Creating Stability with Trade

My post yesterday on drought in New England and its effect on food supply leads me to another point I wish to make, namely that trade creates stability and resource security, something that is contrary to popular opinion.

As one commentor at Cafe Hayek said:

Redundancy and efficiency are generally opposites and one of the reasons trade is beneficial is that trade promotes efficiency at the expense of redundancy. Redundancy is a method of achieving resilience. Reducing redundancy increase fragility. Is the fragility from international free trade worth the little bit of extra efficiency? How much extra efficiency is there or would there be if trade restrictions were further reduced?

His comment, while a common perception, gets the matter exactly backward.  An economy that is entirely self-reliant is extremely fragile. Famines, plagues, natural disasters, war all weigh heavily on the entirely self-reliant economy. Trade reduces that fragility by increasing supply and increasing options. If the price for apples were to suddenly increase because of a drought, the self-reliant economy would be faced with a problem. However, the interconnected economy could either import apples from elsewhere or turn to substitutes.  In short, the dichotomy he discusses is false. It’s not an efficiency at the expense of fragility trade-off. It’s an efficiency and lack of fragility gain.

The discussion of the drought in New England yesterday is a perfect example of this. If New England had no trade, there wouldn’t be resiliency and redundancy in its economy.  There’d be fragility.  Their crops are threatened and, with no where else to turn, they could be facing high prices or even malnutrition (if it persisted long enough).  Fortunately, New England does have free trade within the US and relatively free trade with many nations, and thus has many options to choose from.  The biggest issue from this drought is burnt lawns for many New Englanders.  The New England economy is made stronger and more resilient with trade, not more fragile.

In Praise of the 10,000 Mile Diet

WBZ Boston, the local CBS affiliate, uploaded this map yesterday visualizing drought conditions in New England, as well as this commentary:

[Edward Davidian] is the president of the Mass Farm Bureau and co-owner of Davidian Brothers Farm in Northboro. The effect of a lack of rain may be obvious but the impact on crops is even larger.

Davidian says, “well when there’s not enough water the plants suffer, you know, they’ll grow, they won’t grow well, the physical size of the product you pick off it will be smaller. There’ll be problems with it in some cases.”

In other words, crops of New England farmers are shrinking.

If Massachusetts (or New Hampshire, Vermont, Rhode Island, Connecticut, or Maine) were solely dependent upon these crops to feed themselves (aka a locovore diet), then they would be in serious trouble.  New England has approximately 15 million people living in it and falling crop sizes could cause serious disruptions in people’s diets.

Fortunately, New England is not in such a predicament.  Stores in New England can import food from areas outside the region with a surplus, such as Iowa, Kansas, Ohio, Indiana, etc, to help meet demand.  Far from the popular slogan “No farms, no food,” the 10,000 mile diet helps ensure food security.

Economic Colonization

Throughout this election cycle, we have heard Trump, Sanders, Clinton, and many others decry free trade.  Trump and Sanders in particular have discussed how America is “losing” because we import more than what we export.  They would want America’s trade deficit to shrink by reducing imports (through tariffs or bans) and increasing exports.  They claim this is the way to make America great again and bring back prosperity.

There is already a term used to describe an economic system where one organization comes along, strips the resources of another, and provides little or nothing in return.  It’s called “Colonization.”

Colonization is almost pure mercantilism.  The colony has a near-perfect trade surplus and the colonist has a near-perfect trade deficit.  And yet, it is the colony that suffers economically from this transaction, not the colonist.  The European colonization of Africa, or Japanese colonization of Korea and China, are perfect examples of this.

There are examples of colonies that were more successful and less destitute, such as New England.  But the main difference between the two is not the political system, but rather the economic system.  New England exported a lot of goods to England.  If they did not import, they’d have been just as poor as Africa or Korea during their colonization.  Instead, New England could import goods and improve their lives.

The short version of this is the same message that Adam Smith has been saying since 1776: it is not the exports that generate wealth for a people, but rather what they can consume.

The Unseen of Pet Ownership

In the Pittsburgh Tribune-Review, Don Boudreaux has an excellent article on the insights of Frederic Bastiat on the “unseen” aspects of economics.  The whole thing is worth a read.  But Don focuses very much on negative unseen consequences.  I want to share a positive case:

I have a cat.  And, like every other cat owner in the world, I think my cat is the absolute best.  She is the first “real” pet I ever had (I had a few fish growing up and a gecko my first year living away from my parents).  So, until I was 25, I never knew the joy of life with a pet.

I can honestly say my life is better off with my cat in it.  She has been a constant companion to me since the first day I adopted her, bringing me comfort when my grandparents died and cheering me up when I am blue.  All this was “unseen” to me in my pre-pet days.  It’s very likely that I would have lived my life perfectly happy without a pet, not knowing what I was missing.  But my life was surely worse off for it.  I just didn’t know it.  If someone had passed a pet ban, the quality of my pre-pet life wouldn’t necessarily have changed.

But the opportunity for my life to improve with a pet was gone forever.

This lost opportunity is the “unseen” effect Bastiat often talks about.  When regulations or rules are implemented*, they destroy certain opportunities; even if there are no seen negative consequences, there are lost potential opportunities.  Failure to account for these, or to even discuss them, is simply poor economics.

*None of this is to say that all rules should be scrapped because of the unseen effects.  There is the need for some rules, specifically “negative” rules that enforce rights.  What I object to are “positive” rules that compel behavior or prevent the exercise of rights in a peaceful manner.

Tying it Together (Part 3 of 3)

My previous two posts dealt with two seemingly unconnected items: the difficulty of advocating liberty at all times and different forms of pacifism.  But there is a common theme here, namely what I believe to be the chief tenets of liberalism (using, of course, the classical sense of the word as opposed to its modern use).

Liberalism is the recognition and defense of rights for all people, not just those who share one’s beliefs or occupy a certain plot of land.  It is also the recognition that violence should be used only in self-defense of life, property, and liberty.  These are the values that made America a great idea* and will make America great again.

Unfortunately, the simple ideas of peace, justice, and freedom are under assault in this country from all sides.  Both major political parties’ candidates for President have been openly hostile to the ideals of classical liberalism.  There are members of Congress who complain due process is too strong in this country.  There are members of Congress (and both major-party presidential candidates) who want the power to sue or silence anyone who disagrees with them.  Indeed, these are dangerous times for the classical liberal.

Fear, I suspect, is the major driving force behind this illiberal movement.  Trump is capitalizing on fear of foreigners and terrorists.  Clinton is capitalizing on fears of guns and foreigners and of Trump.  Fear makes people scramble for any sense of security and the power-hungry types are all to willing to throw people in metaphorical jail (for their own safety, of course).

That is why the tenets of classical liberalism are so powerful and foster peace rather than war the way modern liberalism and conservatism do: they discourage, and indeed even resist, fear.  But fear is a powerful emotion, and as we have seen, it can override everything else.

But this storm, too, shall pass.  Classical liberalism may die out in America, as it did in Britain and Europe, but it shall spring up in somewhere else.  And that’s the glory of it: unlike fear, which is a fleeting thing, liberalism is a steady idea, built upon a foundation of rock and not of sand.  Liberalism has survives the Communists, the fascists, the monarchs, and all other forms of totalitarianism that has risen and fallen.  It will survive this, too.

*I say “idea” because there are many times, even when the founding fathers ran this country, they did not live up to those ideals.

Views of Pacifism in the Star Wars Universe (Part 2 of 3)

One of the things I’ve enjoyed about the TV versions of Star Wars (both Cartoon Network’s The Clone Wars and Disney’s Rebels) is their exploration of the moral consequences of war and rebellion.  I could write an entire book on the different aspects they bring up and how the various characters deal with them.  For nominally kid’s shows, they deal with surprisingly adult topics.

One of the topics they discuss is pacifism.  This is very obvious in the Clone Wars series, which is where my focus will be today (to save time, I will not be recapping major plot points or background information except what is absolutely necessary.  Please follow this link to a more detailed description of the Clone Wars).

Resistance is Futile

In the first season of Clone Wars, Anakin Skywalker, his Padawan (apprentice) Ashoka Tano, and their detachment of Clone troopers crash on the planet Maridun.  Anakin is injured and they find a village of natives called the Lurmen.  Wishing to remain out of the conflict between the Galactic Republic and the Confederation of Independent Systems (CIS), the Lurmen initially refuse to even grant Anakin medical care (although they eventually do). Shortly thereafter, a CIS recon force lands and, (unaware of the Republic’s presence), make their way to the Lurmen village, proclaim the Lurmen are under the protection of the CIS, and station troops on the planet, all over the objections of the Lurmen.  However, the Lurmen leader refuses to fight at all, believing any form of violence is immoral.  He acquiesces to the CIS demands, declaring (in a very Chamberlain-esque manner) that he has secured peace for his village.  The leader’s son objects to his deal, asking pointedly “Peace for now, but for how long?”  Eventually, the CIS leader returns and tries to test a new weapon on the Lurmen village.  The Republic forces stop him.

Defense is the Best Offense

In the second season of Clone Wars, Republic Jedi Obi-Wan Kenobi is dispatched to the planet Mandalore to explore a terrorist plot by a group called Death Watch to overthrow the pacifist government lead by Dutchess Satine Kryze.  Mandalore was once a planet full of warriors who often was a thorn in the side of the Republic.  However, after a particularly brutal civil war, the Mandalorians renounced their warrior ways and instead embraced pacifism.  During the time of the Clone Wars, Mandalore is a neutral planet.

Satine meets with Obi-Wan and assures him the threat of the Death Watch is well-contained.  However, the Republic still wants to land troops to maintain the planet’s neutrality, a plan the Duchess compares to an occupation.

On a trip to Coruscant (the Galactic Republic’s capital) to beg the Senate not to land troops, she faces several assassination attempts and ably defends herself from them with the help of Kenobi.  Kenobi is impressed by her fighting skills and asks why he trained for war if she is a pacifist.  She replies “just because I am a pacifist doesn’t mean I won’t defend myself!”

The Styles of Pacifism

The preceding sections, show the two main styles of thought in pacifism: 1) violence of any kind is abhorrent. ‘Tis better to be a peaceful slave than a chaotic freeman (the Lurmen), and 2) The goal is to avoid conflict, but self-defense is permitted (Duchess Satine).

Duchess Satine’s version of pacifism is more realistic than the Lurmen’s.  It is the form of pacifism I practice myself: try to avoid conflict, but do not be afraid to defend yourself should conflict arise.  Unfortunately, there will always be those who want conflict with you or who want take your property, either “for your own good” or simply because they think they are entitled to it.  You have the right to your property, but if you are unwilling to defend said right, it’s not worth much.

The Eternal Struggle (Part 1 of 3)

In the Gospel of Mark, Jesus Christ says:

“[A]nd you shall love the Lord your God with all your heart and with all your soul and with all your mind and with all your strength. The second is this: love your neighbor as yourself. No other commandment is greater than these.”

Gospel of Mark, Chapter 12, Verses 30-31

With these two verses, Jesus summarizes the Jewish Law.  All of the rules of Christianity and all the teachings of Jesus are found in these two verses.  And it is within these two verses that the extraordinary difficulty of Christian living is found.

These teachings are difficult not in their context but in what they require: love.  Love is easy to give when it is reciprocated.  it is much more difficult to give when it is not. Because of this, many Christians (myself included), fail in this task.  Defending someone who means you harm is very difficult to do.

This is the exact same case in the eternal struggle for liberty.  Just as Christianity requires us to love your neighbor and pray for your enemies, so does the fight for liberty require us to fight for the liberty of all, even those who wish to mean us harm.  The fight for liberty means defending the rights of Neo-Nazis to march in a Jewish town just as much as defending the rights of a scientist to circulate his literature.  It means defending the rights of a business owner to refuse to bake a cake for a gay wedding as much as defending the right of a black person to open a business free of harassment.  It means defending the rights of a Mexican to move to America as much as defending the rights of a New Hampshirian to become a Virginian.  It means defending the rights of a terrorist as much as defending the rights of a falsely accused man.

Unfortunately, this uniform defense of rights often gets us painted with some pretty horrible brushes.  As Christ was pained as a criminal and traitor for preaching the Kingdom of God is open to all, including the tax collectors and prostitutes, so are we labeled Nazis or White Supremacists for defending the rights of Nazis or White Supremacists. Unfortunately, this overly broad characteristic leads to many misunderstandings and scares many people away from fighting for liberty.  There are also those who violate the commandments of liberty and fight only for their liberty while denying others theirs.

I write this post under the shadow of another mass killing in France.  Within hours of the attack, there were those who, nominally under the guise of liberty, began attacking the rights of the innocent and calling for more and more oppression of the Muslims in Europe and America.  They use this tragedy to reduce liberty and they forget that liberty is for all.

I understand the temptation.  It is in times like this where the fight for liberty becomes difficult.  It’s easy to oppress.  It’s hard to love.  But this world doesn’t need more hatred, more violence, more oppression.  It needs liberty.

The fight for liberty is not for the weak-willed or cowardly.  It is a long and difficult battle, one waged since the beginning of time.  But it is one we shall continue to fight for all.

Part 2 will come later today or tomorrow

Donald Trump is Not the Problem

There’s a lot of fear and trepidation of a Trump Presidency, especially from those on the Left.  The fear is understandable: he is a horrid, self-centered, egomaniacal, ruthless, cowardly human being.  In other words, the exact person who will do well in politics.

But here’s the thing with Trump: nothing, and I mean nothing, that he’s proposed, whether as serious policy or as campaign rhetoric, is unprecedented in the United States.  Some of his proposals are fairly old, some are more new, but none are unprecedented.

His scheme to round up Muslims?  Just look at FDR’s Executive Order 1066 that created the Japanese Internment Camps.

His schemes to create trade wars and enact massive tariffs?  Well, examples are rife throughout US history, not the least of which is Smoot-Hawley.

Building a wall to keep out immigrants?  One need look only to Warren Harding and the Progressive Party of the early 20th Century to find cases there of severely limiting immigration.

Eliminate due process for citizens on a secret government list?  The Democratic Party just held a sit-in for exactly that power a few weeks ago.

Give the government power to prosecute reporters and groups for reporting “false” information about the government?  The Democrats are, as I write this, calling for this exact power.

Trump isn’t asking for vast, new powers to himself.  In this way, he is very much unlike Hitler.  Instead, Trump would simply use existing powers, created by Republicans and Democrats alike, to accomplish his goal to make America “great” again.

And that’s the ultimate fear, isn’t it?  That someone not on “your” team would use the power the government has against you or your team.  Hillary Clinton expressed this exact fear (by the way, this would be another thing Trump could do and just point to the precedence set by Barack Obama).

But this fear gets the problem exactly backwards.  It doesn’t matter who is in the seat of power; what matters is that such powers exist.  The only reason a Trump Presidency is frightening to the Left (and many Americans) is because of the vast power he would wield as President as established by his predecessors.  If the powers of the Federal Government were limited, as classical liberals want and the Constitution intended, then it wouldn’t matter who was President or what their personality was.

The problem isn’t Trump (or Clinton or Sanders or Cotton or Cruz or…).  The problem is the power that exists.  So long as it exists, good men will shy away and the corrupt will be attracted to it.  As H.L. Mencken once wrote:

As democracy is perfected, the office of president represents, more and more closely, the inner soul of the people. On some great and glorious day the plain folks of the land will reach their heart’s desire at last and the White House will be adorned by a downright moron.

I fear we are at that point.

With Respect to Mark Twain

In a larger article over at Reason, Shikha Dalmia presents commentary by Cato’s Dan Ikenson on America’s manufacturing sector:

Cato Institute’s Dan Ikenson notes that by all relevant metrics—output, value added, revenues, exports, imports, investment, R&D expenditures—U.S. manufacturing remains a global powerhouse. It attracts $1 trillion in foreign direct investments, the highest in the world, and more than double what China’s manufacturing sector attracts. The auto industry alone (which Trump keeps threatening with punishing fines if it moves any operations to Mexico) has seen vehicle production more than double from 5.7 million in 2009 to 12 million by 2015. The U.S. exported over 2.1 million cars in 2014, becoming the third largest auto exporter after Germany and Japan, with Mexico as a distant seventh.

Reports of American Manufacturing’s death are greatly exaggerated.

No, Open Borders are Not A Unique Threat

Economically speaking, there are four main resources: land, labor, capital, and entrepreneurial spirit (this last one is debatable, but that’s a conversation for another time). These resources are used in conjunction with one another to produce economic growth. But they are inanimate resources. They are owned by humans but are not human in and of themselves.

This sounds like an obvious point, so why do I say it?  Because I often hear the argument (and I am paraphrasing here) “Open borders [that is, free trade in labor] is distinctly different from free trade [that is, free trade in goods/services] because labor votes and goods/services don’t!”

Such a statement is a fundamental misunderstanding of the difference between ownership and a resource itself.  Labor does not vote.  The owner of labor (the one selling it) does vote*.  Just like capital does not vote.  The owner of capital votes.

Often times, the above statement is used for a reason why we can’t have open borders.  For some reason, opening the borders threaten free markets.  But this threat is not unique to open borders.  The owners of capital can be a threat to free markets, too.  Did not the owners of Ford, GM, Chrysler lobby for bailouts and special protection?  Did not US steel makers lobby for tariffs on imported steel?  Did not sugar companies lobby for subsidies? Do not private corporations like Planned Parenthood demand support from the government? The list goes on and on.  The owners of capital are voters, too, and they too can be swayed into demanding protection for their business from foreign competition and will try to expand the power of the state.

There is no unique threat from importing labor (that is, immigration) that is not present in importing goods/services.

Does the threat of competition make our jobs harder?  Oh yes.  But so does free speech.  If we just pick and choose what classical liberal values to defend in order to make our jobs easier, then we will quickly become hypocrites and scoundrels.

*For the sake of discussion, I’m not going to go into caveats like “Not all foreign laborers become citizens who vote,” and “Not all voters do vote.”