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Imprimis, On Line -- February, 1993
Imprimis, meaning "in the first place," is a free
monthly publication of Hillsdale College (circulation
435,000 worldwide). Hillsdale College is a liberal arts
institution known for its defense of free market
principles and Western culture and its nearly 150-year
refusal to accept federal funds. Imprimis publishes
lectures by such well-known figures as Ronald Reagan,
Jeane Kirkpatrick, Tom Wolfe, Charlton Heston, and many
more. Permission to reprint is hereby granted, provided
credit is given to Hillsdale College. Copyright 1992.
For more information on free print subscriptions or
back issues, call 1-800-437-2268, or 1-517-439-1524,
ext. 2319.
---------------------------------------------
"Free Trade in the 1990s"
---------------------------------------------
Volume 22, Number 2
Hillsdale College, Hillsdale,
Michigan 49242 February 1993
---------------------------------------------
Preview: The 19th annual Ludwig von Mises Lecture
Series at Hillsdale College was held in the spring of
1992, just as the issue of free trade was again
becoming a headline issue in American politics. The
benefits of a free global economy are egalitarian; it
is true that "a rising tide lifts all boats." Free
trade is not, according to the old mercantilist
thinking, some zero sum game in which one nation or one
individual wins at the expense of another. It offers a
higher standard of living for all, dramatically
improved goods and services, and an international
division of labor that makes such goods and services
for the first time affordable even for the poor, while
creating millions of new jobs around the world.
.....Throughout his life, the economist Ludwig von
Mises argued that one of the fundamental causes of war
among nations was economic nationalism. When nations
look upon one another as economic enemies rather than
as potential trading partners, their governments resort
to political and economic intervention, retarding their
own citizens' material well-being and creating
conditions ripe for international tension and conflict.
Free trade and peaceful market competition, Mises
claimed, were the means for both prosperity and peace.
---------------------------------------------
"'Economic Justice' and the Chimera
of Special Interest Politics"
James Bovard Author,
Fair Trade Fraud
Fair trade, as the term is now used, means government
intervention to direct, control, or restrict trade.
Fair trade means government officials dictating what
Americans will be allowed to buy and what prices they
will be forced to pay.
In some areas, America is one of the most
protectionist industrial countries in the world. Our
agricultural import quotas permit each American citizen
to consume the equivalent of only one teaspoon of
foreign ice cream per year, two foreign peanuts per
year, and one pound of imported cheese per year.
Congress is imposing over 8,000 different taxes on
imports. While the average American tariff is now
around five percent, some tariffs are in the
stratosphere. Low-priced watches are hit with an
average tariff of 151.2 percent. Tobacco stems must pay
a 458.3 percent penalty. Tariffs on some low-priced
shoe imports are 67 percent....Our dumping law is so
comprehensive and arbitrary that the Commerce
Department almost automatically convicts 95 percent of
foreign companies....If this is free trade, then
perhaps the federal income tax system is truly helping
Americans by cutting their freedom of choice in how
they spend their paychecks.
---------------------------------------------
"Economic Freedom and a
New Liberal International Order"
Richard M. Ebeling
Ludwig von Mises Chair,
Hillsdale College
In the 19th century, the advocates of economic liberty
and free trade could point to the injustice of a system
that gave privileges to a few, while making the vast
majority bear the burden. This old system of privileges
and protections went against the grain of the new
beliefs in political democracy and equal treatment
before the law.
.....With the spread of the democratic ideal and the
enlargement of the voting franchise, people came to
view government as no longer the master, but rather as
the servant. But the servant for what? For equal
protection before the law and equality in civil
liberties, certainly. But unfortunately in the 20th
century government is increasingly viewed as an agency
that does things for the people, rather than merely
acting as the "nightwatchman" who guards their life,
liberty, and property.
.....What people have increasingly wanted government to
do is: guarantee their jobs and incomes; protect them
from foreign competition and limit the entry of new
competitors at home; assure them "living wages" for
their labor, and "fair" and "reasonable" prices for
their products; protect them from the common mistakes
of everyday life; and relieve them of any
responsibility for the community efforts that would
otherwise demand of them charity and the giving of some
of their free time. And all these guarantees,
protections, and securities are to be provided at
someone else's expense....The Age of Democratized
Privilege has arrived. And with it has also come the
New Protectionism.
---------------------------------------------
"The Technological Revolution:
Destroying Global Economic Barriers"
Richard McKenzie
Professor of Economics,
University of California-Irvine
Author, Quicksilver Capital
Many commentators fear that government regulators have,
and will continue, to run roughshod over our freedom to
trade. In my view, international trade has become freer
over the last several decades, and it will only become,
gradually but relentlessly, even freer as we turn our
attention toward the 21st century...not because
protectionists will ever lose their myopic focus on
narrow self interests (to the detriment of the rest of
society), and certainly not because politicians will
become any more knowledgeable about the benefits of
free and open world trade. (If we had to rely on a
rejuvenation of our political leaders' courage and
intellect, we would surely despair.)
.....Rather, the politicians and policymakers will be
brought, kicking and screaming, to freer trade, unaware
that their growing impotency to cater to
protectionists' appeals will be the result of
reinvorated technological and economic forces that are
far beyond the power of government to control....
.....Today, technology permits people and their capital
to be far more fugitive, far more capable of bounding
over government borders, far more like quicksilver --
slippery, elusive, and hard to contain and control.
---------------------------------------------
"A Monetary System for the Global Economy"
Judy Shelton
Senior Research Fellow,
Hoover Institution
Author, The Coming Soviet Crash
We live in a world where the prices of internationally-
traded goods are subject to the negotiating tactics of
a clique of nations who rig the currency markets as
they see fit. The value of the dollar or the yen or the
deutsche mark is not determined by natural market
forces so much as by the ability of government
officials from the United States, Japan, and Germany to
politically and economically intimidate each other and
the other players in the world....
We should not permit our finance officials to
collude with other nations to manipulate the dollar
exchange rate against Japan whenever Washington decides
that Japanese-made goods are becoming too popular with
American consumers. Why should we cede to government
the right to spend untold sums in order to, in the
parlance of the finance ministers, make "corrections"
in the currency markets whenever officials deem it
politically useful?
The only proper foundation for an open world
economy dedicated to free trade is sound money based on
a universal standard of value that transcends the
threat of protectionist devaluations.
---------------------------------------------
"An Open Letter to the President:
Free Trade Works"
Dick Armey
U.S. House of Representatives (R-TX)
Adam Smith virtually invented the discipline of
economics in 1776 with the publication of his
monumental treatise known today as The Wealth of
Nations. The same year saw the birth of the greatest
free market experiment in the history of the world -
the United States. Here was proof that freedom works.
.....It is important to note that Smith wrote in
reaction against mercantilism -- the practice of trying
to "create" wealth for a nation by restricting trade.
Smith argued that only when individuals are allowed
free exchange is real wealth created, and "what is wise
and prudent in the affairs of individuals can scarcely
be folly for nations." Later another classical
economist, David Ricardo, refined Smith's argument by
developing the principle of "comparative advantage."
The lesson of this principle is just as individuals
have differing talents and levels of productivity, so
do industries and so do nations. No nation can have a
comparative advantage in every industry. So it follows
that every nation will prosper by exporting some goods
and importing others. And this specialization works to
the benefit of all nations.
.....Armey's Admonition #1: Know that euphemisms for
restricting trade are created by those who benefit from
restrictions.
.....Armey's Admonition #2: Be skeptical of gloomy
prognostications from people who are in the business of
peddling more government.
.....Armey's Admonition #3: Beware those who
manufacture data for the sake of promoting an agenda.
.....Armey's Admonition #4: Never underestimate the
ability of Washington to perceive the opposite of what
is actually happening and to conjure up the data to
support its perception.
.....Armey's Admonition #5: Governments punish success
and reward failure.
###
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End of this issue of Imprimis, On Line; Information
about the electronic publisher, Applied Foresight,
Inc., is in the file, IMPR_BY.TXT
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