29 June 2016

'Republican orthodoxy' on trade is neither grand nor old

The Washington Post headlined its report on Donald Trump's speech on trade yesterday by stating that the presumptive Republican presidential nominee was "Defying Republican orthodoxy" by promoting a protectionist "America first" trade policy. Trump has objected to Post headlines recently for misrepresenting him, but I'm not sure whether this one bothered him, since it's hard to tell whether he or the Post reporter knew that "Republican orthodoxy" on this particular subject is really a fairly recent thing. From the time of its founding in the 1850s until the middle of the 20th century, the GOP was the party of protectionism in an era when trade policy was often the defining issue in national elections, if not the issue that defined the parties themselves. Until the advent of the federal income tax, tariffs were the federal government's primary source of revenue. Democrats, then the party of fiscal conservatism and limited government, believed that tariffs should be imposed for revenue only, and then only to meet the most self-evident needs of government. Republicans, competing with Democrats to be recognized as the party of the working man, equated protective tariffs with more and better paying jobs, while the Democrats, appealing to underpaid workers, questioned whether anyone but the bosses and their financial backers benefited from higher prices for everything.

Something changed after the Great Depression and World War II. Pat Buchanan traces the Republican turn toward free trade on three phenomena: a historical narrative that blames protectionist measures like the infamous Smoot-Hawley Tariff for turning the stock market panic of 1929 into a great depression; a nebulous bipartisan "one-worldism;" and a libertarian ideology Buchanan traces back to John Stuart Mill and identifies currently with Speaker Ryan, whom the columnist advises to "read more history and less Ayn Rand." I'd add a fourth factor: a consumerist ethos that asserts that Americans' right as consumers to the lowest possible prices trump any right of American workers to their jobs. We could argue for a fifth element: Republicans' increasing identification of protectionism with labor unions whose power they wanted to break. Part of the right-wing argument for free trade assumes that protected, privileged businesses and their workers, immunized by tariffs from accountability to the market, are licensed to overcharge consumers for increasingly shoddy goods. Free trade theoretically benefited the consumer -- an abstract figure whose sources of income are irrelevant to the discussion -- while undermining union workers' job security by undermining their employers' market security.  Whatever its sources, in the 21st century this modern orthodoxy is being challenged from the right, dating back to Buchanan's own quixotic presidential campaign and continuing with Trump's, and from the left, through Sen. Sanders' failed crusade against Hillary Clinton. Trump apparently hopes that by emphasizing the trade issue he can win over Sanders supporters who may otherwise be repulsed by his personality or overall worldview. Like his Republican predecessors of old, Trump promotes protectionism as a champion of capitalism. It doesn't seem contradictory to him for the state to be an actor in the capitalist market, using its influence to favor its citizen workers and entrepreneurs. It's open to question, however, whether any 21st century capitalist can argue for giving producers priority over consumers, since the entire global capitalist economy seems to depend on impulsive consumer spending in a market of limitless choices. It will be a challenge for a candidate of either right or left to tell American consumers in particular that they perhaps should do without some choices and pay more for things for the sake of fellow citizens. It might be a particularly hard sell for someone like Trump who presumably knows no limit on his own consumer choices. You know what probably could have helped him sell the idea? A strong, mass labor movement like we used to have before Republicans had their way with the country. Perhaps Trump will mention this to the party when he consummates his hostile takeover in Cleveland.

1 comment:

Anonymous said...

It all depends on whether tRump takes his motto literally, or whether he interprets it to mean "Make individual Americans wealthier at the expense of the rest." "America" denotes the entirety, encompassing ALL citizens. Which would mean any policy has to benefit us all, not just the "1%" (Although I'd guess its more like 20%, when you take into account the collaborators.)