Washington Really Needs Fredric Bastiat Right Now
If you listen to members of Congress, or members of the Trump administration, there is no shortage of boogeymen in the world. Some are truly bad, and certainly don’t have America’s best interests at heart. At the same time it's worth pointing out that the alarmists within our own borders pose a more immediate, more material threat to U.S. interests than do the foreign monsters they fear.
Consider China. The rhetoric about the Asian country reaches maniacal levels with some politicians, and even economists, suggesting that China is “the new Soviet Union.” They claim the economic advancement of these authoritarian nations is an existential threat to the United States. For people who espouse American exceptionalism, they seem to have very little confidence in our ability to weather these supposed threats.
It’s not only sad, but counterproductive as well. The fact that repressive states, many of whom have relatively closed economies, are beginning to expand should be seen as a remarkable opportunity for the U.S., not a threat. Economic relations is not a zero-sum game, and should not be viewed as such. In some cases, their interests can be our interests as well.
For example, 88 percent of all U.S. trade is done with 30 other countries. Of these, 12 have been rated less than “Free” by Freedom House’s Democracy Index. Furthermore, 35 countries can list the U.S. as their top import partner, meaning they import more goods from the U.S. than from any other nation. Of those 35 countries, 13 are considered less than free. Lastly, 38 countries have the U.S. as their top export partner. This means that the U.S. is the top market for their goods around the world. Over half of those countries are less than free.
Despite all of this, we have not been overrun by autocratic rulers, or come under prolonged attack by any of these nations. In fact, China, the supposed heir to the Soviet Union, is our largest single trading partner, and accounts for roughly 18.5 percent of our total trade. During the Soviet era, the Soviet Union only accounted for one percent of total U.S. trade. China is not an adversary. It is a beneficiary of U.S. production and of our demand for their production, just as the U.S. benefits from Chinese products and from the Chinese market for our goods.
There is an old adage, often attributed to the late French economist, Frederic Bastiat, that says, “When goods don’t cross borders, soldiers will.” These words, paraphrased in some form or another across the centuries, holds the key to assuaging the superfluous fears that many in Washington are nursing with regards to foreign powers.
It is quite incredible that so many people we would otherwise regard as well-educated think that it would be better or safer for the U.S. if the rest of the international community was brought to its knees economically. Those well-versed in history will know that devastation of the German economy in the wake of World War I did not make it any less of a threat to the rest of the world. In fact it was quite the opposite. It bred resentment and accelerated their descent into totalitarianism and led to the rise of Hitler’s Third Reich and the Second World War. We should not fear economic expansion of would-be adversaries. We should champion it.
Those who are ignorant of history, as they say, are doomed to repeat it. Iran is another one of these boogeymen that keeps U.S. politicians up at night. In fact, then-presidential candidate Mike Huckabee, in a paranoid rambling, compared the Iranian regime directly to the Third Reich and used this to say we should not open relations with that country. One should come to the opposite conclusion. There is a lot of production in Iran, and a large market for U.S. dollars. We should unite our interests. A nuclear Iran would not threaten the U.S. if we made ourselves economically indispensable to them. Hollow threats and heightened rhetoric, on the other hand, achieve nothing.
Think of all the perceived villains in the world right now that we do not have vibrant economic relations with: Iran, Cuba, Syria, and many more. The presumed threats are actually opportunities. They're untapped markets that could greatly benefit from U.S. goods. If the Trump administration is so keen on increasing our exports and getting trade surpluses with other nations, why not start with the countries we see as enemies?
If our leaders are serious about global peace and helping American businesses, open trade is a very simple solution that would have widespread benefits. The U.S. political class should heed Bastiat’s warning, and recognize that if our goods don’t start flowing to these nations, our brave men and women in uniform may soon enough.