John Robson: If We Want Free Trade, We Should First Practice It

Workers prepare artisanal cheeses at a production facility in Noyan, Que., on Oct. 11, 2018. Canada's dairy industry is heavily protected from competition through supply management. The Canadian Press/Ryan Remiorz

Commentary

Perhaps we need Sherlock Holmes to deduce how to respond to Donald Trump’s tariff threats. You might think it’s not exactly the famous detective’s line. But recall how in response to a weird warning note sent to Sir Henry Baskerville using letters clipped from a newspaper, Holmes drew Watson’s attention to a Times “leader” extolling free trade and was surprised everyone didn’t get the connection.

OK, OK, for Holmes what mattered, and it astounded him that everyone didn’t recognize it at once, was that the typefaces matched. For me, it’s that the passage the detective read out was: “You may be cajoled into imagining that your own special trade or your own industry will be encouraged by a protective tariff, but it stands to reason that such legislation must in the long run keep away wealth from the country, diminish the value of our imports, and lower the general conditions of life in this island.”

I grant that the arguments in favour of free trade are even more obscure today than the formerly beloved detective stories in which, among many other once-familiar references, one dog glowed while another did not bark. Indeed, way back in 1946, American journalist Henry Hazlitt, never alas as familiar as Henry Baskerville, let alone Holmes, wrote a passage some of us still recall without difficulty.

“A mere recital of the economic policies of governments all over the world is calculated to cause any serious student of economics to throw up his hands in despair,” Hazlitt wrote. “What possible point can there be, he is likely to ask, in discussing refinements and advances in economic theory, when popular thought and the actual policies of governments, certainly in everything connected with international relations, have not yet caught up with Adam Smith? For present day tariff and trade policies are not only as bad as those in the seventeenth and eighteenth centuries, but incomparably worse.”

At least people have heard of Smith, right? Well, not if they’re in politics or government, apparently.

I am not baffled that Donald Trump’s views on economics do not always smoothly articulate the neoliberal consensus that prevailed in the wake of World War II. To him and many of his supporters, that consensus dwelt in a swamp. What baffles me is that, faced with Trump’s challenge to an open trading world, neoliberals faint with pearls firmly clutched, then on recovering endorse his views in an effort to refute them.

In Canada, for instance, politicians across the board are braying, with a sprinkling of mild expletives to make them sound resolute rather than trite and vulgar, that everybody knows trade restrictions only hurt those who impose them. So if Trump dares impose them, harming Americans, why, we’ll do it twice as hard and inflict twice as much pain on Canadians. Ha! That’ll show him. You cut off your own nose? Watch me do both my ears.

Um no. Not in practice or in theory. They may be cajoled into imagining that their own country will be encouraged by a protective tariff, but it stands to reason that such legislation must in the long run keep away wealth. Let foreigners hurt themselves with protection; we will enrich ourselves with unilateral free trade like 19th-century Britain. As everybody once knew.

Or did they? True, Western elites renounced protectionism in the wake of the actual and devastating World War II, widely believed to have been triggered in significant part by trade “wars” in the 1930s. But even then, most politicians did their level best to inflict free trade on others while avoiding it themselves, as though Smith had never written.

The persistent defence of carveouts, subsidies, and protectionist trickery was always weird because the people doing it claimed to scorn tariffs and quotas. But they talked and acted like 18th-century mercantilists convinced trade was a fight, not a dance. It was great if our stuff beat their stuff, even kicked sand in its face afterward, and terrible if their stuff beat ours. That we might, as per British economist David Ricardo (sadly an even less familiar figure than Rodger Baskerville), be engaged in a mutually beneficial exchange of our good stuff for theirs, all gaining by doing what we are relatively better at, escaped everyone like Selden evading patrols on the moors in “The Hound of the Baskervilles.”

Even today, it doesn’t matter how “conservative” or “libertarian” a Canadian politician is. They shelter supply management and industrial subsidies from those wretched open commerce obligations they attempt to impose on others. They won’t even get rid of internal interprovincial barriers. Free trade is for foreigner looooosers, if we can trick them into it. Or so they evidently think, given how they talk and what they do.

The curious incident of protectionists in the night is that they laughed at Trump’s protectionism. But they did not bark at their own.

Views expressed in this article are opinions of the author and do not necessarily reflect the views of The Epoch Times.