Tag: free trade

Bryan Caplan and the Open Borders movement

I find it remarkable that the image below is what the U.S. Chamber of Commerce thinks passes for a pro-immigration image.
In the meantime, the quasi-libertarian economist Bryan Caplan is demonstrating that he can’t follow the basic logic of domestic free trade or understand the consequences of the free movement of international labor as the Open Borders movement searches for a logo.  Steve Sailer has compiled a number of them that are nearly as bad as the Chamber of Commerce’s entry.

“The Open Borders movement seeks a symbol that embodies the spirit of
free migration. To achieve that goal, we are sponsoring a logo contest.
The winner of this contest will get $200 and their design will become
the official logo of the Open Borders web site.”

Lacking any graphic talent, I shall refrain from attempting to create one myself, although I would certainly encourage the Dread Ilk to do so if anyone is so inclined.  Instead, I would invite Mr. Caplan to attempt to rebut my argument that an Open Borders regime will force the international emigration of more than 40 percent of Americans before they turn 35.  I should also like to see him address the fact that this forced economic migration is desired by influential statists specifically in order to “undermine the “homogeneity of its member states”.

It is very important to understand that Open Borders movement seeks nothing less than the destruction of the nation-state in the name of the global economy.  This extreme Free Trade doctrine necessarily requires the end of the Jewish state of Israel, the end of the U.S. Constitution, and the demolition of the chief structural obstacle to global dictatorship. Open Borders and the Free Trade argument can be best understood as the European Common Market scheme writ large; it is the economic bait for global political integration.

The current immigration reform bill is the completion of the American national suicide that began with the Immigration and Nationality Act of 1965 and was proposed by the grandson of Jewish immigrants, sponsored by the grandson of Irish immigrants, and publicly championed by another grandson of Irish immigrants.  Thus demonstrating that even when they are superficially integrated, second- and third-generation immigrants tend to act against the interests of the nations their parents and grandparents invaded.

WND column

The utopian evil of free trade

In my previous column on the flaws of free trade theory, I concentrated
primarily on the theoretical aspects and the errors in the historical
arguments that have been made for it. In this column, I will focus on
the practical side and show how free trade, if implemented in a genuine
manner, will necessarily result in the complete destruction of the
United States of America as we know it.

Free trade and war

Yet another pillar in the free trade theory appears to be on the verge of falling:

China declares economic war on Japan

China is trying to hurt Japan economically, to gain leverage in its campaign to take control of the Senkaku/Diaoyu islands. In the 2010 confrontations, China took revenge on Japan by terminating shipments of rare earth minerals, needed for manufacturing of many of Japan’s electronic products. In the current confrontation, the Beijing government is encouraging the Chinese people to demonstrate and protest against Japanese businesses in China. The government urged protesters not to use violence, but that part of the message is clearly not getting through. Protesters torched a Panasonic factory and Toyota dealership, looted and ransacked Japanese department stores and supermarkets in several cities. China’s National Tourism Administration ordered travel companies last week to cancel tours to Japan over the weeklong National Day holiday in early October. AP and Bloomberg

Chinese Communist Party urges punitive sanctions against Japan

The Chinese Communist Party (CCP) is urging strong punitive sanctions against Japan, for its “well-orchestrated plan” to take control of the Senkaku/Diaoyu islands, according to the CCP’s official newspaper:

“The “nationalization” of the Diaoyu Islands by Japan after “purchasing” them from a “private owner” is ridiculous and cannot change the fact that they are Chinese territory. … China should take strong countermeasures, especially economic sanctions, to respond to Japan’s provocations. Military consideration, however, should be the last choice.

The United States has frequently used Article XXI Security Exceptions of the WTO (taken from the earlier General Agreement on Tariffs and Trade) to impose economic sanctions on other countries. The security exception clause says a country cannot be stopped from taking any action it considers necessary to protect its security interests. That means a country can impose sanctions on enterprises, financial institutions, organizations and even other countries’ central and local governments. Taking a cue from the US’ practice, China can use the security exception clause to reduce the export of some important materials to Japan.

China didn’t announce any sanctions against the Philippines in April, but it froze banana imports from that country in response to Manila’s aggressive attitude in the Huangyan Island dispute. Though the economic countermeasure forced the Philippines on the back foot, it also harmed the interests of some Chinese enterprises.

So it is important for China to devise a sanction plan against Japan that would cause minimum loss to Chinese enterprises.

The US’ capability to impose economic sanctions on other countries is based on its economic strength, huge share in global trade, financial institutions and global intelligence network. China, too, has the capability to impose sanctions on other countries now that it is the second largest economy, has the largest foreign reserves, and is the largest exporter and second largest importer.

An analysis of Sino-Japanese economic interdependence shows that Japan’s economy will suffer severely if China were to impose sanctions on it. China’s loss would be relatively less. … So it’s clear that China can deal a heavy blow to the Japanese economy without hurting itself too much by resorting to sanctions.

Apart from its reliance on China, Japan has been suffering from other economic ills. First, Japan’s massive government debt is increasing substantially. … Third, Japan’s fiscal deterioration is likely to continue. There are enough indications that Japan’s economic growth in 2013 will slow down or slip into another recession. The irreversible trend of long-term economic downturn, combined with Japan’s aging population, will eat into the country’s household savings, and the declining purchasing power of the Japanese will increase Japan’s fiscal debt. …

But instead of blindly boycotting Japanese goods, China should work out a comprehensive plan which should include imposition of sanctions and taking precautionary measures against any Japanese retaliation. China should also have several rounds of policies ready to undermine the Japanese economy at the least cost of Chinese enterprises.

Furthermore, in case Chinese enterprises suffer because of the sanctions, the Chinese government should be prepared to compensate them. And once China imposes sanctions on Japan, the government should ensure that all enterprises in the country, domestic and foreign, obey the rules.”

China and Japan have only been trading since diplomatic ties were normalized in 1972; China became Japan’s largest trading partner in 2004. A war between two of the world’s largest economies would permanently shatter the oft-heard argument that trade eliminates the possibility of war. It’s an argument that should always have been dubious, however, as England’s many wars against the various principalities in India and the USA’s Middle East wars have all followed the inception of large-scale trade with the region.

Once more, we see that free trade delivers precisely the opposite of what it promises. And, as Generational Dynamics adroitly points out, trade actually expands the range of warfare as well as providing an economic weapon that can be wielded against the trading partner. Even when trade is not a cause of the war, it provides a means of fighting it.

Lest anyone think I am setting up a strawman here, consider this article by a free trade advocate at the Mises Institute: “The Classical Liberals of the nineteenth century were certain that the end of the old Mercantilist system–with its government control of trade and commerce, its bounties (subsidies) and prohibitions on exports and imports–would open wide vistas for improving the material conditions of man through the internationalization of the system of division of labor. They also believed that the elimination of barriers to trade and the free intercourse among men would help to significantly reduce if not end the causes of war among nations.”

Free trade and the undermining of nations

I understand that many, if not most, of you were skeptical when I pointed out that if free trade were to be implemented on the same scale on the international level that it is on the domestic level, it would necessitate the destruction of the USA as a sovereign nation and the expatriation of nearly 50 percent of its native workers under the age of 35. However, you may be a little less dubious once you understand that I am not the only one who has done the math.

The EU should “do its best to undermine” the “homogeneity” of its member states, the UN’s special representative for migration has said. Peter Sutherland told peers the future prosperity of many EU states depended on them becoming multicultural….

Mr Sutherland, who is non-executive chairman of Goldman Sachs International and a former chairman of oil giant BP, heads the Global Forum on Migration and Development, which brings together representatives of 160 nations to share policy ideas. He told the House of Lords committee migration was a “crucial dynamic for economic growth” in some EU nations “however difficult it may be to explain this to the citizens of those states”.

As hard as it may be to accept, free trade, mass immigration, multiculturalism, globalism, climate change, and centralized government are all different facets of the same globalist vision of Ein Welt, Ein Volk, Ein Reich. This isn’t some outlandish figment of my imagination, it’s all right there in front of you. The problem is that few have the ability to comprehend the scope of it all, and even fewer have the capacity for putting the various pieces together to see the whole.

Mailvox: a subscription, canceled

A former Gary North subscriber writes to share his experience:

I joined garynorth.com a few months ago in hopes of learning why I should believe in free trade. Dr. North and I immediately locked horns as he would not answer my questions. Every time I cited another scholar’s position he dismissed them as a statist or a mercantilist.

He said I wanted to stick a gun in someone’s belly. I was stunned at his behavior. So I cancelled my subscription.

Only recently did I discover your ongoing debate with him over free trade. What a pleasure to see an intellect of your capacity dismantle Gary North for the intellectual fraud that he is.

Not only are the economics better here, but it’s really hard to beat the price. As for North, one shudders to consider the psychosexual foundation for what appears to be his favorite metaphor. And for those who still find the free trade position entirely convincing, I hope you will note that unlike its defender, I am quite willing to answer questions concerning the subject.

Gary North digs himself deeper

It’s amusing to see North continue flailing about, still avoiding the salient points while casting aspersions and lies on every side in a desperate attempt to distract the reader from the fact that his case is hopeless. And yet, a close reading shows that he knows his case is hopeless, as he is trying to respond to arguments that he dare not engage openly by name. Consider this interesting new assertion and the way it contradicts what he had previously written as well as what he later writes in the very same piece:

In my recent essays on tariffs, in which I have used the metaphors of badges and guns and invisible lines known as borders, I have been attempting to get people to think carefully about the underlying economic principles of free enterprise. I am asking people to think through the presuppositions and implications of their views regarding the way the economy really works and the way the economy ought to work.

Ah, so those invisible lines that are used to delineate the nonexistent nation are merely metaphorical now! He didn’t actually mean to say that nations don’t exist, after all, that would be entirely absurd and would prove my point that he is an intrinsically anti-American globalist.

But he’s lying again, and the only reason he’s trying to claim it is a metaphor is because it blows apart his entire argument… which is why he’s promptly forced to return to the “metaphor” only a few paragraphs later.

They say that they do not believe that the state is the same as the nation. The problem is, most of them still operate in terms of the collective entity known as the nation. They still cling to the idea of the nation-state as the final source of guidance for the economy….

What do you mean, “the nation”? What is this nation?

How does special-interest legislation favoring a handful of domestic manufacturers defend the vaguely defined entity called the nation?

There is a true bait-and-switch operation going on here. Defenders of tariffs present themselves as defenders of the nation, when in fact the nation, from the point of view of economics, is not a collective entity. The nation, from an economic standpoint, is simply a convenient name that we give to people inside invisible judicial lines known as national borders.

But wait a minute? Didn’t Mr. North just say that those invisible lines were metaphors? More importantly, it is clear that the only bait-and-switch taking place here is on North’s part, as he is desperate to conflate the nationalist argument with a statist one. He has the hammer of his anti-statist argument and therefore the problem must be a nail. But it is simply false to claim that the nation is the state, and indeed, only a myopic and untraveled American like North is liable to make such a mistake. Nations are more than judicial constructs or units of Samuelsonian economic calculation, they are genetic and linguistic and they are not only distinct from political states, they predate them.

North tells more porkies when he provides a list of propositions he erroneously claims to be false, which are particularly embarrassing given his claims to be a historian. Consider this one: “Badges plus guns plus sales taxes increase the wealth of nations.”

This isn’t a false proposition. History is perfectly clear on how Rome’s wealth, Great Britain’s wealth, and America’s wealth were all produced by badges, guns, and yes, taxes. Indeed, the observable decline of the USA traces back to the point when it had to begin competing in a world in which it was no longer the only state without a shattered industrial infrastructure. As I have pointed out before, Bastiat’s Broken Window Fallacy is not a fallacy so long as one breaks the windows in another town and shoots the glazier there. It is clear that North simply doesn’t understand the important difference between the collective wealth of nations and the wealth of an individual nation, much less the nature of the dynamic relationship between the two concepts. Nor does he understand that the free trade he advocates requires the end of the very nations that he simultaneously claims are a) nonexistent and b) the beneficiaries of the wealth produced by free trade.

Instead of addressing the substantive arguments that I and others have offered, such as my economic calculation that it will require the emigration of nearly fifty percent of the U.S. workforce under the age of 40 to generate the same benefits from international free trade that are derived from domestic free trade, North prefers to attack straw men and centuries-old mercantilist arguments. But note that even in the quote from Mises that begins his latest debacle, the roots of my argument can be detected: “International division of labor becomes suspect because it hinders the full use of national sovereignty.”

Translation: Free trade is incompatible with national sovereignty. And international labor mobility is incompatible with the very existence of nations.

Perhaps he’s senile, or perhaps he’s simply an intellectually overmatched coward, but either way, Gary North’s continued attempts to tar all economic nationalists with the statist brush are not only false, they are dishonest. Consider his conclusion, which demonstrates the extent to which he fails to grasp the salient issues:

I do not expect to change the mind of any protectionist. But I would like those people who are the targets of protectionists’ taxation program to recognize that the person making the argument for sales taxes on imports is a mercantilist and a welfare statist. The protectionist will not admit this to himself, and he surely will not admit it to anyone considering his arguments. He will staunchly deny that he is a mercantilist or a welfare statist, but his arguments are those of mercantilism and welfare state economics, so his denials should not be taken seriously.

Of course he would like the modern protectionists to do that… because then he’d have an argument against them! But the arguments being made are most certainly not “those of mercantilism and welfare state economics” as many of them have clearly never been made before! And in light of how feeble and dishonest his performance has been, it is more than a little amusing to see an unconfessed globalist utopian such as North trying to claim that anyone else’s denials should not be taken seriously.

Most of all, I want them to stop claiming that they are believers in Austrian school economics and are staunch defenders of libertarianism.

If belief in international free trade is a prerequisite to believing in Austrian School economics, I have no problem declaring myself a post-Austrian. Mises isn’t Holy Writ after all, and I suspect the Austrian School will be eventually seen as little more than a stepping stone that served as a useful contribution towards a more relevant and reliable post-Austrian economics. As for libertarianism, I will merely point out that liberty cannot exist in the absence of nations. The alternative to nations isn’t liberty, but global totalitarianism and the absolute rule of evil.

Gary North still hates Americans

Gary North is apparently foolish enough to continue shopping around that inept and deceptive article wherein he blatantly lies about the opponents of free trade and the arguments and critiques they present. Previously on Lew Rockwell, the same article is now featured by the Mises Institute:

I have found over the years that when I debate with people who promote tariffs, meaning sales taxes on imported goods that are enforced by people with badges and guns, they always adopt arguments that apply only to America’s side of the border. They refuse to adopt those very same arguments for people on the other side of the border.

I challenge defenders of tariffs to state their arguments in terms of both of the people who want to trade, not just the American. The ethics and economics of restricted trade surely apply to the person who wants to trade on the other side of the invisible line known as a national border. If the arguments for restricted trade apply to the American economy, then surely they apply to the other nation’s economy. Logic and ethics do not change just because we cross an invisible judicial line. I take this position because I want the pro-tariff person to face the implications of his position.

Of course, Mr. North doesn’t hold himself accountable to the same standard as he flees from the obvious and inescapable conclusions that are logically dictated by his dogmatic free trade positions. Despite his challenge, I can almost guarantee he won’t address this argument for restricted trade, which transcends economics and applies to Americans, Frenchmen, and Chinese alike. Consider:

1. Free trade, in its true, complete, and intellectually coherent form, is not limited to the free movement of goods, but includes the free movement of capital and labor as well. (Note, for example, that the “invisible judicial line” doesn’t magically become visible when because human bodies are involved.)

2. The difference between domestic economies and the global international economy is not trivial, but is substantive, material, and based on significant genetic, cultural, traditional, and legal differences between various self-identified peoples.

3. Free trade is totally incompatible with national sovereignty, democracy, and self-determination, as well as the existence of independent nation-states with the right and ability to set their own laws according to the preferences of their residents.

4. Therefore, free trade must be opposed by every sovereign, democratic, or self-determined people, be they American, Chinese, German, or Zambian, who wish to preserve themselves as a free and distinct nation possessed of its own culture, traditions, and laws.

I invite Gary North or any other advocate of free trade to dispute or attempt to correct that argument. Now let’s consider the facts. Free trade advocates often claim that there is no reason for any difference between the U.S. domestic economy and the international economy. They believe there should be no more barriers between sovereign nation-states than there are between the several and united American States. And yet, look at the difference between labor mobility in the USA versus the European Union.

In the former EU15, only about 0.1% of the working age population changes its country of residence in a given year. Conversely, in the US, about 3% of the working age population moves to a different state every year,

These institutional and cultural differences suggest comparing internal geographical mobility in the US with the situation within EU Member States rather than between Member States. In doing so, the figures narrow the ‘mobility gap’ between Europe and the US. Between 2000 and 2005, about 1% of the working age population had changed residence each year from one region to another within the EU15 countries, compared to an overall interstate mobility rate of 2.8%-3.4% in the US during the same period of time.”
– Peter Ester and Hubert Krieger, “Comparing labour mobility in Europe and the US: facts and pitfalls”, 2008

What this means is that US workers are about 3x more willing to change their state of residence than European workers are willing to change their region of residence within national borders, and 30x more inclined to change their state of residence than Europeans are inclined to change their country of residence, even though the US state-to-state change likely involves a bigger geographic move than the EU country-to-country one.

It should be noted that increasing this country-to-country labor mobility rate within the EU is not only a major goal of the EU economic advisers, but the explicitly stated reason for this goal is their belief that increased labor mobility is required in order to increase economic growth.

Now, let’s look at what that annual 3 percent intra-US mobility translates to in terms of the overall population. The statistics are as follows for Americans between the ages of 25 and 44:

US overall 50.5 percent
East 54.3 percent
Midwest 65.0 percent
South 47.3 percent
West 40.2 percent

This is why the Midwest has changed much less over the last 40 years than either the East Coast or the West Coast; more Midwesterners stay in the Midwest and maintain their laws and cultural traditions. But more importantly, note what this signifies for the USA if the apostles of free trade were ever able to achieve their goal of permitting international trade to take place on the same terms as American domestic trade in a manner that realized the anticipated economic benefits: very nearly half of all American workers would be expected to leave the USA by the average age of 35!

This vast exodus of young Americans would say nothing, of course, of the hundreds of millions of non-American workers who would be expected to enter the USA, with all of the various consequences to be expected as a result of immigration that is an order of magnitude larger than the current wave.

The logic of free trade is inescapable. It amounts to a choice between a steadily declining living standard if free trade is limited to goods and capital versus the total destruction of the nation and the replacement of a majority of its population within a single lifetime if it is pursued to the full beneficial extent of the concept.

To paraphrase North, if you still refuse to give up the idea of free trade as a desirable means to increase the wealth of nations, then you should at least admit to yourself and others that you favor the total destruction of national sovereignty, the elimination of the U.S. Constitution, and the end of America and other historical nations. It’s time to come clean. You favor the politics of ein Welt, ein Recht, ein Volk.

In much the same way that those who support high tax levels cannot understand the counter-intuitive fact that the higher tax rates do not always lead to higher tax revenues, free trade advocates fail to understand that reducing national trade barriers will not always lead to increased wealth or liberty. If one believes that America was ever any sort of paragon of wealth and freedom, then it is obviously insane to advocate any policy that will cause America to return to the global average with regards to either, even if that policy would tend to raise the global average to some degree.

Mailvox: a correction on Hazlitt

I finally banned the highly unpleasant Unger a few days ago, after first forcing him to back up his claim about my supposed errors on the subject of free trade, then examining those claims and determining them to be almost entirely false. I don’t mind being criticized in the slightest, but the mistakes have to be genuine and the corrections not only correct, but substantive, otherwise the criticism is actually worse than worthless because it reduces the amount of attention that can be paid to more significant matters.

I value substantive criticism, which is why I am willing to tolerate highly critical jerks so long as their criticism is dialectical and correct, or at least reasonably founded. On the other hand, I’m not the least bit interested in rhetorical critics or permitting dogmatic ideologues to litter the comments with their emotional incontinence here on a regular basis.

That being said, Unger did point out one legitimate mistake when I wrote “Here Hazlitt ironically forgets that as a champion of free trade, he cannot assume an increased tariff of $5 on sweaters means five cents less spent on 100 other American products.” I should have written “an increased price of $5 on sweaters”. Of course, he promptly revealed his customary intellectual dishonesty by making the ludicrous claim that this mistake not only rendered Hazlitt’s original point correct – it did not – but somehow invalidated everything I had written about the flaws in Hazlitt’s chapter on free trade.

In which I demonstrate a gross misreading and consequent misrepresentation of Hazlitt, which you’ve ignored for the better part of a week now, because I’m unarguably right and the point is critical enough to where the whole essay now needs to be scrapped.

The essay was more crap, and proof that Vox is singularly incapable of understanding an argument. I haven’t the time to go point by point, but Vox’s reasoning, or lack thereof, with regard to point 3, is typical of the piece, and since most of the other points depend in one way or another on the validity of that point’s reasoning, it make an excellent target. And since Vox didn’t even bother reading what Hazlitt actually said, it makes a very easy target.

First, Hazlitt said nothing about a $5 tariff on anything at all, least of all sweaters. Hazlitt wrote – emphasis added for the benefit of the semiliterate: “We can perhaps make this last point clearer by an exaggerated example. Suppose we make our tariff wall so high that it becomes absolutely prohibitive, and no imports come in from the outside world at all. Suppose, as a result of this, that the price of sweaters in America goes up only $5.”

Just to make absolutely sure that there’s no excuse for anyone to misunderstand what Hazlitt wrote – not that there was any excuse before, and not that it will stop some of you publik-skuled clowns from continuing to misunderstand: Hazlitt presents an hypothetical example of America isolating itself from the world. It once traded; henceforth it will not import anything. The country is not imposing a $5 tariff on sweaters or any other doodads. The actual tariff amount is left unspecified. It could be ten gazillion dollars per item for all anyone cares. The point is that it is prohibitive and completely effective. And the $5 figure Hazlitt gives is something else entirely – namely, the effect of this prohibition is to raise the price of sweaters $5.

Now you should see, immediately, that historical data like ‘imports presently represent 17.3 percent of GDP’ are irrelevant. If you do not, you’re a walking argument for eugenics, and I address myself solely to your intellectual betters. Under Hazlitt’s hypothetical example, imports represent precisely 0% of GDP, along with 0% of every other possible economic metric, and, while I don’t want to spoil anyone’s fun with any complicated math shit, I have to say that this likely has something to do with them not existing.

Shit. I said I was going to limit myself to (point) 3, but I can’t help but poke some fun at (point) 6, too. Yes, tariffs and the lack thereof are totally irrelevant to the question of employment. Barring legal restrictions, former steel workers can flip burgers, do laundry, or even sell their affectionate manly embraces for coin, and whether they will do any of those things or hold out for other employment has nothing whatsoever to do with trade theory. Any evidence purporting to show a link between trade policy and long-term unemployment is nonsensical, for the same reason any evidence purporting to show a link between trade policy and Martian ice cap expansion is nonsensical: the causes are elsewhere.

First, let me admit to my misreading. Unger was correct to point out that Hazlitt does not, as I had said, postulate the imposition of a $5 tariff on imported sweaters, but rather a complete ban on imports that has the effect of raising the prices of domestic sweaters by $5. So far, so good. Mea culpa.

However, Unger is completely wrong to claim that this mistake invalidated, or even altered in the slightest, my correction of Hazlitt and that this additional $5 now spent on sweaters means that 100 other domestic producers are not robbed of 5 cents each, but rather 4.14 cents apiece. His claim about the irrelevance of previous imports is not only incorrect, but underlines how his ability to reason is demonstrably lower than that of those he asserted were “a walking argument for eugenics”.

Unger himself admits that the tariff wall did not previously exist, but is a change from the previous situation. He writes of the nation-state: “It once traded; henceforth it will not import anything.” This means that of the additional $5 now being spent on the sweaters due to the unspecified tariff wall, 17.3 percent of it was previously being spent abroad, just as stated in the case of the erroneous $5 sweater tariff. The 100 other domestic producers cannot be losing the entire $5 amount to the sweater manufacturers because they were only receiving a maximum of the $4.14 cents that was being spent domestically anyway.

So, despite the misreading, my correction of Hazlitt stands. Moreoever, it should be readily apparent that because the erroneous substitution of a specific $5 tariff for an unspecified tariff wall with a $5 effect didn’t alter the correctness of my critique on that point, it is not critical enough to require the scrapping of the other 22 identifications of Hazlitt’s errors. This is little more than wishful thinking and blatant dishonesty on Unger’s part.

While I genuinely value honest criticism, this sort of exaggerated rhetoric is simply ridiculous, adds nothing to the debate, and in fact detracts significantly from it by wasting time on nonexistent and insubstantial matters rather than genuine ones. It would have been perfectly reasonable to simply point out the misreading without attempting to use the mistake as a foundation upon which to build a fictitious case in defense of Hazlitt. Some mistakes are critical, others are not, and the honest critic will always be careful to distinguish between the two. Note that I did not claim that Hazlitt’s 86-cent error in any way invalidated his entire case for free trade, it merely happened to be a minor mistake which tends to illustrate the careless and outdated nature of his reasoning.

UPDATE: Just to underline Unger’s unusual combination of ineptitude and dishonesty, he popped up here to complain about how I initially omitted the part now seen above in italics.

“How nice of you to ‘selectively quote’ (read: lie about) what I wrote. You left out a paragraph, which explained what Hazlitt said and why he was right. I said a few days ago that you weren’t a fraud, but it looks like I was wrong.”

Of course, I omitted it because it was irrelevant, neither helping his case nor hindering mine. In fact, I probably should have left it in, since “most of the other points depend in one way or another on the validity of that point’s reasoning” is obviously a false assertion. This sort of thing is precisely why I ban incompetent but energetic critics like Unger; it doesn’t matter how many times you show them to be wrong, they will just keep swinging wildly and ineffectively at you. Leaving out irrelevant elements of an argument is selectively quoting, but it is most certainly not lying about anything. Selective quoting can be dishonest but it is not, in itself, an indication of dishonesty by the person quoting.

Avert your eyes

In which I publicly engage in the practice of the Ricardian Vice:

Unit Labor Costs

Britain 100 cloth 110 wine
Portugal 90 cloth 80 wine

In the absence of transportation costs, it is efficient for Britain to produce cloth, and Portugal to produce wine, as, assuming that these trade at equal price (1 unit of cloth for 1 unit of wine) Britain can then obtain wine at a cost of 100 labor units by producing cloth and trading, rather than 110 units by producing the wine itself, and Portugal can obtain cloth at a cost of 80 units by trade rather than 90 by production.

Now let’s do this Ricardo-style and assume the perfect mobility of labor, maintaining, as Ricardo does, the perfect immobility of capital. We will likewise assume that Britain and Portugal have equally-sized labor forces. We will also follow Ricardo in leaving time and transport costs out of the equation. So, what are the consequences?

Obviously the wine and cloth laborers will move to Britain, since they will receive an 11 percent raise and a 38 percent raise respectively. However, once they get there, the doubling of the labor supply in Britain this causes will cause the price of labor to be cut in two. Britain can now produce the same amount of cloth for the cost of what was previously 50 units of labor and the same amount of wine for 55, thereby obtaining both wine and cloth for a much lower unit labor cost than what it used to cost to produce the wine alone. Portugal doesn’t get anything out of it, but that doesn’t matter because they’ve got no ability to retain their laborers without resorting to badges and guns.

Therefore, open immigration is not only desirable, but is vastly preferable to comparative advantage by a factor of 105/200 and autarky by a factor of 105/210. QED. What else can we conclude?

1. Ricardo implicitly postulated the immobility of labor.
2. The mobility of labor not only fails to disprove comparative advantage, but actually strengthens the case for even freer trade… at least if you’re in the higher labor cost country and you only look at the labor costs.
3. The mobility of labor will eliminate international trade since everyone will be living in Britain.
4. The mobility of labor operates to the detriment of labor.
5. Ricardo’s logic is remarkably stupid.

Mailvox: the best defense

In which the self-appointed champion of free trade doctrine, Unger, demonstrates that he literally does not know what he is defending:

Free trade does not require the free movement of labor, dumbass. If I buy a hamburger, I don’t have to move in with the cook, or vice versa. Maybe it works differently on Planet Stupid, where the Superintelligent natives can’t so much as buy a stick of gum without inviting comparisons to U-haul-driving lesbians; here on Earth, it thankfully ain’t so.

Free trade most certainly does require the free movement of labor. This is self-evident because it does so by its very definition. An immigration limitation is, quite obviously, a restraint on trade every bit as restrictive as a tariff or a control on capital. Unger here demonstrates that he knows absolutely nothing about the doctrine he is so dogmatically and so ineptly defending. I don’t mind being called childish names by such an interlocutor, indeed, I would be more concerned if anyone so intellectually hapless claimed to follow my reasoning, let alone agree with it.

Contra his illogical and incorrect insistence that free trade does not require open immigration, I cite Ludwig von Mises in Liberalism: “Under a system of completely free trade, capital and labor would be employed wherever conditions are most favorable for production…. Capital and labor tend to move from areas where conditions are less favorable for production to those in which they are more favorable. But the migration of capital and labor presupposes not only complete freedom of trade, but also the complete absence of obstacles to their movement from one country to another.”

Once more, we see that the defenders of free trade aren’t merely anti-American, they are either ignorant of their own doctrine or astonishingly intellectually dishonest. And it is beyond irony to see a free trader present an appeal to how things work on Earth in the real world.