Beware the ‘national interest’
Explaining recently the“significant differences” still standing between Canada and the U.S. in the stumbling negotiations over NAFTA, Minister of Foreign Affairs Chrystia Freeland said “we are always going to clearly defend our national interests.” Around the same time in the U.S., commenting on a possible 50- per- cent tariff that the Trump administration is considering imposing on imported washing machines, aimed at South Korean manufacturers, a White House spokeswoman said t he president “will examine the facts and make a determination that reflects the best interests of the United States.” And in the very same week, as his government was intervening in the AT&T-Time Warner merger project, President Donald Trump himself declared that it is “not good for the country,” which is another way of invoking the national interest.
These are just examples in a daily flow of nationalinterest statements, but they help understand how deeply flawed the concept is.
For Canada’s federal government, defending “our national interest” includes defending supply management in agriculture. “Supply management” is the soviet- sounding name of the regime that restricts the supply of milk and poultry products on the Canadian market. These restrictions benefit the 22,000 farmers and farm employees in this sector at the expense of the 36,000,000 Canadian consumers who pay 34-per-cent more for their milk, 62- percent more for their eggs, and 49- per- cent more on their poultry.
Even if there were six million Canadians who are veg- ans, or who don’t like milk, eggs, and poultry, or who are allergic, or who are too young or too old to enjoy them, how can “our national interests” exclude the 30 million Canadians who are being forced to overpay for their groceries? Aren’t all these people part of the country?
And about those washing machines south of the border, IBISWorld, a marketresearch firm, estimates that fewer than 2,500 Americans are employed in manufacturing washers and dryers. These workers, plus the American shareholders of the two U. S. manufacturers of washing machines — Whirlpool Corp. and the Chinese- owned Haier Group, which purchased GE Appliances last year — would benefit from an import tariff. The price of domestic appliances has dropped by 19.1 per cent in the American consumer price index since 2001, largely because of imports. A 50- per- cent tariff would significantly increase domestic prices; indeed, its desire to boost prices is precisely why Whirlpool has asked for a tariff. Despite still holding more than a third of the American market, Whirlpool is struggling to compete with the prices of imported washing machines from Asia and Mexico. It is, however, quite efficient at whining to Washington and is an habitué of protectionist assistance.
Some 83 per cent of American households own a washing machine. It’s a fair bet that virtually all of the other 17 per cent pay, directly or indirectly, for the use of washing machines in laundromats, apartment laundry rooms, or to other suppliers of cleaning services, but let’s be conservative and ignore this group. We thus have at least 97 million American households which have a direct interest in the freedom to import washing machines. Accounting for the benefits to tens or even hundreds of thousands of people occupied in the washing-machine industry or holding shares in U.S. manufacturers still won’t make a dent in that number.
Aren’t these 97 million American households part of the country? Aren’t their interests part of the “national interest”? So how can something that goes against the interests of all these buyers of washing machines be in the national interest?
The president opposing the projected merger between AT&T and Time Warner in the name of what’s good for the country raises similar problems — although arguably more complicated. How can preventing some U. S. sellers from selling to voluntary U. S. buyers be good for the country? Aren’t these buyers and sellers part of the country?
The general question is how to fit diverging individual interests in a “national i nterest” — or, in other words, the good of the country? One way, as illustrated above, is to let some political authority determine which interests will count, and how much they will count. So, “what’s good for the country” gets determined by those in power, which actually means it’s decided by a tiny minority of politicians and government bureaucrats (of course, even a majority would still amount to a tyranny over the “national interest”).
The other way to see that a country’s national interests are served, when different people within it have different interests, is to define the national interest ( or social interest) as a common interest. That boils down to a system where everybody is equally free to pursue his own interests: Everybody is free to buy if he can find a seller, and free to sell if he can find a buyer. Bargaining is done by each individual or corporate entity for himself, not by some authority claiming it’s acting on behalf of all the people.
You might have heard of this second option. It’s called economic freedom and free enterprise.