Why are right wing Republican administrations so protectionist?
Their rhetoric aside, Reagan and the Bushes have been far more protectionist than FDR, Carter, and Clinton were. Whether it's open protectionism like panicky steel tariffs, or the quieter moves the White House is using to protect orange growers in Florida, Republicans are, by any standard, the Protectionist Party.
Believe it or not, I don't subscribe to the view that the GOP is being hypocritical. I think it honestly supports free trade.
The problem is that when you tear down social supports like Social Security, welfare, Medicaid, minimum wage laws, etc., you are plunging people into fear--for their jobs, their pensions, their homes. Fearful people become xenophobic. Xenophobic people become protectionist.
When people have more assurances they won't be thrown out in the street, they're more likely to support open trade with other countries. This is why a Kerry Administration would be far more supportive of free trade than a second Bush Administration.
As an example, take the Asian economies like South Korea. They provide their people with a modicum of education and social support. To blunt calls for more widespread protectionism, they use tariffs and quotas judiciously--much as a doctor uses a small pox vaccine to guard against an outbreak of small pox. As a result, these countries both contribute to, and benefit from, free trade.
Compare them to the Latin America economies. In the 90s, social programs were gutted at the same time markets were thrown open. In fear, people have rejected free trade. Anti-free trade governments have swept to power in Brazil, Argentina, Venezuela, Ecuador, and are about to in Bolivia, Peru, possibly even Mexico.
If you want an open international trading system, you need to impose minimum labor and environmental standards on the poorest nations, while bolstering social programs in the wealthiest nations. Otherwise, countries will stop participating.
By analogy, imagine you want traffic to flow freely in a big city. You would build good roads, require people to drive safe cars, and impose minimum traffic regulations like stop signs and red lights. Otherwise, anarchy would abound, and people would stop driving.
In the United States, a single payer health insurance system would do more to encourage free trade than all this lecturing folks about the evils of protectionism. Free to start their own businesses without fear of compromising their health insurance, people would become more robust participants in open trade. When single payer was introduced in Canada, business start-ups soared. Canada now has the strongest economic growth of any G7 country.
Unfettered capitalism leads to protectionism. It's the iron law of international trade.
Article comments
1 - Hal Pawluk
Aargh - I've got a post along the same lines I was saving until tomorrow.
There's enough difference that I'll post it anyhow, but didn't want you to think I was copying :-)
I don't agree, however, that mixing trade and social policies is necessarily a good idea. Unless done very, very well, both areas suffer (and I don't have much confidence in this administration's international skills).
2 - mike
But I don't think you can't separate the two; trade and social policy are reflections of each other. The more militant pro-NAFTAs want to use free trade as an excuse to dismantle social programs and unions both here and abroad, for example.
3 - Hal Pawluk
what you really need is three parts in the equation: the trade deal, perhaps the insistence on various social conditions in your trading partner's country, and a sensitivity to and understanding of the social effects within your own country.
The current administration appears to entirely ignore the third piece even as they're starting to pay lip service to the second.
4 - mike
The problem is not just their ideological blinders; it's the quality of their appointments.
If you look at the people in Treasury, for example, they don't hold a candle to people like Brad DeLong or Robert Rubin or James Baker. Whatever you think of those folks and their policies, they were on a higher intellectual plane than the knuckleheads in Treasury now.
You can also make a good case that trade just isn't a priority for the GOP. The neoconservatives in particular don't really care about it.
For example, the Latin American countries are ripping up trade agreements and stiffing the IMF (a la Argentina). A few desultory press releases aside, the Bush Administration just shrugs its shoulders. Its mind is elsewhere.
5 - Hal Pawluk
Telling the IMF to go screw is not a bad idea.
They contributed to things like the 1997 East Asian financial crisis (even globalist admit it), and the efforts of them and the World Bank in South America are such that the net capital flow in the countries they're in is outward - more goes out than goes in, and the countries get poorer and poorer (Bolivia probably being the worst example).