Tuesday, February 10, 2009
The philosophy of protectionism is a philosophy of war. The wars of our age are not at variance with popular economic doctrines; they are, on the contrary, the inescapable result of consistent application of these doctrines.
-- Ludwig von Mises
Posted by Tom, 2/10/2009 6:13:14 AM (Permalink). 3 Comments. Leave a comment...
This is about the only piece of Mises' philosophy I disagree with. If I trade freely with a slave state, China comes to mind, it means in essence I value slavery, and to compete successfully I (A) need to have slaves myself, say by importing heaps of illegal Mexican immigrants, or (B) convince China that slaves are a bad idea. I favor the second method, but the inertia of moving a one billion person state using 300 million may bankrupt us. The game of economics has rules, which are not the same for each partner in complex trading scenarios. Some protectionism allows us a bit of buffer against those playing what we feel is a less ethical game.
Mind you I don't think most people engaging in protectionism are being nearly so sophisticated as this.
I think you're doing a fair bit of oversimplification yourself, by calling China a "slave state". It is true that the average Chinese has considerably less freedom (economic and otherwise) than the average American, but they are not slaves. Researchers on the ground have indicated the ability to seek higher wages, change jobs, and start businesses, all things which slaves would not be able to do. Some so-called "sweat shops" IN CHINA have even gone out of business due to lack of workers when all of their labor moved on to better pay.
There is also the fact that Chinese freedom is expanding, while American freedom is contracting. These are not inconsequential considerations in the puzzle of foreign trade.
I just realized that you don't actually disagree with Mises on this point. In essence, you are saying that protectionism, with its accompanying warlike tendencies, is an appropriate response to a slave state. You are not saying that protectionism is inherently peaceful, but rather that economic war with slave states is morally justifiable. If anything, THAT is your point of disagreement with Mises.