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07/10/2007

"Trade is nothing but the release of what one has in abundance to obtain some other thing one wants."

By Frank Chodorov (1887�1966)

[This article is excerpted from chapter 6 of The Rise and Fall of Society.]

Part II

The point is emphasized by the strategy of war. The objective of a general staff is to destroy the marketplace mechanisms of the enemy; the destruction of his army is only incidental to that purpose. The army could well enough be left intact if his internal means of communication were destroyed, his ports of entry immobilized, so that specialized production, which depends on trade, could no longer be carried on; the people, reduced to primitive existence, thus lose the will to war and sue for peace.

That is the general pattern of all wars. The more highly integrated the economy the stronger will be the nation in war, simply because of its ability to produce an abundance of both military implements and economic goods.

On the other hand, if its ability to produce is destroyed, if the flow of goods is interrupted, the more susceptible to defeat it is, because its people, unaccustomed as they are to primitive conditions, are the more easily discouraged. There is no point to the argument as to whether �guns� or �butter� is more important in the prosecution of war.

It follows that any interference with the operation of the marketplace, however done, is analogous to an act of war. A tariff is such an act. When we are �protected� against Argentine beef, the effect (as intended) is to make beef harder to get, and that is exactly what an invading army would do.

Since the duty does not diminish our desire for beef, we are compelled by the diminished supply to put out more labor to satisfy that desire; our range of possibilities is foreshortened, for we are faced with the choice of getting along with less beef or abstaining from the enjoyment of some other �good.� The absence of a plenitude of meat from the marketplace lowers the purchasing power of our labor. We are poorer, even as is a nation whose ports have been blockaded.

Moreover, since every buyer is a seller, and vice versa, the prohibition against their beef makes it difficult for Argentineans to buy our automobiles, and this expression of our skills is constricted. The effect of a tariff is to drive a potential buyer out of the marketplace. The argument that �protection� provides jobs is patently fallacious. It is the consumer who gives the worker a job, and the consumer who is prevented from consuming might as well be dead, as far as providing productive employment is concerned.

"Any interference with the operation of the marketplace, however done, is analogous to an act of war."

Incidentally, is it jobs we want, or is it beef? Our instinct is to get the most out of life with the least expenditure of labor. We labor only because we want...the opportunity to produce is not a boon, it is a necessity. Neither the domestic nor the foreign producer �dumps� anything into our laps. There is a price on everything we want and the price is always the weariness of toil.

Whatever causes us to put out more toil to acquire a given amount or kind of satisfactions is undesirable, for it conflicts with our natural urge for a more abundant life. Such is a tariff, an embargo, an import quota or the modern device of raising the price of foreign goods by arbitrarily lowering the value of our money. Any restriction of trade, internal or external, does violence to a man's primordial drive to improve his circumstances.

Just as trade brings people together, tending to minimize cultural differences, and makes for mutual understanding, so do impediments to trade have the opposite effect. If the customer is always �right,� it is easy to assume that there is something wrong with the nonbuyer. The faults of those who refuse to do business with us are accentuated not only by our loss, but also by the sting of personal affront.

Should the boy with the tops refuse to trade with the boy who has marbles, they can no longer play together; and this desocialization can easily stir up an argument over the relative demerits of their dogs or parents.

Just so, for all our protestations of good neighborliness, the Argentinean has his doubts about our intentions when we bolt our commercial doors against him; compelled to look elsewhere for more substantial friendship, he is inclined to think less of our national character and culture.

The byproduct of trade isolationism is the feeling that the �outsider� is a �different kind� of person, and therefore inferior, with whom social contact is at least undesirable if not dangerous. To what extent this segregation of people by trade restrictions is the cause of war is a moot question, but there can be no doubt that such restrictions are irritants that can give other causes for war more plausibility; it makes no sense to attack a good customer, one who buys as much of our products as he can use and pays his bills regularly.

Perhaps the removal of trade restrictions throughout the world would do more for the cause of universal peace than can any political union of peoples separated by trade barriers. Indeed, can there be a viable political union while these barriers exist? And, if freedom of trade were the universal practice, would a political union be necessary?

Let us test the claims of �protectionists� with an experiment in logic. If a people prosper by the amount of foreign goods they are not permitted to have, then a complete embargo, rather than a restriction, would do them the most good. Continuing that line of reasoning, would it not be better all around if each community were hermetically sealed off from its neighbor, like Philadelphia from New York?

Better still, would not every household have more on its table if it were compelled to live on its own production? Silly as this reductio ad absurdum is, it is no sillier than the �protectionist� argument that a nation is enriched by the amount of foreign goods it keeps out of its market, or the �balance of trade� argument that a nation prospers by the excess of its exports over imports.

Yet, if we detach ourselves mentally from entrenched myths, we see that acts of internal isolationism such as described in our syllogism are not infrequent. A notorious instance of this is the French octroi, a tax levied on products entering one district from another.

Under cover of �quarantine� regulations, Florida and California have mutually excluded citrus fruits grown in the other state. Labor unions are violent advocates of opulence-through-scarcity, as when they restrict, by direct violence or by laws they have had enacted, the importation of materials made outside their jurisdiction. A tax on trucks entering one state from another is of a piece with this line of reasoning.

Thus, the �protectionist� theory of fence building is internalized, and in the light of these facts our reductio ad absurdum is not so farfetched. The marketplace, of course, scoffs at such scarcity-making measures, for it yields no more than it receives; if its offerings are made scarce by trade restrictions, that which remains becomes harder to get, calls for an expenditure of more labor to acquire. The wage level of Society is lowered.

"Perhaps the removal of trade restrictions throughout the world would do more for the cause of universal peace than can any political union�"

The myth of �protectionism� rests on the notion that the be-all and end-all of human life is laboring, not consumption � and certainly not leisure. If that were so, then the slaves who built pyramids were most ideally situated; they worked much and received little. Likewise, the Russians chained to �five-year plans� have achieved heaven on earth, and so did the workers who, during the Depression, were put to moving dirt from one side of the road to the other.

Extending this notion that exertion for the sake of exertion is the way to prosperity, then a people would be most prosperous if they all labored on projects with no reference to their individual sense of value. What is euphemistically called �war production� is a case in point. But there is in fact no such thing, since the purpose of production is consumption; and it is not on record that any worker built a battleship because he wanted it and proved his craving by willingly giving up anything in exchange for it.

Keeping in mind the exaltation of laboring, would not a people be most uplifted if they all were set to building battleships, nothing else, in return for the necessaries that would enable them to keep on building battleships? They certainly would not be unemployed.

Yet, if we base our thinking on the natural urge of the individual to better his circumstances and widen his horizon, operating always under the natural law of parsimony (the most gain for the least effort), we are compelled to the conclusion that effort which does not add to the abundance of the marketplace is useless effort.

Society thrives on trade simply because trade makes specialization possible, specialization increases output, and increased output reduces the cost in toil for the satisfactions men live by. That being so, the marketplace is a most humane institution.

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