An off-hand comment I left over at the League provoked this blast from Daniel Larison:
Quite clearly, the difference is that economic sanctions imposed on “rogue” regimes are aimed at punishing a foreign population and trying to force changes in another government’s internal policies, which never works, while measures designed to protect against cheap competition are aimed at supporting domestic industries. Critics of protectionism do not deny that these supports are successful, but insist that they should not be implemented for the sake of efficiency and “growth.” Governments impose economic sanctions on the assumption that people in other countries think and act as nothing more than consumers whose loyalties can be manipulated through high prices for imports. Opposition to protectionist measures presupposes treating citizens as if they were consumers whose loyalties should be manipulated with low prices for imports. Protectionist policies take for granted that national sovereignty and citizenship are relevant factors in determing the regulation of international trade. Economic sanctions policies are based on the assumption that concepts of national sovereignty and citizenship mean as little to members of other nations as they do to globalists in the West. Does that about cover it?
P.S. Protectionist has always struck me as a strange epithet, as if it were an insult to say that you protect things. I suppose the opposite of a protectionist would be a despoiler. Now that’s an epithet!
With respect to Mr. Larison, the evidence that protectionism enhances domestic industry is far from incontrovertible. As I mentioned in the original thread, advocates of industrial policy tend to cherry-pick their examples: post-war Japan is held up as a shining beacon of benign economic nationalism, while sub-Saharan Africa’s ill-fated encounter with industrial policy is rarely mentioned. Perhaps the Africans were doing it wrong? Or perhaps corrupt technocrats simply aren’t very good at betting the field. Even Japan – the industrialists’ favored example – suffers from an incestuous relationship between politicians and big business, a state of affairs that is undoubtedly linked to its history of industrial protectionism.
Theory and practice aren’t synonymous, so it’s worth examining the pragmatic barriers to centralized industrial policy. I find it odd that two avowed skeptics of collusion between big business and big government are so eager to hand over the United States’ tariff policy to corporate lobbyists. Do we really think K Street has internalized the best interests of working American families? Or is it more likely that any attempt to revive economic protectionism will be immediately hijacked by the Chamber of Commerce?
I’ve seen this movie before and I didn’t care for the ending. Read Roderick Long’s indispensable post on the secret history of the American economy – centralized industrial policy is what created modern-day corporate welfare. The cultural homogenization E.D. spends so much time criticizing is a result of a political process that privileges scale and personal connections over merit. Here’s a relevant excerpt from Long’s recent piece in Cato Unbound:
I don’t mean to suggest that Wal-Mart and similar firms owe their success solely to governmental privilege; genuine entrepreneurial talent has doubtless been involved as well. But given the enormous governmental contribution to that success, it’s doubtful that in the absence of government intervention such firms would be in anything like the position they are today.
In a free market, firms would be smaller and less hierarchical, more local and more numerous (and many would probably be employee-owned); prices would be lower and wages higher; and corporate power would be in shambles. Small wonder that big business, despite often paying lip service to free market ideals, tends to systematically oppose them in practice.
It’s also worth noting that the most prominent contemporary example of American protectionism is completely dominated by Big Business. If we can’t manage farm subsidies competently, how can we expect any industrial policy that emerges from Washington to truly have the best interests of American workers at heart?
I’m more sympathetic to Larison’s arguments about the importance of our national community’s economic and social vitality. But I’m left wondering why responsibility for preserving local craftspeople falls to the Department of Commerce and the Office of the U.S. Trade Representative. If local jobs and industry are important, citizens ought to support and expand these institutions of their own accord. Anything less displaces responsibility from local communities to a faceless – and unresponsive – Washington bureaucracy.