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The religion of free trade

Posted By Vox Day On 06/24/2012 @ 3:17 pm In Commentary | No Comments

Let us suppose I told you of a certain doctrine in which millions of people believe without ever having read the book in which it is contained, which is predicated upon a situation that has never existed, and promises positive consequences that not only have never been delivered, but we are told cannot even be measured and cannot be realized without achieving something that has never been done before in the history of man. Furthermore, the doctrine was developed by a successful gambler and politician with absolutely no credentials or qualifications on the subject, which he had never even encountered before the age of 27, in tandem with a related theory that is so obviously insane that barely anyone has ever even heard of it.

So long as we are careful to set aside any reliance upon the genetic fallacy, does this sound like a doctrine that is not only infallible, but one that it would be crazy to even consider questioning? And yet, the fervor with which the advocates of the free-trade doctrine defend David Ricardo’s outdated, disproven theory of comparative advantage and decry those who question it is so ferocious as to indicate the nature of a belief that can only be described as religious.

David Ricardo was without question a brilliant and successful man, but what is much less often noted is how intellectually dishonest he was. In a previous WND column, titled Free Trade Harms America, I showed how Joseph Schumpeter labeled his peculiar and tautological method of argument the “Ricardian Vice.” Furthermore, he was not even the original author of the theory of Comparative Advantage, it having been first introduced by Robert Torrens in “An Essay on the External Corn Trade” two years before Ricardo transformed a specific argument for a specific situation into something passing for a general principle, which he published “On the Principles of Political Economy and Taxation.”

The chief legacy of David Ricardo’s free-trade doctrine, beyond its pernicious utilization by globalists and fascistic, anti-democratic organizations such as the European Union, is one of intellectual dishonesty. In Europe and the Americas, every so-called free-trade agreement has been signed over the objection of critics who object, correctly, that the effects will be precisely the opposite of those promised by those pushing the agreements. From the European Coal and Steel Community to NAFTA and the recent trade agreement with South Korea, the real objectives and eventual results have been very different from those promised. As Pat Buchanan demonstrated in his recent column titled “We need more economic nationalists,” free-trade doctrine fails catastrophically every time it is forced to prove itself as a predictive model.

This legacy of shameless dishonesty can be seen in the desperate attempt of free traders to separate the free movement of labor that has always been a part of the doctrine of free trade (and is in fact absolutely necessary to it) from the free movement of capital. Due to the public disaffection with mass immigration that is belatedly sweeping the West, free traders are now attempting to artificially distinguish the free trade in goods, which does not necessarily require immigration, from the free trade in services, which does, in order to make their doctrine less politically unpalatable. It can also be seen in the writings of Gary North, an elderly historian and self-styled “tea-party economist,” as he asserts that skepticism concerning free-trade doctrine amounts to nothing more than “trust in state power” and “faith in the economic productivity of men with badges and guns,” and that free trade is the litmus test of economics.

The idea that such an intrinsically flawed doctrine, one which has literally nothing to do with the economic operation of a domestic market that serves as the basis for most economic theory, could serve a litmus test for economic knowledge is absurd on its face. But North is guilty of far more than absurdity, as he also lies about the critics of the free-trade doctrine, even though he is, by his own admission, almost entirely ignorant of what their actual arguments are.

Ian Fletcher’s criticism of fair trade presented in “Free Trade Doesn’t Work” alone is sufficient to disprove North’s ridiculous claim that critics of free trade “always adopt arguments that apply only to America’s side of the border.” But North wouldn’t know that, because instead of bothering to read any of Fletcher’s books or articles devoted to the subject or addressing any of Fletcher’s many substantive criticisms of free-trade doctrine, he resorts to the genetic fallacy that could be much more justly applied to Ricardo in calling Fletcher “a man who is on the payroll of a industry trade association that promotes protective tariffs.”

As for North’s inept attempt to dismiss my suggestion that there may be an Austrian School case to be made against free trade, as unlikely as it may sound, one doesn’t have to read my entire response to his article on Lew Rockwell to see that North completely failed to grasp how free trade, in circumstances that just happen to closely match those seen at present in the United States, could exacerbate the problem of excessive debt that Ludwig von Mises and the Austrian economists consider to be the primary cause of economic distress.

There are a variety of perspectives from which the free-trade doctrine can be considered. But it must not be forgotten that Ricardo was not an economist in the modern sense, and his works were political economy. There are arguments for and against free trade that are purely economic and theoretical, but they must be carefully distinguished from those that are practical, political and even moral. And when the advocates of free trade assert the intrinsic perfection of free trade on a moral basis, it should be recognized that this is not an economic argument, but rather a religious one.

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