I appreciate John Ehrett actually bringing the Bible into the discussion, but I am not convinced. I do not think slavery under Pharaoh, or Israel’s childhood serfdom under the Law, have the ramifications that Ehrett thinks they do. I remain convinced that people should be politically free to trade labor and other goods if the transaction does not violate God’s commandments. For example, in a Christian civic order, prostitution should be illegal—and, in the church, an impenitent user of sex workers should be excommunicated. But people buying foreign cars should be left unmolested and un-manipulated—and, in the church, no one should face church discipline for driving a Kia. The market that results in such a legal environment, not politicians, will be better at respecting created limits and eliminating oppressive poverty.
I have much more agreement with the basic ideals expressed by Samuel Gregg, though I may be much more suspicious of “public works” and the interventionism/imperialism that gets justified as “national defense.” I emphatically agree that free trade allows regions to discover their comparative advantage. It is best for everyone when everyone regards everyone else as an asset and potential partner rather than a rival in a zero-sum scenario.
Of course, there will be relative economic declines for some people, but that is going to happen anyway. Let it happen without politicians making it worse by “helping.” A rising standard of living is what we have experienced with the rise of the market and there is no reason to think “economic nationalism” presents a better alternative.
But what are we to make of the recent electoral rebellion against “globalism” in favor of “economic nationalism” and even “protectionism”? Of course, political options are bundled, so we can’t be sure of what exactly is going on in any national election with only two viable alternatives. My sense is that lots of free traders favored a Trump administration over a Harris one. But it still seems that there is an “economic nationalist” impetus behind the Trump-Vance victory and I will write on that assumption
Gregg refers to the US “walking away from a commitment to free trade.” But what was that commitment? The US has always had tariffs and, to some degree, Gregg seems to approve of them in some cases. As far as I can tell, our commitment is embodied in this paragraph:
At the same time, these policies went together with a qualified embrace of trade liberalization, first through the General Agreement on Tariffs and Trade (GATT) in 1947 which eventually became the World Trade Organization (WTO) in 1995 that today embraces 166 member nations. In short, from 1947 onwards, most Western countries gradually sought to reduce tariffs, subsidies and import-quotas but also engaged in some degree of industrial policy.
It makes immediate sense to prefer “a qualified embrace of trade liberalization” to a rhetorical dismissal of free trade. But how does that play in the voting populace? The common conception seems to be that our government enters into agreements that decide which industries in the US are hurt or destroyed and which are not. I can see why voters would have a problem with that. They think they elect their rulers to represent their interests, not betray them. And accusations of domestic and foreign lobbying, real or imagined, only exacerbate the opposition to this “qualified embrace of trade liberalization.” Do free traders create propaganda against themselves by endorsing these agreements and their results?
Furthermore, I have to wonder how far we can discuss trade in the context of central banks and fiat currency.
My current understanding of our economic relationship with China is that we do not have trade that can ever balance. What should happen as the Chinese get American dollars in exchange for their exports is that they would increase their purchases of products with those dollars. Thus, increased prosperity in China from selling exports would increase their ability and desire to purchase U.S. exports. In this way both nations would be better off because they would discover (and re-discover as circumstances changed) their comparative advantage.
That is not allowed to happen because the Chinese are required to convert their dollars into their own ever-inflating currency. The Chinese bank then loans those dollars to the US government. The Chinese are kept poor and the U.S. government and other institutions get artificially low interest rates.
This is my understanding of Salman Khan’s argument from 2011.
(These observations may be related to Philip Pilkington’s diagnosis that the trade deficit is our main problem, related to the dollar’s role as the world reserve currency. But it pushes my limits to assert this with certainty or to understand his alternative.)
As I see it, the US and Chinese people are both being hurt by this policy (or these policies). Yet it is presented as a “liberal trade policy.” So, despite the fog of economic sophistry that clouds the minds of American voters, at bottom I think they are correct that their government’s trade policy is damaging them, and, given the limits of American financial discourse, it is not surprising that they blame free trade.
I wonder it any nation could discover their true comparative advantage in this politically and economically manipulated environment.
(It was recently pointed out to me that a county’s industries, which are powerful enough to influence politicians to negotiate trade deals that are favorable to them, may be the ones that are most economically efficient to support. That my be the case, but it still looks like a corrupt arrangement.
A further problem is found in Americans’ ridiculous widespread confidence in democracy. While I tend to doubt that industrial policy is ever a good thing (merely as a non-economist and convinced Christian individualist), Philip Pilkington’s observation is astute:
Industrial policy can work and has worked in countries like South Korea and Taiwan. But the fact that Congress apportions money in the United States opens far too much room for industrial policy to be used to launder giveaways for insiders. …Fukuyama was right: the United States’ system of government is likely too democratic to engage in serious industrial policy.
I think we can dive deeper. We have convinced ourselves that the best form of government is one where rulers have no more interest in the future of the country than the average citizen, but possess immense power to effect their personal interests. There is no possible way that arrangement can last. This incentive structure exists at every level of the executive and legislative branches of government. It has developed over centuries and, through influence on education and other institutions, has made the process of corruption into the public faith of the nation. Even if electing a moral superhero were possible, that person would be paralyzed, at best, by a horde of politicos using “checks and balances” and other means to nullify the his influence. We all witnessed how easy it was from 2016-2020 to reduce the chief executive to raging on Twitter. Just as we witnessed from 2020-2024, the government running itself without any apparent leadership.
So what to do?
While I think embracing “economic nationalism” would be tantamount to putting trust in princes, I don’t think we necessarily have to fear it, either. The current administration, despite its rhetoric, has shown it encompasses multiple views. This might demonstrate an occasional advantage of our system: victory often requires coalitions. What I will be praying for is that the compromises that are made to keep the coalition together, move it in the direction of trade liberalization, even if there is not a commitment to it in our rhetoric. The economic nationalism might be practiced in a way that is pretty close to “a qualified embrace of trade liberalization.”
And despite my general pessimism (realism!) regarding democracies or republics, sometimes an impending crisis can become so undeniable, that many will see that it is in their best interests to avert it. Perhaps that is happening now.
Thus, while continue to pray for an era of unqualified, full embrace of trade liberalization, and the miraculous resurrection of the Bourbon Democrats, I continue to be cautiously hopeful.
Mark Horne is a member of the Civitas group, and holds an M.Div from Covenant Theological Seminary. He is assistant pastor at Providence Reformed Presbyterian Church in St. Louis, and is the executive director of Logo Sapiens Communications. He writes at www.SolomonSays.net, and is the author, most recently, of “Solomon Says: Directives for Young Men” from Athanasius Press.
I appreciate John Ehrett actually bringing the Bible into the discussion, but I am not convinced. I do not think slavery under Pharaoh, or Israel’s childhood serfdom under the Law, have the ramifications that Ehrett thinks they do. I remain convinced that people should be politically free to trade labor and other goods if the transaction does not violate God’s commandments. For example, in a Christian civic order, prostitution should be illegal—and, in the church, an impenitent user of sex workers should be excommunicated. But people buying foreign cars should be left unmolested and un-manipulated—and, in the church, no one should face church discipline for driving a Kia. The market that results in such a legal environment, not politicians, will be better at respecting created limits and eliminating oppressive poverty.
I have much more agreement with the basic ideals expressed by Samuel Gregg, though I may be much more suspicious of “public works” and the interventionism/imperialism that gets justified as “national defense.” I emphatically agree that free trade allows regions to discover their comparative advantage. It is best for everyone when everyone regards everyone else as an asset and potential partner rather than a rival in a zero-sum scenario.
Of course, there will be relative economic declines for some people, but that is going to happen anyway. Let it happen without politicians making it worse by “helping.” A rising standard of living is what we have experienced with the rise of the market and there is no reason to think “economic nationalism” presents a better alternative.
But what are we to make of the recent electoral rebellion against “globalism” in favor of “economic nationalism” and even “protectionism”? Of course, political options are bundled, so we can’t be sure of what exactly is going on in any national election with only two viable alternatives. My sense is that lots of free traders favored a Trump administration over a Harris one. But it still seems that there is an “economic nationalist” impetus behind the Trump-Vance victory and I will write on that assumption
Gregg refers to the US “walking away from a commitment to free trade.” But what was that commitment? The US has always had tariffs and, to some degree, Gregg seems to approve of them in some cases. As far as I can tell, our commitment is embodied in this paragraph:
At the same time, these policies went together with a qualified embrace of trade liberalization, first through the General Agreement on Tariffs and Trade (GATT) in 1947 which eventually became the World Trade Organization (WTO) in 1995 that today embraces 166 member nations. In short, from 1947 onwards, most Western countries gradually sought to reduce tariffs, subsidies and import-quotas but also engaged in some degree of industrial policy.
It makes immediate sense to prefer “a qualified embrace of trade liberalization” to a rhetorical dismissal of free trade. But how does that play in the voting populace? The common conception seems to be that our government enters into agreements that decide which industries in the US are hurt or destroyed and which are not. I can see why voters would have a problem with that. They think they elect their rulers to represent their interests, not betray them. And accusations of domestic and foreign lobbying, real or imagined, only exacerbate the opposition to this “qualified embrace of trade liberalization.” Do free traders create propaganda against themselves by endorsing these agreements and their results?
Furthermore, I have to wonder how far we can discuss trade in the context of central banks and fiat currency.
My current understanding of our economic relationship with China is that we do not have trade that can ever balance. What should happen as the Chinese get American dollars in exchange for their exports is that they would increase their purchases of products with those dollars. Thus, increased prosperity in China from selling exports would increase their ability and desire to purchase U.S. exports. In this way both nations would be better off because they would discover (and re-discover as circumstances changed) their comparative advantage.
That is not allowed to happen because the Chinese are required to convert their dollars into their own ever-inflating currency. The Chinese bank then loans those dollars to the US government. The Chinese are kept poor and the U.S. government and other institutions get artificially low interest rates.
This is my understanding of Salman Khan’s argument from 2011.
(These observations may be related to Philip Pilkington’s diagnosis that the trade deficit is our main problem, related to the dollar’s role as the world reserve currency. But it pushes my limits to assert this with certainty or to understand his alternative.)
As I see it, the US and Chinese people are both being hurt by this policy (or these policies). Yet it is presented as a “liberal trade policy.” So, despite the fog of economic sophistry that clouds the minds of American voters, at bottom I think they are correct that their government’s trade policy is damaging them, and, given the limits of American financial discourse, it is not surprising that they blame free trade.
I wonder it any nation could discover their true comparative advantage in this politically and economically manipulated environment.
(It was recently pointed out to me that a county’s industries, which are powerful enough to influence politicians to negotiate trade deals that are favorable to them, may be the ones that are most economically efficient to support. That my be the case, but it still looks like a corrupt arrangement.
A further problem is found in Americans’ ridiculous widespread confidence in democracy. While I tend to doubt that industrial policy is ever a good thing (merely as a non-economist and convinced Christian individualist), Philip Pilkington’s observation is astute:
Industrial policy can work and has worked in countries like South Korea and Taiwan. But the fact that Congress apportions money in the United States opens far too much room for industrial policy to be used to launder giveaways for insiders. ...Fukuyama was right: the United States’ system of government is likely too democratic to engage in serious industrial policy.
I think we can dive deeper. We have convinced ourselves that the best form of government is one where rulers have no more interest in the future of the country than the average citizen, but possess immense power to effect their personal interests. There is no possible way that arrangement can last. This incentive structure exists at every level of the executive and legislative branches of government. It has developed over centuries and, through influence on education and other institutions, has made the process of corruption into the public faith of the nation. Even if electing a moral superhero were possible, that person would be paralyzed, at best, by a horde of politicos using “checks and balances” and other means to nullify the his influence. We all witnessed how easy it was from 2016-2020 to reduce the chief executive to raging on Twitter. Just as we witnessed from 2020-2024, the government running itself without any apparent leadership.
So what to do?
While I think embracing “economic nationalism” would be tantamount to putting trust in princes, I don’t think we necessarily have to fear it, either. The current administration, despite its rhetoric, has shown it encompasses multiple views. This might demonstrate an occasional advantage of our system: victory often requires coalitions. What I will be praying for is that the compromises that are made to keep the coalition together, move it in the direction of trade liberalization, even if there is not a commitment to it in our rhetoric. The economic nationalism might be practiced in a way that is pretty close to “a qualified embrace of trade liberalization.”
And despite my general pessimism (realism!) regarding democracies or republics, sometimes an impending crisis can become so undeniable, that many will see that it is in their best interests to avert it. Perhaps that is happening now.
Thus, while continue to pray for an era of unqualified, full embrace of trade liberalization, and the miraculous resurrection of the Bourbon Democrats, I continue to be cautiously hopeful.
Mark Horne is a member of the Civitas group, and holds an M.Div from Covenant Theological Seminary. He is assistant pastor at Providence Reformed Presbyterian Church in St. Louis, and is the executive director of Logo Sapiens Communications. He writes at www.SolomonSays.net, and is the author, most recently, of “Solomon Says: Directives for Young Men” from Athanasius Press.
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