Wednesday, September 21, 2016

Donald Trump's Definition of Globalism is a Horrific One

Donald Trump has been hailed by some free market advocates for his anti-globalist position. But this may be a grave error.

Trump is not against the central planning concept  of global trade, which is what free market advocates object to, but just the type of central planning.

Current global trade agreements as has been pointed out here at EPJ many times (SEE: A Crony Economist Spills the Beans on "Free Trade" Agreements) are crony trade deals. It makes sense for anyone who favors free markets and free trade to state the problems with these agreements.

True free trade requires nothing more than the unilateral declaration "Let there be trade."

This is not what Trump has in mind to replace current crony trade deals. He is anti-globalism because he sees it not as crony deals but as unilateral free trade on the part of the United States. He wants even more detailed central planning of trade, He made this point clear last week when he spoke at the New York Economic Club in Manhattan:
Jobs can stop leaving our country,...we must replace the present policy of globalism – which has moved so many jobs and so much wealth out of our country – and replace it with a new policy of Americanism....
I have proposed a detailed plan to reform our trade policies and bring vast new jobs and wealth to America. This includes the following steps:
I’m going to direct the Secretary of Commerce to identify every violation of trade agreements a foreign country is currently using to harm our workers. I will use every tool under American and international law to end these abuses, and I will use our greatest business leaders and finest negotiators – and I know who you are, many of you are in the room.
We are going to start with NAFTA, which is causing so much damage to our country. We will entirely renegotiate NAFTA into a deal that will either be good for us or will be terminated until a brand new and productive deal can be signed.
We are also going to keep America out of the Trans-Pacific Partnership.
Next, I am going to instruct my Treasury Secretary to label China a currency manipulator, and to apply tariffs to any country that devalues its currency to gain an unfair advantage over the United States.
I am going to instruct the U.S. Trade Representative to bring trade cases against China. China’s unfair subsidy behavior is prohibited by the terms of its entrance to the WTO, and I intend to enforce those rules.
The problem with Trump's comments, here, are towering.

Trump simply has no understanding of comparative advantage. His thinking here is comparable to a man who has installed an elevator in a one story building. His comments are that silly to anyone who understands the rudiments of free trade and job flows. He doesn't get that jobs are being created overseas because demand for workers here is greater for other jobs (or because low-skilled workers are prevented from work because of high minimum wage laws.)

He also carries the Lump of Labor Fallacy around as though he is running around in gym shorts carrying an Olympic torch.

He really seems to think there is just a fixed number of jobs in the world. Or at least, his arguments lead to that conclusion if one were to follow the logic through on his statements. Does it really need to be pointed out that it is absurd to hold the view that there is a fixed number of jobs on this planet? The entire idea is an internal contradiction. If people are sitting around doing nothing, then they certainly can start providing services for each other. Wouldn't you think?

On another point, if other countries want to subsidize products sold to U.S. consumers, what is the problem? It means better deals for American consumers. It doesn't negate job opportunities here in America. There is always work to be done. There was work after the buggy whip maker jobs disappeared and after work for typewriter manufacturer jobs disappeared.

Those who consider Trump's anti-globalist position heroic are making a mistake.

Trump is not in favor of more freedom in trade. He is an advocate of more convoluted central planning of trade. There is nothing encouraging at all about Trump's trade positions.

If Trump as president carries out on his protectionist trade threats, the world would face a global dark age of trade.



  1. I guess the Libertardian logic is that "trade" is the highest virtue, not liberty. Ok Robert. If the world were as simple as "people want to give us their stuff for cheap", it would be easy. But, the world is a complex place (Ha) and the reason stuff is cheaper outside the US is because those countries actively make it easy to start and make things there, while the US government makes it more expensive to produce anything within our borders. So, instead of Free trade, we get "asymmetric" trade. Trump wants to reduce regulations and make it more competitive to make stuff within the US borders. Tell me how that is wrong?

    Oh, and libertardians don't have any right to complain when the US becomes just another third world nation, with no borders, no limits on government power and no civil liberties because of open borders. You think all the third worlders pouring into the US will become citizens and vote for constitutional limitations on government power? Cute hallucinations you libertardians have got there.

    1. Only a person completely oblivious to concepts and logic could come up with the worst oxymoron possible: "asymmetric" trade.

      Trade is never asymmetric.

      Crying about big bad government doesn't give your anti-trade tirade validity. Trade is ALWAYS beneficial, by definition.