Media Share 9/MEDIASHARE_09.ISO/educatio/impr9302.zip/IMP9302.ZIP/IMPR9302.TXT

Text File | 1993-03-09 | 14KB | 285 lines

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                  Imprimis, On Line  -- February, 1993

        Imprimis, meaning "in the first place," is a free
        monthly publication of Hillsdale College (circulation
        435,000 worldwide). Hillsdale College is a liberal arts
        institution known for its defense of free market
        principles and Western culture and its nearly 150-year
        refusal to accept federal funds. Imprimis publishes
        lectures by such well-known figures as Ronald Reagan,
        Jeane Kirkpatrick, Tom Wolfe, Charlton Heston, and many
        more. Permission to reprint is hereby granted, provided
        credit is given to Hillsdale College. Copyright 1992.
        For more information on free print subscriptions or
        back issues, call 1-800-437-2268, or 1-517-439-1524,
        ext. 2319.

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                       "Free Trade in the 1990s"


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                          Volume 22, Number 2
                     Hillsdale College, Hillsdale,
                      Michigan 49242 February 1993

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        Preview: The 19th annual Ludwig von Mises Lecture
        Series at Hillsdale College was held in the spring of
        1992, just as the issue of free trade was again
        becoming a headline issue in American politics. The
        benefits of a free global economy are egalitarian; it
        is true that "a rising tide lifts all boats." Free
        trade is not, according to the old mercantilist
        thinking, some zero sum game in which one nation or one
        individual wins at the expense of another. It offers a
        higher standard of living for all, dramatically
        improved goods and services, and an international
        division of labor that makes such goods and services
        for the first time affordable even for the poor, while
        creating millions of new jobs around the world.

        .....Throughout his life, the economist Ludwig von
        Mises argued that one of the fundamental causes of war
        among nations was economic nationalism. When nations
        look upon one another as economic enemies rather than
        as potential trading partners, their governments resort
        to political and economic intervention, retarding their
        own citizens' material well-being and creating
        conditions ripe for international tension and conflict.
        Free trade and peaceful market competition, Mises
        claimed, were the means for both prosperity and peace.

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                  "'Economic Justice' and the Chimera
                     of Special Interest Politics"

                          James Bovard Author,
                            Fair Trade Fraud

        Fair trade, as the term is now used, means government
        intervention to direct, control, or restrict trade.
        Fair trade means government officials dictating what
        Americans will be allowed to buy and what prices they
        will be forced to pay.

             In some areas, America is one of the most
        protectionist industrial countries in the world. Our
        agricultural import quotas permit each American citizen
        to consume the equivalent of only one teaspoon of
        foreign ice cream per year, two foreign peanuts per
        year, and one pound of imported cheese per year.

             Congress is imposing over 8,000 different taxes on
        imports. While the average American tariff is now
        around five percent, some tariffs are in the
        stratosphere. Low-priced watches are hit with an
        average tariff of 151.2 percent. Tobacco stems must pay
        a 458.3 percent penalty. Tariffs on some low-priced
        shoe imports are 67 percent....Our dumping law is so
        comprehensive and arbitrary that the Commerce
        Department almost automatically convicts 95 percent of
        foreign companies....If this is free trade, then
        perhaps the federal income tax system is truly helping
        Americans by cutting their freedom of choice in how
        they spend their paychecks.

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                        "Economic Freedom and a
                    New Liberal International Order"
                           Richard M. Ebeling
                        Ludwig von Mises Chair,
                           Hillsdale College

        In the 19th century, the advocates of economic liberty
        and free trade could point to the injustice of a system
        that gave privileges to a few, while making the vast
        majority bear the burden. This old system of privileges
        and protections went against the grain of the new
        beliefs in political democracy and equal treatment
        before the law.

        .....With the spread of the democratic ideal and the
        enlargement of the voting franchise, people came to
        view government as no longer the master, but rather as
        the servant. But the servant for what? For equal
        protection before the law and equality in civil
        liberties, certainly. But unfortunately in the 20th
        century government is increasingly viewed as an agency
        that does things for the people, rather than merely
        acting as the "nightwatchman" who guards their life,
        liberty, and property.

        .....What people have increasingly wanted government to
        do is: guarantee their jobs and incomes; protect them
        from foreign competition and limit the entry of new
        competitors at home; assure them "living wages" for
        their labor, and "fair" and "reasonable" prices for
        their products; protect them from the common mistakes
        of everyday life; and relieve them of any
        responsibility for the community efforts that would
        otherwise demand of them charity and the giving of some
        of their free time. And all these guarantees,
        protections, and securities are to be provided at
        someone else's expense....The Age of Democratized
        Privilege has arrived. And with it has also come the
        New Protectionism.

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                     "The Technological Revolution:
                  Destroying Global Economic Barriers"
                            Richard McKenzie
                        Professor of Economics,
                    University of California-Irvine
                      Author, Quicksilver Capital

        Many commentators fear that government regulators have,
        and will continue, to run roughshod over our freedom to
        trade. In my view, international trade has become freer
        over the last several decades, and it will only become,
        gradually but relentlessly, even freer as we turn our
        attention toward the 21st century...not because
        protectionists will ever lose their myopic focus on
        narrow self interests (to the detriment of the rest of
        society), and certainly not because politicians will
        become any more knowledgeable about the benefits of
        free and open world trade. (If we had to rely on a
        rejuvenation of our political leaders' courage and
        intellect, we would surely despair.)

        .....Rather, the politicians and policymakers will be
        brought, kicking and screaming, to freer trade, unaware
        that their growing impotency to cater to
        protectionists' appeals will be the result of
        reinvorated technological and economic forces that are
        far beyond the power of government to control....

        .....Today, technology permits people and their capital
        to be far more fugitive, far more capable of bounding
        over government borders, far more like quicksilver --
        slippery, elusive, and hard to contain and control.

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               "A Monetary System for the Global Economy"
                              Judy Shelton
                        Senior Research Fellow,
                           Hoover Institution
                    Author, The Coming Soviet Crash

        We live in a world where the prices of internationally-
        traded goods are subject to the negotiating tactics of
        a clique of nations who rig the currency markets as
        they see fit. The value of the dollar or the yen or the
        deutsche mark is not determined by natural market
        forces so much as by the ability of government
        officials from the United States, Japan, and Germany to
        politically and economically intimidate each other and
        the other players in the world....

             We should not permit our finance officials to
        collude with other nations to manipulate the dollar
        exchange rate against Japan whenever Washington decides
        that Japanese-made goods are becoming too popular with
        American consumers. Why should we cede to government
        the right to spend untold sums in order to, in the
        parlance of the finance ministers, make "corrections"
        in the currency markets whenever officials deem it
        politically useful?

             The only proper foundation for an open world
        economy dedicated to free trade is sound money based on
        a universal standard of value that transcends the
        threat of protectionist devaluations.

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                   "An Open Letter to the President:
                           Free Trade Works"
                               Dick Armey
                  U.S. House of Representatives (R-TX)

        Adam Smith virtually invented the discipline of
        economics in 1776 with the publication of his
        monumental treatise known today as The Wealth of
        Nations. The same year saw the birth of the greatest
        free market experiment in the history of the world -
        the United States. Here was proof that freedom works.

        .....It is important to note that Smith wrote in
        reaction against mercantilism -- the practice of trying
        to "create" wealth for a nation by restricting trade.
        Smith argued that only when individuals are allowed
        free exchange is real wealth created, and "what is wise
        and prudent in the affairs of individuals can scarcely
        be folly for nations." Later another classical
        economist, David Ricardo, refined Smith's argument by
        developing the principle of "comparative advantage."
        The lesson of this principle is just as individuals
        have differing talents and levels of productivity, so
        do industries and so do nations. No nation can have a
        comparative advantage in every industry. So it follows
        that every nation will prosper by exporting some goods
        and importing others. And this specialization works to
        the benefit of all nations.

        .....Armey's Admonition #1: Know that euphemisms for
        restricting trade are created by those who benefit from
        restrictions.

        .....Armey's Admonition #2: Be skeptical of gloomy
        prognostications from people who are in the business of
        peddling more government.

        .....Armey's Admonition #3: Beware those who
        manufacture data for the sake of promoting an agenda.

        .....Armey's Admonition #4: Never underestimate the
        ability of Washington to perceive the opposite of what
        is actually happening and to conjure up the data to
        support its perception.

        .....Armey's Admonition #5: Governments punish success
        and reward failure.
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