FREE TRADE AND FREE MARKETS ARE ESSENTIAL FOR A GENUINELY FREE SOCIETY
BY
ALLAN C. BROWNFELD
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The Framers of the Constitution understood that free trade, free markets and free enterprise were essential elements of a free society. It was largely because the government in England was abusing its power in the economic realm that the American Revolution was launched.
In his Second Treatise, John Locke, the philosopher who most significantly influenced the thinking of the Founding Fathers, stated that, “The great and Chief end…of man’s uniting into commonwealths , and putting themselves under government is the preservation of their property…Every man has a property in his own person. This nobody has any right to but himself. The labor of his body and the work of his hands, we may say, are properly his. Whatsoever, then, he removed out of the state that nature hath provided and left it in, he hath mixed his labor with it, and joined to it something that is his own, and thereby makes it his property.”
Government intervention in the working of the free market traditionally has helped particular special interests which promote such interference. Sadly, both Democrats and Republicans have engaged in such machinations. Consider former President Donald Trump, who now proposes to impose 10 percent tariffs across the board. This, his Republican challenger, former South Carolina Governor Nikki Haley, pointed out, “..is going to raise the cost of anything from baby strollers to appliances.” She was referring to Trump’s promise to raise taxes by ten per cent on all imports into the U.S., whether from friends or foes. It has also been reported that he plans to levy a 60 per cent tariff on all goods from China.
When he was president, Trump levied huge tariffs on goods from China. Studies by economists at Harvard, Princeton, the Federal Reserve and the International Monetary Fund determined that the costs of these tariffs were borne almost entirely by Americans in the form of higher prices. Tariffs, for example, were imposed on foreign-made steel and aluminum. This ignored the fact that many more workers are employed by U.S. firms that purchase these materials—-automakers for example—-than those that produce it. The result was an estimated 75,000 fewer jobs in manufacturing attributable to metal tariffs alone.
Beyond this, are the retaliatory tariffs which cost many U.S. jobs, particularly in farming. Capital Economics, an economic analysis firm, estimated that tariffs that are now being proposed would subtract up to 1.5 per cent from U.S. gross domestic product and trigger a rebound in inflation. Adam Posen, president of the Peterson Institute for International Economics, believes that a 10 per cent global tariff would increase overall prices by two to three percentage points—-double today’s rate of inflation.
Michael Strain laments that Republicans have been largely silent when it is Donald Trump who is imposing tariffs which are, he declares, “a tax on consumers.” Strain is director of economic studies at the American Enterprise Institute, a conservative think tank.
Unfortunately, President Biden has largely kept in place the tariffs which Trump imposed and has added some of his own. Indeed, Biden’s trade representative,Katherine Tai, recently said that trade strategy should care less about “lower prices.”
It would be good for both Republicans and Democrats to review a bit of our history when it comes to economics. In their initial consideration about what kind of government to establish, the Founding Fathers, when they turned their attention to questions of economic organization, asked themselves which economic form would best maintain the free society they were in the process of creating. Clearly, the answer was free enterprise. For men suspicious of government power, this was an obvious choice.
Professor Milton Friedman explained that, “The kind of economic organization that provides economic freedom directly, namely, competitive capitalism, also promotes political freedom because it separates economic power from political power and in this way enables the one to offset the other.”
In Friedman’s view, “Political freedom means the absence of coercion of a man by his fellow men. The fundamental threat to freedom is the power to coerce, be it in the hands of a monarch, a dictator, an oligarchy , or a momentary majority. The preservation of freedom requires the elimination of such concentration of power to the fullest possible extent and the dispersal and distribution of whatever power cannot be eliminated—-a system of checks and balances . By removing the organization of economic activity from the control of political authority, the market eliminates this source of coercive power. It enables economic strength to be a check to political power rather than a reinforcement.”
The unfortunate fact is that no “form” of government, no matter how carefully devised ——can make freedom certain and lasting. In Book XI of The Spirit of the Laws, Montesquieu said that no form of government is free “by its nature”—-none has liberty built securely into its very form. Every form of government gives power to some governing authority and “eternal experience” teaches that, if the power is not restrained, it will be abused. How can it be restrained? Montesquieu believed that power could only be restrained by “another power”; hence our concept of federalism and checks and balances.
Even at the beginning of the Republic, perceptive men such as John Calhoun predicted that government would inevitably grow,that those in power would always advocate a “broad” use of power, and those out of power would always argue for a “narrow” use of power, and that no one would ever turn back government authority which has once been assumed.
Historically, we have seen Republicans oppose big government when Democrats are in power,but speak of concepts such as “executive privilege”when their own party held positions of authority. The Democrats have done exactly the same thing. The growth of government and the accompanying decline in freedom has been a steady process, regardless of who was in office————Federalist,Democrat,Republican or Whig,liberal or conservative. And consider the national debt——it grew under Obama and Biden—-but it also grew under trump——when Republicans controlled both houses of Congress.
Let us remember the direct connection between economic freedom and our other freedoms and resist those who would tamper with free markets and free trade,regardless of party.
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