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OpEdNews Op Eds    H2'ed 8/22/15

Picking Apart One of the Biggest Lies in American Politics: "Free Trade"

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Those strategic proposals built the greatest industrial powerhouse the world had ever seen, and were only abandoned, after more than 200 successful years, during the administrations of Ronald Reagan, George HW Bush, and Bill Clinton (and remain abandoned to this day, as President Obama prepares to further expand "free trade").

China, instead of following our recent path, implemented most of Hamilton's plan, and it brought about a remarkable transformation of that nation in just a single generation.

Hamilton's 11-point plan for "American Manufactures" laid out how to do it (it's at the end of this article).

He looked at the nation and determined what needed to be done to rebuild the country after the Revolutionary War had devastated it, and subservience to England's Tudor Plan "free trade" policies had left us without any significant domestic industrial base.

The High Cost of "Free Trade"

During the 1930s, none of the "Asian powerhouse economies" had adopted Hamilton's industrialization strategies, so when Franklin Roosevelt put money into worker's pockets through the New Deal and they bought toys or clothes or radios, all of those items were made in Alabama or Connecticut or Michigan. Now they're made in China, which experienced a "labor shortage" in 2009 causing its average wage to increase to $1.14 an hour from 80 cents, and its economy to grow by over 8 percent.

China has been following the lead of Japan, Taiwan, and South Korea during the past half century, and has become an industrial powerhouse as a result. And, ironically, each of those countries got their strategy from us: George Washington's Treasury Secretary, Alexander Hamilton, proposed it in 1791, and by 1793 most of the parts of his Report on the Subject of Manufactures had been instituted as a series of legislative and policy steps.

And it didn't start with Hamilton; he was just building on King Henry VII's "Tudor Plan" of 1485, which turned England from a backwater state with raw wool as its chief export into a major developed state which produced fine clothing and other textile products from wool.

King Henry VII accomplished this by severely restricting the export of wool from England with high export tariffs and restricting the import of finished wool products with high import tariffs.

King Henry learned this from the Dutch. They copied the Romans. And the Romans got it from the Greeks, three thousand years ago. It's not new, and it's not rocket science.

Nonetheless, President Obama continues to follow his predecessors -- Reagan, Bush, Clinton, and Bush -- in the religious belief that "free trade" will save us all. It's nonsense. "Free trade" is a guaranteed ticket to the poorhouse for any nation, and the evidence is overwhelming. (Ironically, the concept of "free trade" was introduced by Henry VII in 1487 as something that England should encourage other countries to do while it maintained protectionism. It was invented as a scam.)

A more contemporary example of the application of the wisdom of trade protectionism can be seen in South Korea.

In the 1960s, Korea was an undeveloped nation whose major exports were human hair (for wigs) and fish, and their average annual income was around $400 per working family. Today it's a major industrial power with an average annual per capita income of over $32,000, and it beats the US in its rate of college attendance, exports, and lifespan.

South Korea did all this in a single generation by closing its economy and promoting its export industries. A decade earlier Japan had done the same thing. Forty years earlier Germany had done it.

In July, 2009, with no evident irony or understanding of how South Korea went about becoming a modern economic powerhouse, President Obama lectured the countries of Africa during his visit to Ghana. As the New York Times reported: "Mr. Obama said that when his father came to the United States, his home country of Kenya had an economy as large as that of South Korea per capita. Today, he noted, Kenya remains impoverished and politically unstable, while South Korea has become an economic powerhouse."

In the same day's newspaper, the lead editorial, titled "Tangled Trade Talks," repeated the essence of the mantra of its confused op-ed writer, Thomas L. Friedman, that so-called "free trade" is the solution to a nation's economic ills.

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Thom Hartmann is a Project Censored Award-winning New York Times best-selling author, and host of a nationally syndicated daily progressive talk program on the Air America Radio Network, live noon-3 PM ET. www.thomhartmann.com His most recent books are "The Last Hours of Ancient Sunlight," "Unequal Protection: The Rise of Corporate Dominance and the Theft of Human Rights," "We The People," "What Would Jefferson Do?," "Screwed: The Undeclared War Against the Middle (more...)
 

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