Trump Versus a Bi-Partisan Liberal Establishment: The Trade-Immigration Connection

The Boston Globe adheres to the liberal ideology, even as it is critical of Big Business in other regards. It rejects Trump as a xenophobe because he wants to “make America great again” by protecting the economic interests of its citizens first. The left-wing newspaper thus promotes House Speaker Paul Ryan as its favorite for the Republican nomination, as he is known to favor both free trade and mass immigration in the classical liberal fashion. Thus is formed a bi-partisan Establishment without any ideological “borders” between them – but also without any political support beyond corporate boardrooms, faculty lounges and a few surreal publications.

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By William R. Hawkins | April 25, 2016

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The Boston Globe’s fake front page supposedly attacking President Donald Trump by “reporting” the deportation of illegal aliens and the threat of a “trade war” with China revealed more about the delusions of liberalism that endanger the future of the United States than any threat from the Republican front-runner. The paper’s left-wing editorial staff proclaimed Trump’s vision “as deeply disturbing as it is profoundly un-American” indicating that they know little about the history of the U.S. and how it became the world’s leading power.

There are two links between “free trade” and mass “illegal” immigration. One is the practical use by certain business interests who have become transnational, believing that their corporate interests are outside, or even above, the interests of the national communities in which the general public lives.

“Free trade” was once advocated as a way to break down foreign barriers to America-made exports by a confident domestic industrial sector that believed it could outcompete overseas rivals. But over the last few decades, it has taken a different form in practice. Rather than support U.S. jobs and incomes, it has become a strategy for undermining both as putative Americans corporations transform themselves,  becoming foreign rivals to domestic enterprises by outsourcing production to lands offering low-wage workers whose rights are trampled by dictators. The embrace of Communist China by Big Business is the most salient example, posing as it does the additional geopolitical sin of “trading with the enemy.”

The income stagnation of the American middle class is not an unintended consequence of business conduct, it is the goal. Corporate planners have sought to cut costs by holding down salaries and wages. The chosen way is to substitute cheaper foreign workers for Americans who have grown accustomed to good pay and decent conditions. While firms want affluent customers, they don’t want to create that affluence.

This brings us to the second half of the trade-immigration connection. The trade deficit has slowed the economic recovery from the Great Recession by diverting both government and private stimulus spending to foreign economies, creating jobs overseas rather than at home. The domestic jobs that have been created have almost entirely been in service sectors not subject to off shoring or trade competition. Yet, business firms still want lower costs, so if the jobs cannot be sent to cheap laborers, the cheap laborers will be brought here. The aim is the same: replace some “expensive” Americans directly and put downward market pressure on the wages of the rest.

While corporate greed is easy to understand, how it could have taken control of national policy is harder to understand except within the context of corruption; the influence of money in politics that has subverted officials and lawmakers from their duty to the larger commonwealth. After all, groups like the Fund for Growth, whose backers have deep ties to China, openly brag about how much they are spending to defeat Trump in the primaries and to lobby Congress against trade sanctions. But what allows politicians, lobbyists and pundits to embrace corruption and still sleep at night is ideology; a set of fabricated notions that are given precedent over traditional concerns of social order, community fidelity and national security. That ideology is classical liberalism, a doctrine that is not only the foundation of the modern Left, but which has also infected much of the modern Right, making it difficult for many in the “official” conservative movement to actually conserve anything in America.

Consider the argument for “free trade” made by Jonah Goldberg, editor-at-large of National Review Online, long the flagship of the Conservative Establishment. He says he understands where Trump supporters are coming from on the Right; they are nationalists. But he then tries to argue that there is no conflict between “free trade” and patriotism because the U.S. has long been a trading nation which has still generated incomes that are among the highest in the world. What he does not understand is that the nature of the trading relationship has changed (as has the pattern of immigration) in adverse ways.

The U.S. became the world’s largest economy at the dawn of the 20th century under the policy of protectionism. It secured the large, affluent home market for American producers, both firms and their employees. As Teddy Roosevelt proclaimed, “Thank God, I’m not a free trader!” Abraham Lincoln had felt the same way, as had George Washington. Alexander Hamilton had set out the strategy in his 1791 Report on Manufacturers. It is the free trade notion that is un-American, even anti-American.

Goldberg quickly shifts to how the open U.S. market has helped foreign workers. He writes, “Roughly 700 million Chinese people alone have escaped extreme poverty since 1980, and most of that is attributable to China’s decision to embrace the market economy and international trade.” Of course, Beijing’s communists have only done part of what Goldberg claims. The Chinese economy is state-capitalism, not “free market” capitalism, with all the major sectors still subject to government ownership or control. It has exploited the open American (and European) markets to support its growth with massive trade surpluses, having only embraced international trade in one direction. It has thus copied the earlier American model, which had exploited the “open” British Empire after London adopted “free trade” in the 19th century (a decision that led to stagnation and strategic decline as a mercantilist Germany outpaced it).

Goldberg tries to claim that “protectionism is corporate welfare” because “Countries don’t trade with other countries; businesses and consumers transact with other businesses and consumers.” Yet, this ignores the obvious (as ideologues often do) that corporations and consumers exist within larger national societies, and their aggregate actions affect those societies. The ideology of “free trade” is meant to break that relationship, so that firms can pursue their own interests without their affect on society being taken into account.

Even Adam Smith did not go as far as Goldberg in rejecting economic nationalism. In The Wealth of Nations, Smith wrote that the “defense of Great Britain depends very much upon the number of its sailors and shipping. The act of navigation, therefore, very properly endeavors to give the sailors and shipping of Great Britain the monopoly of the trade of their own country.” He likewise approved of paying bounties for the production of naval stores in the American colonies and prohibiting their export outside the British Empire. Such regulations made the empire less dependent on foreign sources. Smith also felt that England was justified in using tariffs and other restrictions in retaliation for policies used by others to gain unfair advantages. Trump’s desire to declare China’s currency manipulation an unfair trade practice (which has wide support among economists and which he could do under existing U.S. law) and impose countervailing tariffs is in accord with Smith’s advice. It would also strike a blow against an increasingly aggressive geopolitical rival who is using the “gains from trade” to support a military buildup aimed at changing the balance of power across the Pacific Rim.

Goldberg and other putative conservatives have been subverted by classical liberal notions through the infiltration of what is called libertarianism. The lure is that libertarians oppose socialism, so they must be on the Right. But this is false, for the basic worldview of classical liberals/libertarians is antithetical to true conservatism (which is about much more than capitalism anyway). Consider Ludwig von Mises, whose writings have been very harmful to immature conservative minds. He felt, “under free trade and free migration, no individual is concerned about the territorial size of his country.” Borders can move or vanish, it matters not to an “individual” who can move and trade wherever he wants; he is a citizen of the world – except it is not this world.

When Mises asserts in Human Action, “in such a world without trade or immigration barriers no incentives for war or conquest are felt” he is merely echoing Richard Cobden who claimed in the early 19th century that commerce was “the grand panacea” and that under its influence “the motive for large and mighty empires, for gigantic armies and great fleets would die away.” Explain that to Hitler and Stalin, Mao and Ho, Khamenei and Al-Baghdadi, Putin and Xi. In the real world, economic competition is part of the larger international struggle. The winners have the wealth to deploy “armies and great fleets” to shape the course of history.

Goldberg’s intellectual confusion is astounding. He correctly notes that “the left adores cosmopolitanism, the United Nations and what some people call ‘transnational progressivism,’ or ‘one-worldism.’ Conservatives tend to scoff at all of the above, preferring national sovereignty and the American Way.” Yet, he embraces cosmopolitanism on trade. One can only conclude he does so because the Chamber of Commerce has told him to as a comfortable member of the Establishment.

The Boston Globe adheres to the liberal ideology, even as it is critical of Big Business in other regards. It rejects Trump as a xenophobe because he wants to “make America great again” by protecting the economic interests of its citizens first. The left-wing newspaper thus promotes House Speaker Paul Ryan as its favorite for the Republican nomination, as he is known to favor both free trade and mass immigration in the classical liberal fashion. Thus is formed a bi-partisan Establishment without any ideological “borders” between them – but also without any political support beyond corporate boardrooms, faculty lounges and a few surreal publications.


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.