Not too long ago, the year 1776 would remind any American of he Declaration of Independence from Great Britain. Perhaps that remains with today’s young Americans, though we would not care to bet. But the date also recalls a less recognized event: the publication of “The Wealth of Nations” by Adam Smith, the (now grudgingly) acknowledged Father of Economics. “So what?” you might ask.
So quite a bit, actually. Back then, “mercantilism” was the prevailing political theory of trade. Its root was that exports that brought money into a country ere to be encouraged; imports that sent money out were to be discouraged. High cost local production subject to cheaper foreign competition was to be protected with high import duties on such products. You may recall hearing about this in school, if you were a student enough years back. Old Adam Smith shot all that down, making him few friends among politicians or those who funded them. He showed that government-free trade rather than government controlled trade was most efficient and best for all sides. Excepting politicians.
Smith died, government is immortal and so we have returned to government-controlled trade, more control even than in Smith’s day. “Free Trade” today has become an oxymoron. Of course, a wise politician and an economist desiring continuation of his paycheck avoid that admission.
Unfortunately, the subject is also avoided by all of the current American presidential candidates. The current “Trans Pacific Trade Partnership” peddled by President Obama and supported by too many of the presidential candidates is described as a “Free Trade” agreement only in Orwellian double speak. Even those who oppose it avoid much detail as to why they do so; they aren’t truly free traders either. Mostly, they just have different beneficiaries in mind.
The problem is of course, that the businessmen (and businesswomen and business transgenders etc.) who benefit from government protected trade are also major donors to the politicians who provide the protection. Sound familiar?
We can thank our American politicians for creating and sustaining these arrangements and then go on to thank American voters for those politicians. The buck, we suppose, stops there.
We drank beer with our dinner tonight; perhaps we should have stuck with our usual glass of wine?