The implicit question: how much does it cost if it’s free?
An American System for America Prosperity
The ideology of global free trade is not American—nor is it the free market system. America had the highest tariff rates in history at the same time we saw the greatest economic expansion in history.
Our founders understood that America could not be independent and strong if we relied on other nations for our manufactured goods. They understood the United States had the natural resources, the technology, the labor force, and ample customers at home to support domestic industry and be largely self-sufficient.
As an example to his countrymen to “Buy American,” George Washington wore a suit of American-made cloth at his inauguration in 1789. “I hope it will not be a great while before it will be unfashionable for a gentleman to appear in any other dress. Indeed, we have already been too long subject to British prejudices,” he wrote. Washington believed the United States could manufacture as well as farm, and he instructed Treasury Secretary Alexander Hamilton to come up with a plan to develop industry on these shores.
Hamilton’s plan, detailed in his 1791 Report on the Subject of Manufactures, called for tariffs that would raise revenues and protect infant American industries against predatory competition, and government procurement contracts to encourage American manufacturers.
The American System, also called the American School of economics, guided U.S. national economic development from the earliest days of the republic, through the Civil War, and into the better part of the 20th century. It built the United States from an agrarian frontier society into the world’s largest economy and greatest industrial power.
The American System had three basic tenets to promote domestic industry. The government would:
- use tariffs to discourage imports, and leverage the purchasing power of government to give preference to domestic producers;
- invest in roads, ports, dams, canals, and turnpikes—then called “internal improvements,” now called infrastructure—to facilitate commerce; and
- regulate credit to spur economic development and deter speculation.
Congress passed the Tariff Act of 1789 as its second piece of legislation. The opening section reads, “It is necessary for the support of the government, the discharge of the debts of the United States, and for the encouragement and protection of manufactures that a duty be laid on goods and merchandise imported.”
The tax on imports raised revenue to fund the government and prevented foreign goods from smothering our own infant industries. Tariffs were the nation’s primary source of revenue for its first 150 years. Consider: we taxed foreign industries, not our own.
In 1791, Treasury Secretary Alexander Hamilton delivered his Report on the Subject of Manufactures to President Washington. It laid out the plan for the federal government to nurture the growth of domestic manufacturing industries in the United States rather than allow the new nation to depend on manufactured goods from abroad.
Hamilton declared: “Not only the wealth; the independence and security of a Country, appear to be materially connected with the prosperity of manufactures. Every nation…ought to endeavor to possess within itself all the essentials of national supply. These comprise the means to Subsistence habitation clothing and defence.”
A diversified economy of agriculture, merchants, and manufacturing would provide opportunities for Americans of all skills, “furnishing greater scope for the diversity of talents and dispositions which discriminate men from each other,” Hamilton wrote.
Hamilton’s report stood in contrast to “free traders” who believed America should confine itself to farming, export raw materials, and buy manufactured goods from Great Britain.
NOTE: I am not an economist, nor have I ever played one on TeeWee. That said, I hadn’t realized before just how recent the Neocon obssession with “free trade” really was until I read this fascinating piece, nor had I known just how adamantly most if not all of the Founders were opposed to any such notion, ditto for several of our later Presidents such as Lincoln and McKinley. Buck Throckmorton, via whom etc, has this to say about it:
Principled Free Traders™ have often been the target of my writing, not because of my having a deep ideological hostility to free trade, but because they have used the term “free trade” as a false-flag for their globalist hostility to US sovereignty, and for their open contempt for working-class Americans.
Unlike 1990s-era free trade, which was promoted as being about reciprocal, barrier-free trade, America’s 21st Century Principled Free Traders™ have advocated for unilateral surrender to foreign mercantilism. (Mercantilism is the economic theory that a country’s wealth increases by having a surplus balance of trade, using protectionism as necessary to ensure the favorable trade imbalance.) Principled Free Traders™ favor unrestricted access to the US market for products made in hostile, authoritarian countries, while gladly accepting that those countries maintain tariffs and prohibitions on importing products from the US.
After doing a learn-to-code grave dance on those working class Americans who lost their middle-class lifestyle, Principled Free Traders™ argued that it was all cool, because products made by cheap foreign labor (and slaves) gave Americans more spending power.
As for me, the reality is that I’ve historically been more of a reciprocal free trader – what many of us called “fair trade” – than a protectionist, thus my contempt for the globalists who actively sought to harm America in the name of free trade.
Our founders and our greatest Presidents agreed that that the US must never be dependent on foreign countries for food, provisions, or the ability to secure our national defense. And even the Father of Capitalism stood for economic nationalism.
I’m proud to be an economic nationalist if the alternative is “free trade” that is designed to harm Americans.
Amen to all that, my friend. Funny, innit, how very much of the Vichy GOPe/Uniparty/Neocon agenda does indeed seem designed to damage AINO rather than to help, their indignant protestations to the contrary notwithstanding.
So called “conservatives” argued that one of the rock solid conservative principles is unrestrained free trade in the run up to the 2016 election because Trump dared to suggest putting tariffs in place on china and the EU.
There is no such conservative principle and there never has been. “Free trade” is a disaster and is the primary reason I’m not a big Reagan fan. President Reagan thought that we could mow each other lawns and we’d all get rich in that service economy.
Trump is the first president in my adult lifetime that both understands the economy coupled to prosperity and isn’t afraid to tackle the issue head on. It is the #1 reason the virus was loosed upon the world – the US economy, already headed to the moon, was set to take off in a way never seen before. They, the corrupt deep state commies had to stop it, and stop it hard lest the American people get the idea that it really is that simple.
Reduced manufacturing = poverty
No manufacturing = extreme poverty
Which way do you think we’re headed and who do you think gives a damn?
Ayup, t’is true. Trump is specifically commended in the article for that stand, which I remember lauding here at the time my own self.
I do not think it was Reagan saying the Mow Each Other’s Lawn Makes US Rich meme.
Also, recall how Reagan put Tariffs on Japan.
Reagan was much closer to Trump than Bush.
And it was HW Bush that called it Voodoo Economics and opposed Reagan.
You are taking what the Bush Cabal did to distort “Free Trade” and ascribing that to Reagan.
Nope. it was Reagan. He didn’t say “Mow lawns” but it was the same thing. Basically he said we didn’t need manufacturing, a service economy would work just fine.
Can you give me a link to the speech or whatever where Reagan said that?
How did hitting Japan with tariffs and forcing them to revalue their undervalued, manipulated currency fit with that idea?
Japan then moved manufacturing into America. In Right to Work States like TN. The Japanese Automakers still have lots of factories in the American South.
There never was Free Trade going on.
The whole of the Chinese markets, for instance, are manipulated. The price of their currency is set by the government. You cannot buy or sell the Yuan in any meaningful amount without registering EVERY transaction with a government entity called SAFE and you have to justify each transaction to them or they disallow it. Then you have to transact at the price their government set. That’s just one Market Distortion.
You cannot have “Free Trade” when at least one participant does not have Free Markets.
And I haven’t even gotten to how the US and all Western Nations manipulate our own Markets.
The “Free Traders” really mean raid the American economic system as no one else allows anything remotely resembling free trade internationally.
Your “free markets” comment is spot on.