2022-03-29

In Libertarianism, We Die

Libertarianism is a gateway to totalitarian government and immiseration because it is created in theory, not reality. Libertarians said the Internet would unleash freedom and freedom of speech. Instead, China constructed the world's most complete social monitoring system, so successful that Western tyrants and petty tyrants are rushing to copy it and apply it in a totalitarian manner. Cryptocurrency will likely unleash totalitarian economic control via central bank digital currencies. Crypto-enthusiasts helped kill cash and ushered in the digital tyranny because, as with the Internet, they believe technology alone suffices.

The story is the same with free trade policy extended beyond national borders.

Epoch Times: The Impossibility of Autarchy

Some believe that if our nation produced everything we needed, we would all be better off because we wouldn’t depend on others. The idea comes from a deep lack of understanding of economics. There’s no such thing as autarchy. There’s no such thing as covering all the needs of a population based on the limit of a politically defined border. It makes no sense.
Pure autarchy is idiotic and a strawman. Some fools out there are no doubt calling for pure autarchy, but most people are talking about maximizing domestic capital and labor. And even then, the majority of those people recognize economic efficiency. What most libertarians do not recognize is borders at all or any sense of collective action. They don't want to be part of a nation and therefore only see coercion when it comes to shared prosperity.
The other fallacy about autarchy that anyone can understand is that limiting the economy to the confinement of a random area of land is a poor way to develop, grow, and prosper. It’s almost laughable to read from politicians in the eurozone about how they want to achieve full independence and limit imports while at the same time they brag about the bloc’s enormous trade surplus. It’s funny to see how the most autarchic politicians want to increase exports at the same time. Close our borders to evil foreign commerce that destroys our factories! Let’s build more manufacturing capacity so that we can export to them!
The latter part is correct, many politicians are morons. Yet the first sentence is also absurd. One should not focus on improving one's own land, to grow and prosper? This only makes sense if one sees land and people as interchangeable widgets. I do not believe this author is a globalist, but you can see the camel's nose in the tent. The extermination of nations and culture flow from this economic assumption, that a nation should not seek to maximize its domestic fortunes first.
How can autarchy and protectionism be sold to citizens? By selling the false idea of a zero-sum game in the economy. If someone is selling oil to us, they win, and we lose. If someone is selling solar panels to us, they win, and we lose. We would win if we sold everything to ourselves. Really? The math doesn’t work like that. Politicians that sell a zero-sum game in the economy know it’s false, but they also know that protectionism and autarchic aspirations give power to them and make citizens more dependent on political power.
It's a much simpler question. Do you want 10 million angry unemployed people for neighbors, and 20 to 30 million underemployed, underpaid workers angered by the crappy jobs and declining standard of living for neighbors so that you can save 10 percent on a solar panel? Or so you can make $10 billion shipping their jobs off to China? The reason why China is wealthy today is not because they embraced free markets. Their economy is struggling because it didn't. They let markets in to some degree, but a major factor was short-sighted Western countries sold their middle class to China. The Chinese, and all of East Asia for that matter, recognize that wages are a function of capital and labor. Increase capital investment and wages will follow. In the financialized West, maximizing returns on capital is the main goal, labor be damned.

As for politics, the thorn in the side of all economic policy is corruption. There will be corruption in whatever policy is chosen. Minimizing that corruption should be a goal no matter the overall system, but the choice of system is itself corrupted. Anti-labor, short-sided, high time-preference individuals want to maximize their take now, long-term be damned. The current economic system that eschews a focus on long-term national prosperity is instead hijacked by short-term parasites who take control over businesses from long-term thinkers who, rationally, will not put their company into risk of bankruptcy by taking on massive amounts of debt. Businesses that are well-managed are "cheapened" by an economic system that favors economic parasitism. That rewards atomized individualistic behavior taken at the expense of neighbors. 

I will note here that most libertarians will point out the monetary system as a great villain in this story, and I agree. It still doesn't change my argument on this topic, moreover I see a move on trade as being more politically palatable then abolition of the Federal Reserve. Put another way, if I was dictator, I might move trade down the list of economic reforms, something to be tackled after first seeing how regulatory and tax cuts affect the economy. Perhaps trade will fall off the list. In the current context of U.S. politics though, trade looks like one of the few areas that could muster bipartisan support...

It may be true that some nations have taken advantage of an open economic system in order to sell more while making it more difficult for others, but the solution isn’t protectionism but more open trade. If a nation decides to harm itself by being protectionist, we’re reaping the benefits, not them, because we benefit from trade growth and prosperity while they end in stagnation.
Please explain this to the once prosperous rural and suburban areas of the USA that now resemble Ukrainian cities being shelled by Russian forces. Who exactly is prospering? The trick here is a general gain is substituted for a specific loss, which is a favorite trick of the free traders. GDP is up 0.01 percent thanks to this trade deal, but sorry we totally destroyed Youngstown, OH in the process. Learn to code and here's some food stamps and fentanyl.
The world’s supply problems can’t be solved by adding massive overcapacity in every country. That leads to a collapse in productivity and, much worse, real wages. There are plenty of great nations that can cooperate with us to deliver prosperity to everyone. Trade is the blood of the economy. Autarchy only leads to zombification and, ultimately, decay.
The nations that are free will prosper. The nations that are not free, who implement socialist and anti-market systems, will fall behind. It is time the United States and other free nations focused on making their own people prosperous first, which yes includes some free trade. There are a whole range of policies between immiserating open borders and immiserating autarchy. For example, the United States could implement a 25-percent general tariff on all imports. Would this eliminate trade? Hardly. It would shift some production from offshore to onshore. The tariff could be used dollar-for-dollar to eliminate taxes on productive use of labor and capital.

Something Always Beats Nothing  

Political extremism is on the rise. Thoroughly debunked economic theories such as socialist planning are already making policy (the Green New Deal and associated environmental policies are pure central planning) because the right and neoliberals embraced a libertarian, international-capital (corporatist, not capitalist) view of economics. They abandoned their people. If you want to live in a country that embraces capital uber-alles, the best spots are undemocratic countries such as Singapore or Arab Gulf States. These polities can run roughshod over political opposition. Or embrace the Baizuo's tyrannical takeover in the West, and along with it their economic central planning. Or instead reject both and focus on improving the lives of the average citizen.

There is no political utopian position. Man is fallen. Man is corrupt. What works in a theoretical utopia of perfectly rational individual actors is blown to smithereens when there are subversive groups who gang up and exploit those individuals. And when those individuals complain, they are told to suck it up, that's the market. Don't be surprised when those people turn to whatever policy response is offered up. When the alternative is death by dehydration, any consumable liquid will be accepted a thirsty man.

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