The power to tax is the power to start a fight. It's a lesson politicians never learn.
The income tax stands as the chief warrior trying to incite insurrection at home. while high tariffs, import quotas, embargoes,
and the smuggling they generate threaten trade wars, which light the fuse to shooting wars.
Even many libertarians believe some form of traditional taxation (confiscation) is necessary to fund a minimal government,
but this establishes a double standard, exempting government from moral law. If we donšt have the right to seize wealth,
we canšt transfer that nonexistent right to government. Though state officials often act like little Caesars, they're
our servants, and who in their right mind would give a servant the authority to initiate force against oneself?
In granting government a monopoly on the use of force, we can only allow it for retaliatory purposes, and only against those
who initiate it. Coercive taxation should be illegal. Government must support itself through voluntary means,
like the rest of us do.
Most people accept some degree of tariffs as part of the cost of doing business across national borders. Yet,
the philosophy of the General Agreement on Tariffs and Trade (GATT), and its offshoot, the World Trade Organization (WTO),
was to eliminate all barriers to international trade. Yes, we know the WTO is turning interventionist and trying to
become a governing power. It's becoming a political organization in the usual sense of the term: favoring certain industries
and countries over others.
But GATT, which was founded after World War II, didn't start out that way. Why were countries and corporations who
are still hostile to unrestricted trade within their own borders so eager to establish it across their borders? After
decades of Keynesian and Marxian brainwashing through every conceivable outlet, which included the silencing, ignoring, and
smearing of free market views, how on earth did so many countries come to agree that laissez-faire between nations is the
road to peace and prosperity?
Perhaps even the political leaders of that era could see a causal connection between trade restrictions and Hiroshima.
After World War I, countries dove into protectionism under the erroneous belief that restricting trade through embargoes,
high tariffs, and quotas would help foster home industries and promote the general welfare.
"World commerce spiraled into a trade war in the 1920s and 1930s," writes Robert F. Graboyes of the Federal Reserve Bank
of Richmond. "One nation would impose tariffs or quotas, another would retaliate, and trade dissolved away. Economists
disagree over how much this trade war deepened and lengthened the Great Depression, but they generally agree that protectionism
contributed to the crisis." [1]
And they generally agree that some countries scapegoated other nations or other people in justifying aggression.
Economics professor E. Kwan Choi of Iowa State University notes that in "an effort to give an early boost to trade liberalization
after the Second World War - and to begin to correct the large overhang of protectionist measures which remained in place
from the early 1930s - tariff negotiations were opened among the 23 founding GATT 'contracting parties' in 1946. This first
round of negotiations resulted in 45,000 tariff concessions affecting $10 billion - or about one-fifth - of world trade."
[2]
In 1995 GATT replaced itself with the WTO, which currently has 144 member nations. Through a series of negotiations
among 102 countries during the 1970s, GATT managed to bring the "average tariff on manufactured products down to 4.7 per cent
compared with about 40 per cent at the time of GATT's creation." [3]
Lower tariffs alone couldn't prevent economic recessions in the 1970s and early 1980s, so governments devised other ways
to protect home industries from more efficient foreign competitors. GATT's multilateral approach gave way to bilateral
trade agreements to fight the business slump, and this ultimately undermined GATT's credibility. GATT lasted 47 years as a
way for countries to reduce trade barriers.
Free trade canšt be fostered by committees. It can only come about through a government's commitment to let it happen.
Politicians today owe favors to industry for lavish campaign support. As long as wešre committed to interventionism,
a legacy we owe to Honest Abe, politically-connected industries will push for protectionist measures. Thus we have the
spectacle of President Bush unabashedly approving a 30-percent tariff on foreign steel for the alleged purpose of helping
U.S. steel firms adjust to "surges" in steel imports. It will accomplish the exact opposite, giving our steel industry
incentive to remain bloated and inefficient, while penalizing everyone through higher prices.
As Lew Rockwell has pointed out, look for the WTO to give the green light for retaliation. [4] May it stop short of a full-scale trade war.
References
1. The Free Trade Debate: 221 Years Running, Robert F. Graboyes,
2. The Roots of the WTO, E. Kwan Choi,
3. Choi, Roots of WTO
4. The Steel Ripoff, Llewellyn H. Rockwell, Jr,