A10: Protect the Trade

Before we begin, I would like to make a correction from last weeks article. The bull by Rauch depicts the ram that was sacrificed in place of Abraham’s son Isaac (Genesis 22) not Baal. However, I still make the stance that it is very creepy.

There, I do read your messages if you text or email me. Now, let’s talk politics.

Any person who has taken an economics class has heard the free-trade view professed by Adam Smith in his Wealth of Nations. The view is that a nation should eliminate all protections and specialize in what they have an advantage in producing to trade with other nations.

This position has dominated for the past 100 years, however with the new administration, another view has been proposed: the protectionist view. Scoffed by most in the mainstream media and academia, I thought I would make a humble defense.

The theory behind tariffs is that we must protect our home industries from foreign competition to allow them to grow strong and so have a prosperous country. Our nation is like a tree, and we must provide the proper nutrients and support so it will bear and produce much fruit.

The strength of a nation does not lie in the amount of gold and silver in its coffers, but the productive power of its people. All the wealth of Spain from its conquest of the New World, could not compare to the power of the British Empire and its manufacturing. The more we produce as a nation, the greater is our sovereignty as well as our consumption.

Let’s do some history. In the 1860's, there were three main industrial powers: the United States, Germany, and England (dominant producer of the world).

At this time however, Great Britain, allured by the doctrine of free trade, had decided to remove all of their tariff laws and other protections like their corn laws. It became the freest economy the world had ever seen. The United States began to add tariffs and so did Germany. With this shift, industry began to leave Great Britain to the protected countries.

For example, tin plates were tariffed in the 1890's and over the next decade we took over Great Britain's entire tin plate industry. The prices dropped in the US by 50%, making us the biggest exporter in the world. This was true for many other goods such as steel, oil, gunpowder, etc.

What is interesting as well, is that we were paying our workers 50% more than in Great Britain. By encouraging manufacturing and not allowing cheap labor to undercut the American workforce, companies generated profits by increasing productivity of the workers. Thus raising their wages and decreasing prices.

Wages did fall in the United States, specifically in the railroad industries, however that was accompanied with an even greater 25% decrease in the cost of goods. Compare this to Great Britain whose industries had floundered by the time of WWl.

One of the most common attacks modern economists want to throw at tariffs is it’s negative impacts on the economy. Supposedly, we will see a decrease in foreign consumption as well as an increase in prices,

In reality however, the opposite is true. When we decrease domestic production, we also see a reduction in consumption, both foreign and domestic, as well as an increase in the use of credit. We consume less foreign goods when we remove tariffs not more. Don’t believe me, let’s look at the data.

During the time between the 1820’s to 1840’s, we see a series of fluctuations in tariff amounts providing excellent data to track. In 1828, after the passing of the Tariff of Abominations (a high tariff on manufactured goods) we see a boom of the American industries from wool, to steel, to coal. This continued until the passage in 1833 of the Compromise Tariff in response to the nullification crisis. Factories closed up, mills stopped construction, and the entire economy slumped. Likewise, at that time we see an increase in public debt at the time.

In 1842 with the passage of the Black Tariff we once again saw a reinvigoration of the industries, however they were quickly suppressed with the Walker Tariff of 1846. Fortunately, for the United States, in 1846 Great Britain removed their corn laws allowing us to find a source to still pay for the Mexican-American War (check graphs pages 32-40).

We can see more negative effects of free trade from the Methuen Treaty of 1703, to the end of the French continental system in 1814, to before the establishment of Russia’s independent system of trades in 1821.

I wonder how they come up with the nonsense taught in economics today, for it certainly doesn’t lie in reality. Tell any of your economics professors I’d be more than happy to debate them on free trade in front of a life audience.

If there are any sharp young men who have the guts to go challenge the authoritarian dogma you hear in the economics classroom, I have some more sources you can look into down below.

Do not go into your classrooms as a passive sponge, but challenge. Be assertive, be disagreeable, do not be afraid to speak unpopular views. If you do, fight like a lion until evidence shows otherwise. A thinking man is a dangerous man, for his mind cannot be controlled. That is the caliber of men which this country needs!

Things are heating up at Lehigh for the Muslims may be making a comeback! After over a semester of suppression, there may be a resurgence. I saw plenty of their illegal posters around, and now I might have to worry about competition for space. 😬

Will the Qur’an lovers be worthy of serving in Saladin’s army or are they all mere fluff? Let’s see if some of the young men have the guts to host some more pro-Palestine rallies. Now Christians, we can’t let the Muslims show more courage than us. What would Richard the Lionheart say to such a disgrace. Either way, things are getting uncomfortable for Israel’s Amen corner.

A few guidelines for anyone doing some rebellious posting.

This is not meant to restrict you, but just a some advice from someone who has been fined by the school and sent to the deans for posting. I’m just trying to save you some hassle.

Nothing wrong with a bit of rebellion, but we can still have this institution looking classy. Besides, let’s still not make our officer’s lives harder than they need to be.

As many of you are aware, this week is our big rivalry game against Lafayette. To celebrate posters are hung around the school.

However when looking at these I could not help but notice how mild they were. With insults like these, who needs complements? Seems like all we are doing is offending ourselves. Then, I received this email, and got my answer.

All this “atmosphere” and “unintended harm” slop is making me sick. When did this school become run by such pansies. If it were 1776, they certainly would have been loyalists. We are adults, yet the school treats us like little children that need to go to the hospital for a paper cut. This is a time to grow up to face challenges, hardship, and difficulty, not hide away in safe spaces. Such sheltering will get one eaten alive in the real world.

More importantly however, where is the courage at this school? Where are the men who will make a stand for something? Our country is falling to bits, yet we are too afraid to speak. We can either get drunk, play videogames, smoke weed, and pretend nothing is happening or we can man-up and fix this nation. I want my children to have a future. I want to be a father they will proud of! What say you?

At least we have a few true patriots left, who are not afraid.

Go Lehigh! Skin their leopard hides. I want a nice rug for Linderman!

Your humble servant, Francisco Pereira

The National System of Political Economy by Friedrich List

Terrific book arguing for tariffs. This book goes into the details of many European countries and the affects of their policies.

Harmony of Interests by Henry Carey

The best protectionist viewpoint I have found based on American data. This book is written by Lincoln’s economic advisor.

The Tycoons by Charles Morris

For anyone who wants an introduction to the industrial revolution in America. The end has some good tariff data.