By Thomas DiLorenzo
I’m a fan of much of Pat Buchanan’s “America First” foreign policy writings in which he expresses the supposedly outrageous idea that the purpose of the national defense establishment should be to defend against foreign aggressors, and not be the aggressor. Defense, not offense. But his “America First” economic writings in defense of protectionism are completely wrongheaded, and often historically inaccurate.
The main reason for the wrongheadedness is Buchanan’s pervasive error of the post hoc ergo propter hoc fallacy (“after this, therefore because of this”). An example of this fallacy would be: 1) A rooster crows in the morning; 2) The sun rises shortly after the rooster crows; 3) Therefore, the rooster crowing must cause the sun to rise.
In Buchanan’s case, his entire argument for protectionism rests on a slightly different version of the post hoc ergo propter hoc fallacy. Buchanan’s fallacy is: 1) The Republican Party ushered in forty years of protectionist tariffs, beginning in 1862; 2) There was a lot of good economic news for Americans during that period; 3) Therefore, the Republican Party’s protectionist trade policies caused the economic good news.
In a recent column entitled “Who’s the Conservative Heretic” Buchanan repeats this mantra, which he has written over and over for the past several decades, by citing the high tariff policy of the post-Civil War era, along with declining prices, higher real wages, 4% per year increases in GDP, increased industrial production, etc. and claims that ALL of it is the result of high tariffs.
But during that time period international trade accounted for less than 10 percent of the entire economy, so that high tariffs could not possibly have had such huge impacts. Moreover, the economic impacts of the GOP’s protectionist tariffs were uniformly bad. The main beneficiaries of the Party of Lincoln’s protectionism were the politically-connected corporate one-percenters of the day, whose corporate profits were “protected” from competition. As John C. Calhoun once accurately stated, what average Americans are “protected” from with protectionist tariffs is lower prices. Buchanan’s beloved high, post-war tariff rates allowed protected industries to rip off their American customers while all other industries were expanding, innovating, and dropping their prices. This is always and everywhere the fundamental effect of “economic nationalism”: the politically connected benefit at the expense of their fellow citizens.
Read the rest here.