Conservatives Must Insure Capitalism Serves the Nation

The group National Foreign Trade Council has opposed all sanctions on Iran from the start of the nuclear crisis. Iran has oil money and NFTC members want to do business with the regime regardless of any other consideration. Indeed, USA Engage was created to lobby against all sanctions against all foreign adversaries and to champion trading with the enemy as a right of “free enterprise.”


By William R. Hawkins | April 16, 2014

With President Barack Obama increasingly resorting to class warfare rhetoric to divert attention from an anemic economy and continuing high unemployment, the temptation on the Right is to simply man the other side of the barricades being erected by the Left. This would be a mistake. In a democracy, conservatives must champion the unity of the nation and policies that support broad growth, if they are to build an enduring majority coalition. They need to reject the notion of class warfare, not just pick a side in a struggle declared by their opponents. This is especially true given that conservatives are often pulled by their putative libertarian allies into giving a blank check to business interests under the rubric of “free enterprise.” While conservatives will naturally, and properly, defend private property, the profit motive and income inequality; the context must be that these gains flow from work that benefits society. Capitalism will always outperform socialism; but not everything that makes money is legitimate, moral or defensible. The key is to know where to draw the line.

A conservative movement cannot be merely “the party of business” because some of what is done in the name of commerce is anathema to the principles and values of the Right. Case in point: the National Foreign Trade Council. The NFTC claims many of the largest corporations in America as its members, including  Caterpillar, Chevron, Coca-Cola, eBay, Ford, General Electric, Google, JPMorgan Chase, Microsoft, Proctor & Gamble and Wal-Mart among others. NFTC members represent all sectors of the capitalist system, but they often do not represent what is best for the United States as a nation-state seeking to protect its prosperity, traditions and security in a dangerous world. NFTC interests are too narrow and self-serving to provide guidance for the larger society.

Trading with the Enemy

Last January, over the course of two days, the NFTC issued press releases endorsing three positions taken by the Obama administration. On January 27, though its USA Engage front group, it voiced opposition to increased sanctions on Iran. In an open letter to the U.S. Senate, USA Engage Director Richard Sawaya called the November interim agreement to engage in comprehensive negotiations “a common sense understanding.” The deal, however, only suspended Iran’s nuclear program for six months in exchange for a reduction in existing sanctions. Talks are to continue, which Iran has come to regard as a substitute for meaningful American actions. John Bolton, who served as under secretary of state for arms control and international security before becoming UN ambassador, described the deal as an “abject surrender” by the U.S. He stated, “Iran can see these negotiations as a way to buy time, to get some relief from the sanctions and basically continue to make progress on the nuclear program.” With Iran heavily engaged in the Syrian civil war, Tehran needed a breather on the nuclear front and got it.

Sawaya acknowledged the case for the Senate legislation, “The additional sanctions proposed are merely contingent on Iran’s keeping its end of the bargain. And, because sanctions have forced the Iranians to bargain, the prospect of more crippling sanctions will motivate them to negotiate away their entire nuclear capability.” Yet, he still opposed S. 1881, alleging without logic or evidence that it would actually guarantee “the failure of the talks.” The talks are not the point. The group has opposed all sanctions on Iran from the start of the nuclear crisis; with USA Engage consistently giving a negative rating to members of Congress who vote for sanctions on Tehran. Iran has oil money and NFTC members want to do business with the regime regardless of any other consideration. Indeed, USA Engage was created to lobby against all sanctions against all foreign adversaries and to champion trading with the enemy as a right of “free enterprise.” Thus foreign foes know they have rich friends within the American political process. Such a posture, however, rightfully poisons the image of business among the American public.

Not that the NFTC is unique in its outlook. Some of the largest British corporations formed the Anglo-German Society in 1935 to conduct commercial engagement with the Nazi regime. They claimed their lust for profits also advanced the cause of peace; but all they did was expand Hitler’s capacity to wage war.

Outsourcing Work, Importing Poverty, Weakening American National Defense

On January 29, NFTC endorsed two other major Obama initiatives: “fast track” trade negotiating authority and amnesty for illegal immigrants. It was alleged in standard fashion that cutting Congress out of its constitutional role of “regulating foreign commerce.” The “fast track” procedure for legislative implementation of trade agreements limits debate and prohibits amendments. The claim is that it is needed to open export markets and boost domestic economic growth. Yet, the “free trade” policy NFTC and other business groups have favored has primarily opened the American market – the largest in the world, to imports from foreign factories. Nominally American corporations have outsourced production to these overseas factories. The result has been massive trade deficits, $688.4 billion last year in goods. This has slowed economic recovery and cost millions of good American jobs.

It has weakened the nation. The Pentagon’s Defense Science Board (DFB) in its October 2013 report, “Technology and Innovation Enablers for Superiority in 2030” warns the shift of manufacturing to foreign nations “affects U.S. technology leadership by enabling new players to learn a technology and then gain the capability to improve on it. An additional threat to defense capabilities from offshore manufacturing is the potential for compromise of the supply chain for key weapons systems components.” The DFB study defeats NFTC propaganda:

Offshoring of manufacturing capabilities resulted from capital inducements such as wage structures, tax rates, weaker environmental regulations or enforcement or available resources. These shifts are causing lower standards of living as a result of the loss of fabrication facilities, and are further exacerbated by subsequent losses in underlying technology, such as the migration of supporting design and testing capabilities

Promoting Amnesty and Illegal Immigration

The NFTC press release also stated, “In addition to furthering our trade relations, we also need new immigration policies that position the United States to attract and retain the world’s best and brightest, ensuring long-term competitiveness.” Yet, the main thrust of the Obama immigration reform is amnesty for illegal immigrants who as a group are poorly educated and unskilled. Their appeal to business is the same as the workers to which work is outsourced overseas; they are cheap labor.

But there is no such thing as cheap labor. Nearly half of all illegal aliens are on some form of welfare; a number that will jump after amnesty allows them to come out of the shadows and sign up for public assistance in the open. If firms don’t pay their workers a living wage, others are expected to make up the difference through income redistribution programs. And a “reform” that leads to the voting booth will increase political support for the welfare state and higher taxes to finance social programs to deal with imported poverty. Again, what the NFTC and other business lobbyists want is bad for the country as a whole and would undermine conservative social values and political strength.

Ignoring the Wider World

In the wake of the Russian invasion and annexation of Crimea, the NFTC is lobbying against any disruption of economic ties with Moscow. This time, it was opposed to the Obama administration. An NFTC statement on March 21 argued, “potential sanctions contemplated in the most recent Executive Order would do real damage to U.S. companies with no predictable result regarding Russian responses. At least, however, the President’s orders remove any warrant for Congress to legislate sanctions, which would ipso facto foreclose diplomatic adaptability.” The real meaning of “adaptability” is “appeasement.”

Earlier in the month, Alan Wolff, chairman of the NFTC board, showed how incredibly shallow is the group’s view of world affairs. In an essay celebrating the group’s history, he made light of foreign policy. His one paragraph devoted to “Geopolitics” deserves quotation at length to prove that the nonsense presented is not due to editing:

A century ago, in August, the British and Germans reversed their close trading relationship. Britain imposed a blockade on all contraband destined for Germany, and that included food. Nine months later the Lusitania, six days out of New York bound for Liverpool, was sunk by a German submarine as pay-back. Going forward, sanctions will likely always play a role, though they should not be a dominant sustained condition of world trade.

What really happened in August 1914 was the outbreak of World War I. For the largest conflict in history (up to that time) to be treated merely as a disruption in trade shows how blind the American business community can be. Here, the establishment’s implied notion that while millions fought and died for the survival of their countries, merchants should have remained “free” to trade with the enemy is the kind of immorality that staggers the conscience. The concepts of “honor, duty, country” are completely alien to these empty suits.

If the conservative movement cannot stay on a higher national plane, it will never win public trust, nor should it.


William R. Hawkins, a former economics professor and Congressional staffer, is a consultant specializing in international economics and national security issues. He is a contributor to SFPPR News & Analysis.