Author Topic: What is so "American" about penalizing and discouraging commerce?  (Read 2250 times)

SingleTax

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If the "production" of wealth is such a good thing, then why is the unrestricted exchange of wealth between buyers and sellers such a bad thing?

And if using the power of taxation to penalize commerce is inherently "American," then why did the authors of the U.S. Constitution prohibit protective tariffs between the states?

Keep those two questions in mind while reading the following excerpt from Protection or Free Trade (pp. 13-22) by Henry George:

For the first half century of our national existence American protectionists pointed to the protective tariff of Great Britain as an example to be followed; but since that country, in 1846, discarded protection, its American advocates have endeavored to utilize national prejudice by constantly speaking of protection as an American system and of free trade as a British invention. Just now they are endeavoring to utilize in the same way the enmity against everything British which long oppressions and insults have engendered in the Irish heart, and, in the words of a recent political platform, Irish-Americans are called upon "to resist the introduction into America of the English theory of free trade, which has been so successfully used as a means to destroy the industries and oppress the people of Ireland."

Even if free trade had originated in Great Britain we should be as foolish in rejecting it on that account as we should be in refusing to speak our mother tongue because it is of British origin, or in going back to hand and water power because steam engines were first introduced in Great Britain. But, in truth, free trade no more originated in Great Britain than did the habit of walking on the feet. Free trade is the natural trade—the trade that goes on in the absence of artificial restrictions. It is protection that had to be invented. But instead of being invented in the United States, it was in full force in Great Britain long before the United States were thought of. It would be nearer the truth to say that protection originated in Great Britain, for, if the system did not originate there, it was fully developed there, and it is from that country that it has been derived by us. Nor yet did the reaction against it originate in Great Britain, but in France, among a school of eminent men headed by Quesnay, who were Adam Smith's predecessors and in many things his teachers. These French economists were what neither Smith nor any subsequent British economist or statesman has been—true free traders. They wished to sweep away not merely protective duties, but all taxes, direct and indirect, save a single tax upon land values. This logical conclusion of free-trade principles the so-called British free traders have shirked, and it meets today as bitter opposition from the Cobden Club as from American protectionists. The only sense in which we can properly speak of "British free trade" is the same sense in which we speak of a certain imitation metal as "German silver." "British free trade" is spurious free trade. Great Britain does not really enjoy free trade. To say nothing of internal taxes, inconsistent with true free trade, she still maintains a cordon of custom-house officers, coast guards and baggage searchers, and still collects over a hundred million dollars of her revenue from import duties. To be sure, her tariff is "for revenue only," but a tariff for revenue only is not free trade. The ruling classes of Great Britain have adopted only so much free trade as suits their class interests, and the battle for free trade in that country has yet to be fought.

On the other hand, it is absurd to talk of protection as an American system. It had been fully developed in Europe before the American colonies were planted, and during our colonial period England maintained a more thorough system of protection than now anywhere exists—a system which aimed at building up English industries not merely by protective duties, but by the repression of like industries in Ireland and the colonies, and wherever else throughout the world English power could be exerted. What we got of protection was the wrong side of it, in regulations intended to prevent American industries from competing with those of the mother country and to give to her a monopoly of the American trade.

The irritation produced in the growing colonies by these restrictions was the main cause of the revolution which made of them an independent nation. Protectionist ideas were doubtless at that time latent among our people, for they permeated the mental atmosphere of the civilized world, but so little disposition was there to embody those ideas in a national policy, that the American representatives in negotiating the treaty of peace endeavored to secure complete freedom of trade between the United States and Great Britain. This was refused by England, then and for a long time afterward completely dominated by protective ideas. But during the period following the revolution in which the American Union existed during the Articles of Confederation, no tariff hampered importations into the American States.

The adoption of the Constitution made a Federal tariff possible, and to give the Federal Government an independent revenue a tariff was soon imposed; but although protection had then begun to find advocates in the United States, this first American tariff was almost nominal as compared with what the British tariff was then or our tariff is now. And in the Federal Constitution state tariffs were prohibited—a step which has resulted in giving to the principle of free trade the greatest extension it has had in modern times. Nothing could more clearly show how far the American people then were from accepting the theories of protection since popularized among them, for the national idea had not then acquired the force it has since gained, and if protection had then been looked upon as necessary the different States would not without a struggle have given up the power of imposing tariffs of their own.

Nor could protection have reached its present height in the United States but for the civil war. While attention was concentrated on the struggle and mothers were sending their sons to the battle-field, the interests that sought protection took advantage of the patriotism that was ready for any sacrifice to secure protective taxes such as had never before been dreamed of—taxes which they have ever since managed to keep in force, and even in many cases to increase.

The truth is that protection is no more American than is the distinction made in our regular army and navy between commissioned officers and enlisted men—a distinction not of degree but of kind, so that there is between the highest non-commissioned officer and the lowest commissioned officer a deep gulf fixed, a gulf which can only be likened to that which exists between white and black where the color-line is drawn sharpest. This distinction is historically a survival of that made in the armies of aristocratic Europe, when they were officered by nobles and recruited from peasants, and has been copied by us in the same spirit of imitation that has led us to copy other undemocratic customs and institutions. Though we preserve this aristocratic distinction after it has been abandoned in some European countries, it is in no sense American. It neither originated with us nor does it consort with our distinctive ideas and institutions. So it is with protection. Whatever be its economic merits there can be no doubt that it conflicts with those ideas of natural right and personal freedom which received national expression in the establishment of the American Republic, and which we have been accustomed to regard as distinctively American. What more incongruous than the administering of custom-house oaths and the searching of trunks and hand-bags under the shadow of "Liberty Enlightening the World?"

As for the assertion that "the English theory of free trade" has been used "to destroy the industries and oppress the people of Ireland," the truth is that it was "the English theory of protection" that was so used. The restrictions which British protection imposed upon the American colonies were trivial as compared with those imposed upon Ireland. The successful resistance of the colonies roused in Ireland the same spirit, and led to the great movement of "Irish Volunteers," who, with cannon bearing the inscription "Free Trade or——!" forced the repeal of those restrictions and won for a time Irish legislative independence.

Whether Irish industries that were unquestionably hampered and throttled by British protection could now be benefited by Irish protection, like the question whether protection benefits the United States, is only to be settled by a determination of the effects of protection upon the country that imposes it. But without going into that, it is evident that the free trade between Great Britain and Ireland which has existed since the union in 1801, has not been the cause of the backwardness of Irish industry. There is one part of Ireland which has enjoyed comparative prosperity and in which important industries have grown up—some of them, such as the building of iron ships, for which natural advantages cannot be claimed. How can this be explained on the theory that Irish industries cannot be reestablished without protection?

If the very men who are now trying to persuade Irish-American voters that Ireland has been impoverished by "British free trade" were privately asked the cause of the greater prosperity of Ulster over other parts of Ireland, they would probably give the answer made familiar by religious bigotry—that Ulster is enterprising and prosperous because it is Protestant, while the rest of Ireland is sluggish and poor because it is Catholic. But the true reason is plain. It is, that the land tenure in Ulster has been such that a larger portion of the wealth produced has been left there than in other parts of Ireland, and that the mass of the people have not been so remorsely hunted and oppressed. In Presbyterian Skye the same general poverty, the same primitive conditions of industry exist as in Catholic Connemara, and its cause is to be seen in the same rapacious system of landlordism which has carried off the fruits of industry and prevented the accumulation of capital. To attribute the backwardness of industry among a people who are steadily stripped of all they can produce above a bare living to the want of a protective tariff or to religious opinions is like attributing the sinking of a scuttled ship to the loss of her figurehead or the color of her paint.

What, however, in the United States at least, has tended more than any appeals to national feeling to dispose the masses in favor of protection, has been the difference of attitude toward the working classes assumed by the contending policies. In its beginnings in this country protection was strongest in those sections where labor had the largest opportunities and was held in the highest esteem, while the strength of free trade has been the greatest in the section in which up to the civil war slavery prevailed. The political party which successfully challenged the aggressions of the slave power also declared for a protective tariff, while the men who tried to rend the Union in order to establish a nation based upon the right of capital to own labor, prohibited protection in the constitution they formed. The explanation of these facts is, that in one section of the country there were many industries that could be protected, while in the other section there were few. While American cotton culture was in its earlier stages, Southern cotton planters were willing enough to avail themselves of a heavy duty on India cottons, and Louisiana sugar growers have always been persistent sticklers for protection. But when cotton raised for export became the great staple of the South, protection, in the absence of manufactures, was not only clearly opposed to dominant Southern interests, but assumed the character of a sectional imposition by which the South was taxed for the benefit of the North. This sectional division on the tariff question had no reference whatever to the conditions of labor, but in many minds its effect has been to associate protection with respect for labor and free trade with its enslavement.

Irrespective of this there has been much in the presentation of the two theories to dispose the working classes toward protection and against free trade. Workingmen generally feel that they do not get a fair reward for their labor. They know that what prevents them from successfully demanding higher wages is the competition of others anxious for work, and they are naturally disposed to favor the doctrine or party that proposes to shield them from competition. This, its advocates urge, is the aim of protection. And whatever protection accomplishes, protectionists at least profess regard for the working classes, and proclaim their desire to use the powers of government to raise and maintain wages. Protection, they declare, means the protection of labor. So constantly is this reiterated that many suppose that this is the real derivation of the term, and that "protection" is short for "protection of labor."

On the other hand, the opponents of protection have, for the most part, not only professed no special interest in the well-being of the working classes and no desire to raise wages, but have denied the justice of attempting to use the powers of government for this purpose. The doctrines of free trade have been intertwined with teachings that throw upon the laws of nature responsibility for the poverty of the laboring class, and foster a callous indifference to their sufferings. On the same grounds on which they have condemned legislative interference with commerce, free-trade economists have condemned interference with hours of labor, with the rate of wages, and even with the employment of women and children, and have united protectionism and trades unionism in the same denunciation, proclaiming supply and demand to be the only true and rightful regulator of the price of labor as of the price of pig-iron. While protesting against restrictions upon the production of wealth they have ignored the monstrous injustice of its distribution, and have treated as fair and normal that competition in which human beings, deprived of their natural opportunities of employing themselves, are compelled by biting want, to bid against one another.

All this is true. But it is also true that the needs of labor require more than kind words, and are not to be satisfied by such soft phrases as we address to a horse when we want to catch him that we may put a bit in his mouth and a saddle on his back. Let me ask those who are disposed to regard protection as favorable to the aspirations of labor, to consider whether it can be true that what labor needs is to be protected?

To admit that labor needs protection is to acknowledge its inferiority; it is to acquiesce in an assumption that degrades the workman to the position of a dependent, and leads logically to the claim that the employee is bound to vote in the interest of the employer who provides him with work. There is something in the very word "protection" that ought to make workingmen cautious of accepting anything presented to them under it. The protection of the masses has in all times been the pretense of tyranny—the plea of monarchy, of aristocracy, of special privilege of every kind. The slave owners justified slavery as protecting the slaves. British misrule in Ireland is upheld on the ground that it is for the protection of the Irish. But, whether under a monarchy or under a republic, is there an instance in the history of the world in which the "protection" of the laboring masses has not meant their oppression? The protection that those who have got the law-making power into their hands have given to labor, has at best always been the protection that man gives to cattle—he protects them that he may use and eat them.

There runs through protectionist professions of concern for labor a tone of condescending patronage more insulting to men who feel the true dignity of labor than frankly expressed contempt could be—an assumption that pauperism is the natural condition of labor, to which it must everywhere fall unless benevolently protected. It is never intimated that the landowner or the capitalist needs protection. They, it is always assumed, can take care of themselves. It is only the poor workingman who must be protected.

What is labor that it should so need protection? Is not labor the creator of capital, the producer of all wealth? Is it not the men who labor that feed and clothe all others? Is it not true, as has been said, that the three great orders of society are "workingmen, beggarmen and thieves?" How, then, does it come that workingmen alone need protection? When the first man came upon the earth who was there to protect him or to provide him with employment? Yet whenever or however he came, he must have managed to get a living and raise a family!

When we consider that labor is the producer of all wealth, is it not evident that the impoverishment and dependence of labor are abnormal conditions resulting from restrictions and usurpations, and that instead of accepting protection, what labor should demand is freedom? That those who advocate any extension of freedom choose to go no further than suits their own special purpose is no reason why freedom itself should be distrusted. For years it was held that the assertion of our Declaration of Independence that all men are created equal and endowed by their Creator with unalienable rights, applied only to white men. But this in nowise vitiated the principle. Nor does it vitiate the principle that it is still held to apply only to political rights.

And so, that freedom of trade has been advocated by those who have no sympathy with labor should not prejudice us against it.



SingleTax

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NAFTA and similar trade agreements are the *opposite* of free trade
« Reply #1 on: March 17, 2016, 02:32:14 PM »
The Patriot Act has the term "patriot" in it. Does that mean those who defend or promote the Patriot Act are patriotic, and that those who do the opposite are unpatriotic?



Of course not.

Same principle with the North American "Free Trade" Agreement and all other corporatist trade agreements.

http://www.commondreams.org/views/2006/12/09/about-corporate-managed-trade

'This Is about Corporate-Managed Trade'

by Ralph Nader
Common Dreams
December 09, 2006

After moving the formerly progressive state of Michigan along the road to corporate serfdom, former Governor John Engler moved seamlessly to the much higher paying position as President of the National Association of Manufacturers (NAM) in Washington, D.C.

The internal tensions of large trade associations are rarely the subject of reporters' attentions. For if they were, they would discover an ongoing conflict between Mr. Engler with his giant multinational corporate brethren and some mostly domestic manufacturers upset with his all out support of corporate globalization policies-NAFTA and WTO style.

Nowadays, Engler and his Big Boys are not happy with executives at Nucor corporation-one of the largest steel producers in the United States with facilities in 14 states. The feeling is mutual. Along with a growing number of stateside manufacturers, Nucor would like Mr. Engler to recognize some of the adverse realities which flow from the deindustrialization of American due to unfair global trade practices and models.

On a general plane, NAM keeps pushing the White House and Congress for trade agreements and policies that have taken the United States from its status as the world's leading creditor (they owed us) in 1980 to by far the world's leading debtor (we owe them trillions of dollars). For over 27 straight years, our country has chalked up rapidly rising trade deficits. This year the trade deficit alone will exceed $800 billion. This year, countries like China and Japan will loan us money (buying U.S. treasury bonds) to finance these deficits, thus postponing the day of reckoning.

Nucor's concerns were reflected recently by a remarkable new coalition of grassroots organizations representing farmers, workers and manufacturers which met the week of November 15, 2006 in Colorado Springs, Colorado.

Their statement of purpose declares: "Multinational corporate-controlled globalization is undermining the well being and prosperity of farmers and rural America, working families, domestic manufacturers, and the service industries depending upon them.

"Existing trade agreements have caused tremendous trade deficits, harmed future American innovation prospects, resulted in tens of thousands of manufacturing company closures, and eliminated millions of manufacturing jobs. They have also compromised national security and undermined national sovereignty.

"We are committed to developing a New Global Trade and Investment Agenda that serves the people who make and grow things in all countries. The agenda must include and improve labor and environmental standards, food security, and national security. It must realign corporate and trade objectives to serve the nation's public and private interests."

The declaration was signed by the Organization for Competitive Markets (OCM), the National Farmers Union, the California Farmers Union, the National Catholic Rural Life Conference and the American Corn Growers Association, among others.

Fred Stokes, the executive director of OCM, army veteran and defender of family agriculture, was a sparkplug for this conference and is planning a much larger gathering in Washington, D.C. next March.

The Breakout sessions were framed by specific questions. Has the globalization model provided equal opportunity for all participants in the economic system? Has it increased or decreased risk in the food system? Has it increased or decreased national security risks? Has it weakened or enhanced national sovereignty and Democracy?

This focus should attract a substantial number of the American people and broaden the ways of evaluating these trade agreements, as if people matter first, not as if the NAM's dominant powers over government are to continue making the rules.

The use of the phrase "free trade" to describe NAFTA and WTO is ludicrous. For one thing, there can be no "free trade" with dictatorial nations like China because so many of the labor and other costs are dictated by the central government, not by markets or free collective bargaining. For another thing, these trade agreements are full of monopolies such as long western-type patent grants which are the antithesis of "free trade."

Lastly, as Public Citizen's director of Global Trade Watch, Lori Wallach, demonstrates, holding up a giant compendium of NAFTA and WTO rules: "If there was 'free trade,' a couple of pages would do. This is about who write the rules. This is about corporate-managed trade."

 

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