Web Letters: The New Bipartisan Capitalism

Back when I was in college in the late sixties and early seventies, any favorable mention of "free trade" would have been viewed as pure idiocy. It still is idiocy. The purpose of "free trade" is to drive down wages, and reduce the standard of living for workers.

America did not become an industrialized nation through "free trade" but under the protection of tariffs and the development of a self-sufficient internal market based on Alexander Hamilton's "Report on Manufactures" plan submitted to Congress in 1791. The "America System" and the works of Friedrich List are elaborations of Hamilton's plan. One of the more readable version is in a speech before Congress by William McKinley on "the Wood Tariff Bill on April 15, 1878," located in the book Speeches and Addresses of William McKinley, available on the web through Google Books. In those days Republicans were protectionists.

I recall taking a course in the history of Brazil, and in one book for the course it was noted that Brazil experienced a brief burst of development when it was cut off from trade with Europe. I remember remarking in a exam that this was accidental proof of Hamilton's contention that trade barriers are essential to a nations's development. There is no need to reinvent the wheel. American history is the guide and proof.

Pervis J. Casey

Riverside, CA

Galbraith's claim that "all reputable reference to our class structure emphasizes the middle, not the upper and lower, forcing these extremes into the background" is true in more than one sense. Not only do we generally ignore the extremes of wealth and poverty at the margins of the sprawling empire of the Middle Class, but when we do cast a glance beyond this empire's borders, we look through middle-class lenses. In other words, we imagine that the correlation between productivity and income, which seems strong in what we should probably call the lower middle class, operates among the poor and the rich as well. From this it follows that the poor, whose income proves that they lack merit, must be worthless, and that the rich, whose income proves that they are golden geese, must be godlike in their virtue.

The view that so-called free trade is not only a good thing for world prosperity, but the only good thing, is another kind of "middle-class" view, since it includes only tradable goods in its scope, without considering where these goods come from and where they end up. As a result, natural resources are wasted, people are exploited and hazardous waste is exported. Diverting a portion of the fruits of trade to revitalize and maintain its roots, which are labor and the environment, is a necessary complement to any trade policy. Sadly, the authors of NAFTA and its descendants continue to fail to broaden their vision.

A third kind of middle-class myopia is age-related. We see young, productive workers, now including women as well as men, but we do not see neglected children or that the ranks of the elderly are growing. The only popular proposal for remedying the graying of society--one widely discussed in Europe--is to encourage people of the presumably "productive" sort to have more children. This reveals the most dangerous blindness of all, the failure to see that economic growth of every kind cannot go on forever on planet Earth. Eventually, our global population must stabilize, and when it does, it will be grayer than any previous population and will require correspondingly more expenditure for old-age aliments.

Even Marx, cornucopian as his assumptions often were, was unable to see global limits to growth. However, he was able to see economic injustice and was not satisfied with the cornucopian dismissal of all economic problems as temporary. Those of us who can see limits to growth should be more, not less, concerned about economic injustice, for we can see that the proposal "Let them eat growth" is not only cynical, but ultimately unworkable.

Eric Paul Jacobsen

Saint Paul, MN