Tariffs- When ‘Free Trade’ Becomes Fake Trade

Tariffs were considered one of the big four by Benjamin Tucker many moons before Trumpian Fake-o-nomics:

“the tariff monopoly, which consists in fostering production at high prices and under unfavorable conditions by visiting with the penalty of taxation those who patronize production at low prices and under favorable conditions. The evil to which this monopoly gives rise might more properly be called misusury than usury, because it compels labor to pay, not exactly for the use of capital, but rather for the misuse of capital. The abolition of this monopoly would result in a great reduction in the prices of all articles taxed, and this saving to the laborers who consume these articles would be another step toward securing to the laborer his natural wage, his entire product. Proudhon admitted, however, that to abolish this monopoly before abolishing the money monopoly would be a cruel and disastrous policy, first, because the evil of scarcity of money, created by the money monopoly, would be intensified by the flow of money out of the country which would be involved in an excess of imports over exports, and, second, because that fraction of the laborers of the country which is now employed in the protected industries would be turned adrift to face starvation without the benefit of the insatiable demand for labor which a competitive money system would create. Free trade in money at home, making money and work abundant, was insisted upon by Proudhon as a prior condition of free trade in goods with foreign countries.”

Said a little differently, and more contemporary:

Let’s get something straight: The capitalist state’s primary function is to serve the long-term interests of the economic ruling class. No capitalist state has ever promoted free trade, and no capitalist state will ever do so. At any given time, the capitalist state adopts a package of intervention and non-intervention that optimally serves the interests of capital. Trump is simply replacing one form of mercantilism with another.

TPP, NAFTA, the Uruguay Round of GATT, and all those other “Free Trade Agreements” don’t reduce protectionism or make trade freer at all. They simply shift state protectionist intervention away from forms that no longer serve the dominant capitalist interests, toward forms that better serve them.

What capitalist governing elites call “free market reform” or “trade liberalisation” is really just the counterpart to what was called “lemon socialism” — i.e., state policies like nationalizing industries that were vital to the functioning of the capitalist system as a whole, but that private capital no longer found sufficiently profitable to operate on their own nickel. Examples included nationalizing centrally important infrastructural industries like railroads, telegraphs, and coal. Socializing the input costs of capitalism — vocational/technical education, R&D, interstate highways, airports, supporting the surplus population rendered obsolete by capitalism, etc. — is, as James O’Connor pointed out (The Fiscal Crisis of the State) a basic function of the capitalist state.

Lemon “free market reform” or “free trade” does just the opposite. The state ceases to perform a function that no longer serves the interests of big business. Kevin Carson- On Lemon “Free Trade”

Trump has waved the stick of tariffs, or squeezed some lemons, recently. It’s understandable if we think of him as the Fascist that he is.

where Communism seeks to substitute the state for private ownership, fascism seeks to incorporate or co-opt private ownership into the state apparatus through public-private partnership. [Tariffs do just that, and of course more sales, if not American jobs, means more taxes, means a bigger state apparatus.]

Thus fascism tends to be more tempting than Communism to wealthy interests who may see it as a way to insulate their economic power from competition through forced cartelization and other corporatist stratagems. [A means to thwart or side-step so-called “free trade,” for “Fake Trade.”] Second, where Communist ideology tends to be cosmopolitan and internationalist, fascist ideology tends to be chauvinistically nationalist, stressing a particularist allegiance to one’s country, culture, or ethnicity; along with this goes a suspicion of rationalism, a preference for economic autarky, and a view of life as one of inevitable but glorious struggle. [Insert belligerent off-the-cuff Trumpian Fake News Tweet here_________.] Fascism also tends to cultivate a “folksy” or völkisch “man of the people,” “pragmatism over principles,” “heart over head,” “pay no attention to those pointy-headed intellectuals” rhetorical style. [Make America What Again? Fake.]

These contrasts with Communism should not be overstated, of course. Communist governments cannot afford to suppress private ownership entirely, since doing so leads swiftly to economic collapse. Moreover, however internationalist and cosmopolitan Communist regimes may be in theory, they tend to be just as chauvinistically nationalist in practice as their fascist cousins; while on the other hand fascist regimes are sometimes perfectly willing to pay lip service to liberal universalism. All the same, there is a difference in emphasis and in strategy between fascism and Communism here. When faced with existing institutions that threaten the power of the state — be they corporations, churches, the family, tradition — the Communist impulse is by and large to abolish them, while the fascist impulse is by and large to absorb them. [or give them protection, credits and/or subsidies with neo-mercantilism]

Power structures external to the state are potential rivals to the state’s own power, and so states always have some reason to seek their abolition; Communism gives that tendency full rein. But power structures external to the state are also potential allies of the state, particularly if they serve to encourage habits of subordination and regimentation in the populace, and so the potential always exists for a mutually beneficial partnership; herein lies the fascist strategy. [and as stated earlier, without taxes, or outright theft, there is no state]

The respects in which fascism differs from Communism might seem to align it rather more closely with the traditional aristocratic conservatism of the ancient régime, which is likewise particularist, corporatist, mercantilist, nationalist, militarist, patriarchal, and anti-rationalist. But fascism differs from old-style conservatism in embracing an ideal of industrial progress directed by managerial technocrats, as well as in adopting a populist stance of championing the “little guy” against elites — remember the folksiness. (If fascism’s technocratic tendencies appear to conflict with its anti-rationalist tendencies, well, in the words of proto-fascist Moeller van den Bruck, “we must be strong enough to live in contradictions.”) [and what is a tariff if not a contradiction to “free” trade, but of course Trump, Musk, Bezos, Gates, Zuckerberg and other elites certainly don’t want free trade, and certainly not freed trade.]

We can debate how fascist or pre-fascist Trump is, or if Trumpism is Fascism, but more importantly, he’s doing damage, not the least of which is tariffs. Regardless, one thing is certain:

…Fascism and leftism belong in fundamentally different categories, because the essence of fascism was, and is, anti-leftism.

While historians certainly debate the details, they all agree with this basic precept about the core of fascism. An eminent fascism scholar, Robert Paxton, has even characterized that nature in a single phrase. Fascism, he wrote, is “dictatorship against the Left amidst popular enthusiasm.” John Broich- There is nothing liberal about fascism

Libertarianism is rooted in anti-fascism, if not anti-militarism, and they saw it coming. Is what we see now with Trump Fascism, or heading that way? He certainly wants to spend “billions” more on the state socialist operation known as the military.

[M]ilitarism, expansion and imperialism will all favor plutocracy. In the first place, war and expansion will favor jobbery, both in the dependencies and at home. In the second place, they will take away the attention of the people from what the plutocrats are doing. In the third place, they will cause large expenditures of the people’s money, the return for which will not go into the treasury, but into the hands of a few schemers. In the fourth place, they will call for a large public debt and taxes, and these things especially tend to make men unequal, because any social burdens bear more heavily on the weak than on the strong, and so make the weak weaker and the strong stronger. Conquest of the United States by Spain- William Graham Sumner

The invisible hand is moving the shell around and we are being gamed.

When the government directs investment (no matter the method), it diverts labor and resources that would have gone to satisfying consumer preferences. Politicians are in no position to know how best to make such determinations. Their criteria will be irrelevant, and hence their decisions will leave us worse off. But favored interests will flourish (for a while).

We don’t have a free market today, of course, but that is no reason to move even further from the ideal through executive discretion over the economic decision-making. We have no grounds to believe that Trump or any government bureau could selectively intervene in order to accomplish what the free market would have accomplished. Sheldon Richman- Trump, Carrier, and the Corporate State

in a freed economy no one person or group would control the market forces (the law of supply and demand, and so on) to which we all must adjust as we carry out our plans. That would seem to impinge on our autonomy. But these forces are called impersonal precisely because they are not the product of any single will or directed at any chosen objective. Rather the term market forces simply refers to the spontaneous, orderly, and essential process (the price system) generated by other people’s freedom to choose what to buy and sell. In other words, each individual’s autonomy is bounded by each other individual’s autonomy. While we all must take prices and other people’s choices into account as we make our plans, we each have great leeway in the marketplace through which we can minimize our vulnerability to the arbitrary will of others. If one person won’t deal with you, someone else most likely will, so the prospect of being victimized by, say, invidious discrimination shrinks. (“Money talks.”) Thus the maximum degree of individual autonomy is fully compatible with life in the marketplace, especially as the extent of the market expands. (Of course this is not to suggest that all of life is lived in the marketplace.)

The market is not only compatible with autonomy, it also essential to it. In contrast to the market, Wolfe’s alternative, the State, uses force (or the threat thereof) to work its will. If you don’t like what one set of politicians decrees, you can’t simply select another. And there’s no opting out. There is an inequality of authority.

…If the alternative we face is between grappling with market forces and trusting a ruling elite to orchestrate just social outcomes, anyone concerned with autonomy and equality should choose the market. A benevolent, peaceful State is not on the menu. Sheldon Richman- Market, State, and Autonomy, Who is the true liberal?