Free Market Fundamentals and NatCon Inconsistencies
Nothing signals a greater likelihood of intellectual confusion than does intellectual inconsistency. I’m not referring to changing one’s mind. Intellectual growth invariably brings about changes in mind. The person who once believed that minimum wages can in practice be implemented in ways that harm no workers might well come later to discover that her earlier belief is naïve. This person is not intellectually inconsistent; this person is intellectually open and honest. Ditto for the person who once believed that free trade is the best policy but who encounters arguments and data that push him to the opposite conclusion. One’s mind can change — correctly or incorrectly — without subjecting one to a legitimate charge of inconsistency.
By intellectual inconsistency I instead mean clinging to beliefs, offering arguments, or staking out — and sticking with — policy positions that are mutually contradictory. Intellectual consistency is no guarantee of being correct, but intellectual inconsistency is a sure sign of being incorrect.
How many are the conservatives today who support the child tax credit while also proudly proclaiming their rejection of “market fundamentalism” and accusing so-called “neoliberals” of being blind to human motives other than those that are transactional? Whatever are the child tax credit’s merits or demerits as a public policy — that question is one that I here don’t address — that policy is a means of persuading adults to have more children by promising to put more money into adults’ pockets.
Why, for example, should we give credence to Oren Cass’s many proposals for the government to override the market on the grounds that (as he once put it) “markets reduce people to their material interests, and reduce relationships to transactions” given that he also supports the child tax credit? The child tax credit works to increase birth rates only insofar as it appeals to people’s material interests. If it’s appropriate to appeal to people’s material interests on a matter as personal as decisions regarding family size, Cass is surely inconsistent to criticize classical liberals and libertarians for focusing on people’s material interests when these scholars make the case for free trade.
My point here isn’t that Cass is wrong to insinuate that most classical liberals and libertarians worship a fictional homo economicus (although in this matter he certainly is wrong). My point instead is that Cass and many of his National Conservative brethren conveniently but unwittingly appeal to the homo economicus in us when they plead for the child tax credit. (They do also, by the way, in their endorsement of tariffs, which work their restrictive effects largely by appealing to the homo economicus within each consumer.)
These conservatives will respond by pointing out that they don’t deny that many considerations other than purely economic ones are at play when couples decide whether or not to have more children. They see the child tax credit as working only at the margin. This response is both believable and correct. Yet these same conservatives fail to recognize that when the liberals and libertarians who they attempt to slur with the label “market fundamentalists” argue for free trade and free markets, these liberals and libertarians also recognize that many considerations other than purely economic ones are at play when individuals engage in market exchange.
The case for free trade is not purely one of maximizing material consumption. Nearly all free traders also value economic freedom as an end in itself — economic freedom that would be worthwhile to possess even if its possessors were thereby made materially poorer. Is this non-material value — is this treasuring, for its own sake, the freedom to spend one’s income as one wishes — less worthy or less human than are any of the non-material values that motivate today’s national conservatives? I think not.
Free traders also understand that the growth in material output fueled by the freedom to trade enables individuals and families to better pursue more of their non-material goals. Are these non-material goals less important than are the particular non-material goals that protectionists claim can be met only by putting more customs agents at the nation’s ports? I think not.
Oren Cass and other NatCon protectionists will respond by insisting that the particular non-material goals they focus on are inherently at odds with the freedom to trade. Chief among these non-material goals is the dignity that comes from steady employment.
Overlook the implicit (and mistaken) insinuation that free traders are oblivious to the non-material value of steady employment. Focus instead on this NatCon inconsistency: The very protectionism for which the NatCons clamor destroys particular jobs no less than does the free trade that they oppose. Every import kept out of America by protectionist obstacles might well correspond to some particular American job not being destroyed. But every such import kept out of America also corresponds to fewer dollars going abroad — dollars that would, but now cannot, return to America as demand for American exports or as investment in America’s economy. This reduced spending and investing in America by non-Americans destroys particular jobs.
Is the non-economic value of the jobs destroyed by protectionism less than is the non-economic value of the jobs preserved by protectionism? It must be so for the NatCon case to hold together. Yet I’ve never encountered a protectionist of any stripe who explains why the jobs preserved by protectionism have a higher non-material or ethical importance than do the jobs destroyed by protectionism.
The NatCon perhaps believes that he can escape this criticism by insisting that his interest is simply to slow the overall pace of economic change. The particular jobs protected and destroyed are less important than is simply achieving greater economic stability. Greater economic stability — slower economic change and reduced job churn — is, it is perhaps supposed, a worthy non-material outcome that must be promoted with protectionist interventions.
Fair enough. But if this goal of greater economic stability is really what motivates the protectionist, he should turn his attention away from international trade and toward internal economic changes. In a country as large as the United States, most economic change comes from within the country. Labor-saving technologies that are the brain-children of innovative people in Silicon Valley and Austin and Boston, dietary and fashion changes that sweep the country repeatedly, improvements in health that increase — and improvements in wealth that decrease — participation in the labor force. These and other purely internal-to-America economic changes destroy (and create) far more jobs than does international trade. It’s inconsistent for the NatCon protectionist to rail against international trade while being mostly silent about domestic economic changes.
One virtue of the free-trade position is its intellectual and ethical consistency. Endorsing individuals’ freedom to trade with foreigners is simply of a piece with the more general endorsement of individuals’ freedom to trade with whomever they please, whether fellow citizens or not. The protectionist position, in contrast, invariably relies upon arbitrary distinctions that ensnare protectionists in intellectual and ethical inconsistencies.
Donald J. Boudreaux
Donald J. Boudreaux is a Associate Senior Research Fellow with the American Institute for Economic Research and affiliated with the F.A. Hayek Program for Advanced Study in Philosophy, Politics, and Economics at the Mercatus Center at George Mason University; a Mercatus Center Board Member; and a professor of economics and former economics-department chair at George Mason University. He is the author of the books The Essential Hayek, Globalization, Hypocrites and Half-Wits, and his articles appear in such publications as the Wall Street Journal, New York Times, US News & World Report as well as numerous scholarly journals. He writes a blog called Cafe Hayek and a regular column on economics for the Pittsburgh Tribune-Review. Boudreaux earned a PhD in economics from Auburn University and a law degree from the University of Virginia.
