Saturday, November 12, 2016

Market Aims

George Will's columns are always thoughtful and always worth reading (even if one doesn't always agree with them).  In the Washington Post, he outlines what he takes to be some of the challenges facing conservatism.  In addition to noting that anger alone is not enough to ensure good government, Will turns to the topic of trade, which has been a decisive issue this campaign:
People who have been conservative since before 2015 should, in considering how to relate to the president-elect, ask themselves some questions, such as: What are we saying if we say we are against free trade? Protectionism is comprehensive government intervention in economic life. It supplants commercial calculations with political considerations. Using tariffs, which are taxes imposed at the border, government imposes its judgment of what Americans should be permitted to purchase, in what quantities and at what prices. If conservatism can embrace such statism, can it distinguish itself from progressivism — the doctrine that government experts are wiser than markets in determining individuals’ choices and directing the efficient use of labor and capital?
To answer the final question first: Calvin Coolidge was a big proponent of what many would today call "protectionism," but he was very capable of distinguishing his political vision from that of progressivism.  Unless conservatives want to read Coolidge (and Lincoln and Hamilton many others) out of the pantheon of conservatism, it's hard to say that support for "protectionism" disqualifies one from being a conservative.

However, there's a more fundamental complexity here, and it relates to the idea of "supplant[ing] commercial calculations with political considerations."  Many of the United States's trading partners (most notably, the People's Republic of China) use political energies to distort the market through massive subsidies, demands of private-public partnerships for American firms to have access to local markets, etc.  The system of globalized accords often called "free trade" agreements, then, often increases the ability of foreign nations to dictate economic outcomes to the United States through these politically-motivated market distortions.

One could argue that this increased foreign intervention is a good thing taken as a whole or that it is a necessary step on the way to a free-market nirvana.  But one should not discount the political (and economic) doubts some might have about the risks of such a policy.  Tariffs are a government policy, of course, but it would be a mistake to deny that many of the outcomes of the current "free trade" regime are themselves a product of government policy (and often of policies set by governments that are not accountable to the American electorate).

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