In its current trade dialogue the whole world seems to be missing a 150-year long precedent proving protectionism and global trade can be balanced in an equilibrium where both exist. The world is getting caught in what our undergrad speech com teachers would call a "false dilemma", that it's one or the other, that a developed country can protect its economy or be globally integrated but not both. History shows that is bullshit.

For 150 years tariffs paid for a significant portion of the U.S. federal budget. Those tariff receipts prove that there was an abundance of international trade, despite the tariffs - no trade, no receipts from tariffs. In other words on the average during that time tariffs were low enough not to squelch and stamp out international trade - even though they were still paying a lot of the bills!

During that same time, in less than the first 100 years, the North industrialized powerfully enough to hold the nation together even as the South got all the economic benefits of slave labor, and at the end of the 150 years the U.S. stood as the world's strongest ally against Hitler.

The long and successful history of this balanced policy proves that the entire idea that a country cannot protect its industrial economy without also derailing globalization, is complete bullshit.

Also complete bullshit, is the policy of using tax breaks to bribe companies not to relocate, instead of tariffs on foreign manufactured goods coming in. Tariffs make foreign companies and their domestic customers pay to manufacture overseas (they split the tax in some proportion); tax subsidies force local and state governments to eat the difference in the costs of producing domestically or overseas.

See the table and graph on Wikipedia.

Copyright 2016 Michael Redman
IN GOD WE TRVST.