Atlantic Unbound

NPR Commentary -- February 28, 1996
by James Fallows

Buchanan Might Disappear -- But His Concerns Won't

Republican leaders differ on whether to call Pat Buchanan an "extremist," but they are united in dismissing his plan for import tariffs as disastrous and beneath debate.

This reluctance to deal with Buchanan's arguments is a big error. Buchanan's trade proposals are more serious than many of the rebuttals they've gotten, and they reflect concerns that won't disappear even if this candidate goes away.

The basic question in international economics concerns the costs and benefits of tariffs and free trade. Any tariff is bad for a nation's consumers, since it makes them pay more for the VCRs or bananas they buy from overseas. Nonetheless, for centuries nations have imposed tariffs, all nations do so today. Sometimes these are sweetheart deals for politically-powerful businesses. Sometimes they're designed to shelter an infant industry so it can grow -- as the U.S. sheltered most of its industries throughout its history until World War II. And sometimes tariffs are designed to protect jobs, regional economies, or whole ways of life that could not stand the test of market efficiency -- for instance, the European policies that raise the cost of food but allow the picturesque farms of France to survive.

In deciding where and how to set tariffs, a nation is very much like a community deciding whether to welcome a new discount store that will lower prices but eventually destroy downtown businesses. In the long run, the move toward lower prices and freer trade is unstoppable, but in the short run communities -- and nations -- often try, with regulations and tariffs, to buffer the pace of change.

The mistake of Buchanan's opponents is to act as if any question about the impact of trade is so outrageous that it cannot even be raised. Their proof usually begins and ends with the Smoot-Hawley tariff of 1930. This notorious bill is usually said to have caused the Great Depression; therefore, new tariffs would bring hard times again. In reality, Smoot-Hawley was not enacted until months after the Depression had started. And while the tariff probably made the Depression worse, the knee-jerk reliance on Smoot-Hawley to end all arguments about trade is as foolish as using the police beating of Rodney King as proof that cities should never again hire policemen.

The real danger in sneering off concerns about trade is that this has created a vacuum for Pat Buchanan to fill. Economists can show that freer trade will make most people richer in the long run. But in the here and now, some people lose their jobs, lose ground, and are afraid. When Democrats of the 1960s refused to admit the problems with Great Society programs, they opened the door to an ugly critique from George Wallace. When today's politicians refuse to admit that a global economy is destructive as well as beneficial, they have opened the door for Pat.



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Copyright & copy; 1996, by James Fallows. All Rights Reserved.