America Needs Tariffs

Tariffs are to goods, what borders are to human beings. Controlling the flow of both into our country is the foundation of sovereignty.

America’s national sovereignty depends on tariffs. Free trade advocates are wrong. Tariffs are a fundamental component of prosperity, not its enemy.

Tariffs are the necessary complement to a strong border. Tariffs control the flow of inanimate goods into our homeland. A strong border controls the flow of animate human beings into the same.

The inverse is also true. Free trade and open borders go together. Both are fundamentally globalist and anti-nationalist. Free trade is, quite literally, un-American. Free trade advocates, whether they admit it or not, want to unmake the traditional American political and economic character in order to replace it with something entirely different.

On the American Right, libertarians are the fiercest defenders of free trade. Indeed, before Trump, libertarian intellectual arguments for reducing tariffs had complete dominance over the post-war conservative movement.

The libertarian argument for free trade rests on the foundation of the alleged benefits of comparative advantage and a moral opposition to rent-seeking. Tariffs, libertarians insist, are a form of government overreach that harms the liberty of Americans to engage in private contractual relations for their own benefit. Tariffs, they insist, make us poorer by imposing inefficiencies into the market. Tariffs reduce competition in the marketplace, leading to less innovation and technological development.

These arguments are not without merit. Trade is obviously a good thing. Life in a world in which every man must make every single good from scratch by his own hands would be one of incredible drudgery and insecurity.

Specialization increases productivity. Doing one thing very well is more efficient than doing many things badly or in an average manner. If I am good at making nails and you are good at making t-shirts, then it makes sense for both of us to focus our efforts where we have the most talent and then trade for what we need.

This is the foundation of the principle of comparative advantage. Even if I am better at making t-shirts than you are, I should still focus on making nails because this is what I am really good at. This specialization makes both of us wealthier because it allows for maximal efficiency.

Libertarian free trade advocates extend this logic to the planet. At a national scale, America should focus its efforts on the most productive industries. Americans should design phones, airplanes, and computers—which is difficult and cognitively demanding—and leave the simpler but more grueling work of mining steel and assembling components to poorer countries like China. This system is more efficient—it produces greater wealth for everyone—because America focuses on what it is good at—designing things—and China focuses on what it is good at—building things. The stock market and GDP go up and hundreds of millions of third-worlders are lifted out of poverty. Everybody wins… in theory.

In practice, free trade advocates ignore political reality. They misunderstand human nature. True—in a perfectly rational world, free trade would be the norm. Everyone should do what he is good at, trading with others all over the world without interference and without fraud.

We do not, however, live in a perfectly rational world. Human beings are selfish, stupid, and wicked. These impulses are controlled only with great difficulty. Civilization is the exception, barbarism the rule. Moreover, there are enormous politically relevant differences between individuals and between nations. Human beings are not interchangeable widgets.

I witnessed a good example of the errors of free trade advocates at last fall’s meeting of the Philadelphia Society. Daniel Hannan, Baron of Kingsclere and a Conservative Party member of the House of Lords, gave the keynote address. Hannan, an ardent Zionist, opened his talk by mocking Hezbollah for falling prey to the Mossad pager attack, in which Israeli intelligence killed and seriously wounded hundreds of Hezbollah fighters by remotely detonating small explosive charges implanted in their communication devices.

Hannan then, without skipping a beat, launched into a full-throated defense of free trade. Hannan mocked nationalist and pro-Trump arguments for tariffs. He pointed to North Korea and Singapore as examples of the paths available. North Korea, his premier example of an autarchic economy and closed society, is significantly poorer than Singapore, an open society built on free trade. Case closed.

But not so fast. Hannan lacked the self-awareness to link the two parts of his speech together. The reason Israel was able to plant explosives in Hezbollah’s pager network is precisely because Hezbollah does not make its own communication architecture. They depended on foreign trade to acquire what they needed. Unfortunately for them, those supply lines were not secure.

Mossad was able to infiltrate the manufacturing process and implant tiny explosives in these devices, turning each pager into a mini IED. Because Hezbollah has no organic communications manufacturing prowess, it lacked the expertise to check the devices for penetration. Even if they had opened up the pagers, it isn’t clear their technical “experts” would have been able to identify the problem.

Free trade was Hezbollah’s undoing. Their faith in foreigners was rewarded with death and destruction. Their dependency on others was their weakness. Free trade is maximally efficient until your trading partner wants to kill you. Then it isn’t. You can only have free trade with someone you trust. Trust, it turns out, is hard to come by.

Hannan’s example comparing North Korea and Singapore is also suspect. True, North Korea is much poorer than Singapore, but North Korea also has nuclear weapons. The hermit kingdom might not have all the trappings of life in a liberal democracy, but it is undoubtedly true that the nation is sovereign on its own territory.

Singapore, by contrast, is much wealthier but far more vulnerable. Its geopolitical situation at the heart of the Straits of Malacca is enormously valuable for trade. But Singapore is only a small island nation. It cannot grow its own food. Nor does it possess the organic resources it needs for its self-defense. Virtually all necessities have to be imported to the island. Nor does it possess nuclear weapons.

This fundamental weakness and dependency were well known to Singapore’s wisest leaders. Lee Kwan Yew himself described Singapore as a mansion surrounded by beggars. Singapore, in other words, has a big target on its back. It needs powerful patrons, like the United States, in order to maintain itself. This fundamental geopolitical reality dominates Singapore’s ongoing existence.

Sovereignty is the power to make real choices. Money is a kind of sovereignty. If you walk into a store with a thousand dollars, you can make all kinds of choices with that money. It is a form of power. But if you walk through a dark alley and a thug puts a knife to your back and demands everything you have, that money is no longer an asset but a vulnerability. For protection, you would need a gun.

Weapons, like money, are another form of sovereignty. Weapons provide an individual and a nation with options in times of crisis. Libertarians and free trade advocates gloss over the reality of such exigencies.

In the talk I attended, Daniel Hannan, for instance, zeroed in on the value of free trade in creating wealth but entirely ignored the potential downsides that dependence on trade had for national security. Ideally, we would not need to spend money on defense and fraud protection—it is, in the libertarian framework, irrational to steal or to go to war. They are right that war is irrational. They are wrong to then suggest we can be rid of war.

Human beings have a powerful desire to have their cake and eat it too.

Trading goods freely sounds wonderful. You make t-shirts and I make nails, but what if I could get your t-shirts without making any nails at all? What if I just took them from you without working? The thug can, with a few knife strokes, make mincemeat of the earnest sucker who spent his days toiling away. The thief acquires with a little blood what the now-dead peasant spent much sweat to produce.

Free trade advocates treat their own moral impulses as the dominant mode of human life. They have a very hard time putting themselves in the shoes of a human being who wants to be a criminal or tyrant.

“But engaging in mutually beneficial trade is good for the long-term betterment of mankind,” they say. But criminals don’t care. The temptation of living life without needing to work for one’s bread is very potent. The world is full of people who confuse short-term pleasure for long-term gain.

Selfishness, stupidity, and wickedness are endemic among human beings. There is no inexorable movement toward freedom or greater reasonability. At best, the human condition is one of cycles of rise and fall. Barbarism is the rule. Civilization is the exception.

Moreover, there is a universal disagreement between human beings about fundamental, existential matters. Human beings regularly kill each other over access to wealth, honor, and sex. They kill each other over religion, ideology, and tradition.

Many modern libertarians have never felt the deep attachments to a way of life that would drive them to war. They are irreligious and concerned with material goods. Spiritual values are of only secondary importance to this human type. They are living in John Lennon’s “Imagine” with nothing to “kill or die for.” Liberalism is triumphant and obviously correct. The only person who could possibly disagree is a fool or a fascist.

The arrogance and ignorance of this view create an enormous blind spot. In order to have a functioning economy, human beings need a functioning political regime to restrain the wicked. This political order needs weapons and men to wield them. It must have power—power to tax citizens, administer justice, and defend members from outsiders.

Such a regime requires that the members feel patriotic allegiance to their shared commonwealth and that they be prepared to sacrifice themselves in its defense. It is fundamentally unfair for some men to sacrifice their lives and treasure to protect others who do not fight or sacrifice. Therefore, the regime must distribute honors and power unevenly, giving a greater share to those who fight than to those who do not.

Fundamental human wickedness creates a demand that the righteous and industrious band together for self-defense. Free trade cannot exist where there is no trust. Trust is built on force because reason alone cannot govern human beings. That is why we have laws and nations.

Free trade requires certain preconditions in order to exist. It requires a society where men keep their word, where fraud is punished, and where men may labor in peace. These conditions can only exist within bounded political orders that sharply distinguish between friends and enemies, citizens and strangers.

Economics is subordinate to politics. Economics comes from the Greek words oikos, meaning “household,” and nomos, meaning “way” or “law.” Politics comes from the word polis, meaning “regime” or “city.” Cities are stronger than households. The gang is stronger than the individual.

For individuals and households to have freedom, they need allies. Our word society therefore comes from the Latin socii, meaning “allies.” The mutual alliance that preserves our liberty from foreign threats, natural disasters, and the winds of fortune requires certain duties between citizens.

My neighbor, for instance, builds automobiles. Let’s say I import a Chinese car for 75% of the price of his vehicle. That would make me wealthier, of course, but it would put my neighbor out of business. It would destroy his livelihood and threaten his family’s long-term security.

An open border might benefit me but it costs my neighbor a great deal. It has shattered the social contract between us. Replacing my neighbor’s business with the product of foreign labor might boost GDP in the short run but it now means my neighbor needs to uproot his whole life. The “creative destruction” from free trade has enormous costs for those getting destroyed. The type of man who makes for a good assembly line worker may not make a good computer programmer.

Before free trade and open borders, my neighbor and I both could live good middle-class lives. After my neighbor’s displacement by more “efficient” Chinese labor, I am slightly wealthier but my neighbor now has nothing. I have harmed my former friend and ally. Our alliance is broken because of my selfish desire for gain.

Free trade and mass migration operate on the same fundamental principle. Both destroy the social cohesion and political alliances that make genuine liberty possible.

This is not to say America should have no foreign trade. We should. But that trade should never come at the expense of the preservation of our national sovereignty. Tariffs ensure that does not happen; they prevent our enemies and competitors from flooding our markets with cheap goods to destroy our native industry. Tariff rates are a matter of prudence. At times it may be better to favor producers and, at others, consumers. Such decisions should be made as a matter of public policy and in accordance with the will of the people.

A strong political regime makes productive trade possible. Americans have free trade within their borders and rightly so. Businesses in Michigan can compete with businesses in Wisconsin and Texas because those competitors are our fellow citizens. This competition is bounded. In a nation with a tight labor market and high wages, losing your job to a domestic competitor isn’t that big of a deal—you can easily pick yourself back up.

Even when you don’t win, you know that your neighbor, who is bound to you by oaths of loyalty, has won. His private benefit accrues to you, too. It is better to be a poor man with rich friends than a rich man with no friends.

A strong political order is the foundation of real freedom. It makes genuine liberty and productive trade possible. Tariffs, like government itself, are a concession to man’s weakness, to the precarious position he finds himself in by nature. Tariffs secure our borders. They are protectionist. This is good! Protecting our fellow Americans is good.

Without a border, we do not have a country. Without a country, we are left naked and alone in a world full of strangers and enemies.

Liberty depends on sovereignty.