Lies About Free Trade. . . and the Lying Liars Who Tell Them

Former Senior Fellow

Any politician who opposes free trade—and that includes every current candidate for U.S. President—is against the best interests of the people and wildlife on this planet.

Oh, they'll claim to be "protecting jobs;" or, "keeping America's small farmers on their farms." But the arguments against free trade are fundamentally lies.

Britain's colonial trade regulations forced the American colonies to buy British manufactures instead of building their own workshops. Northern factory owners helped spark the Civil War, by demanding high tariffs that kept Southern farmers from buying British tools.

The U.S. Congress passed the punitive Smoot-Hawley tariffs in 1930, to "protect" American jobs. In the ensuing global tariff war, almost every American job that depended on exports or imported raw materials disappeared. Smoot-Hawley turned a short-term stock market slump into a decade-long Great Depression, with millions of American ex-workers and ex-farmers wandering the streets.

Germany's Depression unemployment was even worse than ours. The desperate Germans turned to Hitler, started World War II—and war industries finally put Americans back to work.

Supposedly, Smoot-Hawley taught us our free trade lesson. After World War II, we set up the General Agreement on Tariffs and Trade to encourage global free trade. That launched the surge that has been making the whole world richer, more secure, and more peaceful ever since (and doubled our own prosperity).

Free trade even scuttled the Communist empire because central planning couldn't keep up.

President Clinton understood that, if NAFTA didn't create more jobs in Mexico, the Mexicans would all come north.

But political lessons are like Chinese food; the hunger for votes quickly returns.

President Bush no sooner entered the Oval Office than he violated trade agreements to slap tariffs on imported steel-forcing up the costs of any American industry that needed steel and raising consumer prices for anything that contained the metal.

Candidate Kerry and former candidate Edwards say they'll prevent jobs from leaving the United States; they don't say how. Has anybody noticed that the current jobs in Massachusetts and South Carolina (making computers, high-tech medical devices, and BMWs, for example) pay much better than the textile mills that moved overseas?

Trade barriers always protect yesterday's worst jobs, instead of helping our work force re-tool and re-educate for better ones in emerging industries. Protectionism has long been called a "beggar-thy-neighbor" policy, but protectionism beggars its own people too.

Now, the White House is negotiating a "free trade agreement" with Australia. But the President says we can't let in Aussie sugar.

American sugar costs twice as much to grow. Our sugarcane is grown in Florida and Louisiana, where the field runoff pollute the Everglades and Mississippi Delta wetlands. Our sugar farmers don't even profit much from the subsidy because their costs are so high.

Meanwhile, America has lost tens of thousands of candy-making jobs, because U.S. candy makers are forced to overpay for sugar. Fortunately, candy-making is now creating some jobs in Mexico, which can grow cane sugar efficiently in its tropic regions. NAFTA lets the candy into the United States.

Remember this secret: low costs (and thus low prices) create jobs. When Henry Ford created the cheap Model T, he put cars within the reach of everyman, and the auto industry became a mighty job-creating force. The early big main-frame computers may have destroyed more jobs than they created. But personal computers are creating new products, new services, and huge numbers of jobs—here, in India, and around the world, outsourcing or not. Low costs turned clothing into recreation, and created a global surge of jobs in clothing design, production, and retailing.

Productivity and efficiency not only let people enjoy life and fun clothes, but also give them enough money to invest in environmental protection. The most dangerous places in the world today for birds and mammals are the poor countries where a billion people still try to feed themselves with hunting and slash-and-burn farming.

The next time some politician tells you he'll "protect" you from free trade, tell him to get a real job.