended to assume that free trade was an unmitigated societal positive without stopping to seriously consider all of the logical consequences.

Why? Simple:

...To accept the concept of free trade and its necessary consequences such as open immigration and universal citizenship, it is therefore necessary to reject the U.S. Constitution and the idea of limited government as well as everything that history has taught us about cultural, ethnic, national, and religious differences.

Ricardianism is a doctrine no less utopian, and no less ultimately destructive to society, than Marxist scientific socialism, feminist equalitarianism, and the pseudo-scientific New Atheism. Note that its primary justification of collective enrichment at the expense of certain individuals is virtually identical to the Marxist justification of socialist distribution and is one of the many theoretical connections between Marx and Ricardo.



J. Strupp said...

Careful Dadster. You'll rile up the Mises people.

I think this issue will be a HUGE topic of discussion moving forward. Global imbalances created by the proliferation of unfettered "free" trade do have consequences and some of these consequences appear to be quite severe. I'm not one to advocate protectionism, but the protectionist crowd does have a legitimate beef these days. Something I would have never thought would be possible until about 2 years ago.

Dad29 said...

To my mind, (here I follow PJB), it is perfectly licit and desirable to impose tariffs which offset the costs of taxes and regulations, because those costs are much higher here than in SOME other places.

In addition, we should apply a tariff which accounts for monetary manipulation such as the deliberate undervaluing of the PRC currency.

It's called FAIR trade.