For the Pacific Rim deal
Why history matters— but not to some
THIS TIME the fight isn’t between the president and the usual Republican hardliners in the House. If only it were, the established principle that free trade is the soundest of economic policies, as thinkers since Adam Smith have preached, wouldn’t be in trouble.
Instead the fight is an intramural one within the Democratic Party, pitting the president against the vested interests he usually courts— like various labor unions. Naturally enough, the leading contender for her party’s presidential nomination, Hillary Clinton, has finally come out against this laboriously negotiated deal with the Pacific Rim countries— after designing it.
When it comes to any matter of principle, on Ms. Clinton you shouldn’t count. For she’s always got her eye on partisan advantage, and could change her mind again, depending on which way the political winds are blowing. Her politics have got all the consistency of a weathervane, whether the issue is the Keystone pipeline or this latest trade deal.
Patiently negotiated with a dozen other countries, this deal covers almost 40 percent of the world’s economy, and runs hundreds of pages, including protection for trade secrets and provisions against computer hacking.
This is only the latest, complicated chapter in the long history of free trade versus protectionism, which included the onerous Smoot- Hawley Tariff during the Hoover administration, which helped bring on the Great Depression by inspiring other countries to raise their own tariffs on American imports.
Protectionism may be the first and worst reaction when an economy goes sour, making a bad problem only worse. To quote the astute Ilana Mercer’s summation of John Maynard Keynes, he had too much sense to be a Keynesian. “Doesn’t Keynesianism simply appeal to the worst in human nature?” she asked, with its worship of consumption over frugality, its preference for spending now instead of saving for the future? It pits country against country in a race to spend, not save.
Beggar- thy- neighbor policies tend to beggar us all, for we must all prosper together if we are going to prosper at all.
But there will always be those who believe they need to bail out only their own side of the boat, and then wonder why the whole craft— in this case, the world’s economy— goes under.