The commonplace temptation is usually to overstate the significance
of decisions and events, and most observers have fallen into line with
the tendency when it comes to the bill the Senate approved Tuesday to
establish what is portentously called Permanent Normal Trade Relations
with Mainland China. So just for the record, it is probably not the
biggest step in U.S.-Chinese relations since President Nixon’s 1972
visit. It represents neither a particular political triumph nor a
political surrender that dashes hopes for human rights. If anything it
is a symbol of the political system acknowledging reality.
The United States and China are, each of them, too large and too
important in the world for the two countries not to have relations of
some kind. Those relations will include a certain amount of trade.
Whether you stick a label called “globalization” on that fact or not,
or how you or anybody responds emotionally to that label, more trade
will occur. The only real question is on what terms.
There’s little question that China, one of the last of the sclerotic
communist regimes in the world is hardly a model of humanitarian or
libertarian behavior. It maintains an authoritarian system of economic
and social control over the people that the old men in Beijing presume
to rule and seems to have stepped up persecution of religious believers
in the last couple of years. It still maintains a policy of forced
abortions in many parts of the country and serves as a constant threat
to Taiwan, which mainland rulers resent especially for its economic and
The key question is whether restricting trade, or threatening to
restrict trade is likely to improve the manners and principles of
Since 1974 trade relations with communist states have been subject to
annual review by Congress. Since the 1989 crackdown on Tiananmen Square
the reviews have been tense and rhetorically charged each year, and
maybe that’s not such a bad thing. But each year, after the dust has
settled, Congress has approved what used to be called “most favored
nation” status and is now called “normal trade” status for China.
Tuesday’s legislation will simply eliminate that annual opportunity
to posture and complain before approving the inevitable. The annual
discussion about human rights in China is not necessarily a bad thing,
and in spite of the hypocrisy and selective indignation it always
features, it does serve as a reminder. However, it won’t disappear –
the legislation sets up a less formal commission to monitor human rights
in China. But the stakes won’t be so high. And maybe that’s not such a
bad thing. Sometimes raising the stakes makes it more difficult to talk
openly and criticize sensibly.
In a genuinely free society the right to trade would be recognized as
a fundamental — perhaps the most fundamental — human right, and
threats to restrict trade (even in a good cause) would be viewed as
assaults on human rights and the dignity of the individual, even as are
freedom of speech and freedom of religion.
In his remarkable essay “Civilization or Caveman Economy,” the
libertarian writer Frank Chodorov elaborated on the importance of trade.
A theoretical caveman might provide for all of his own necessities, but
if so “he could not have satisfactions which required a complexity of
effort.” Therefore, “In due time it must have occurred to him that if he
concentrated upon one of these trades, let us say fishing, while his
neighboring caveman concentrated upon the making of such clothes as they
both wore, both could be more proficient — each would produce more. But
in order for such specialization to be possible, it was necessary for
these two cavemen to arrange for some
method of exchange.”
The upshot, Frank Chodorov believed, is that “I think we can fairly
state, then, that civilization started when the art of trade was
discovered.” Consequently, “Every increase in trade facilities aids in
the spreading of cultural values; and, contrariwise, every interference
with trade results in a corresponding retardation of cultural progress.
In other words, the freer the trade, the greater the advance in
civilization, and the more restrictions there are on trade, the surer
will be the retrogression of civilization.” Restrictions on trade are
tools of war and barbarism.
In real life, economic freedom, political freedom and civil liberties
cannot be disentangled if you restrict one area of human freedom there
are implications on other areas. The theoretical right to practice
religion is fairly hollow (as the Chinese are demonstrating by invading
homes and requiring licenses and approvals) if you don’t have the
essentially economic right to build and operate a house of worship
without the authorities having veto power over how you can use it or
even if it can be built.
So it’s more than a little ironic for those seeking to restrict trade
to invoke the cause of human rights as a reason for limiting the
fundamental freedom to trade. The freedom to trade is essential to life,
essential to the hope for a reasonably civilized society and a human
right that is not only fundamental but necessary to the effective
exercise (in the real world) of all other human rights.
All that said, it should be noted that the present system embodied in
the World Trade Organization, into which this vote moves China closer to
full participation, is not genuine free trade but trade overseen and
sometimes managed by international bureaucrats. As Frank Chodorov put
it, “We have never permitted the absolutely free exchange of productive
specializations, free of political regulations, free of taxes, free of
privilege. Therefore, we have never been completely civilized.”
Furthermore, Chodorov noted, “in dealing with the interrelated
questions of trade and civilization, I have not distinguished between
international trade and internal trade. There is none. What difference
is there, essentially, in the exchange of goods between a New Yorker and
a Vermonter and the exchange of goods between a New Yorker and a
Canadian? Does a political frontier inherently make a man a bad
customer? When Detroit sells an automobile to Minnesota, the debt is
eventually liquidated by a shipment of flour; and if the automobile is
sold to Brazil, the sale is completed with a shipment of coffee.
Nationality, color, race, and religion are of no consideration in any of
these exchanges. These characteristics become of importance only where
the war technique has become an integral part of our political system.”
It is worth noting, however, that neither the present system — what
we might call managed trade with a bias (for now) toward lower tariffs
– or genuine free trade comes with ironclad guarantees that increasing
prosperity will undermine authoritarian rule in China. That has been the
pattern through most of history — that trade is associated with peace,
the advancement of civilization and culture and growing respect for the
dignity of individual people.
But each civilization has its own characteristics, and China is an
enormously complex place. It will be freer if it trades more –
eventually — but there’s no way to predict how swift the process will
be or exactly what shape it will take. That’s one of the reasons so many
people — especially people educated to do so in government schools –
fear freedom. You just can’t predict what people will do if they lose
their chains, and you certainly can’t control it without resort to
So Permanent Normal Trade Relations is neither utopia nor a disaster.
If it moves China away from authoritarian rule, fine. But the real
justification for it is that a country that talks about respect for
human dignity should be in the business of dismantling barriers to
economic activity and trade, not using them as a weapon.