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Henry George on how trade sanctions hurt domestic consumers (1886)

The American free trader Henry George (1839-1897) argued that trade sanctions against “our enemies” hurt domestic domestic consumers just like any other “protectionist” trade restriction:

Free trade consists simply in letting people buy and sell as they want to buy and sell. It is protection that requires force, for it consists in preventing people from doing what they want to do. Protective tariffs are as much applications of force as are blockading squadrons, and their object is the same—to prevent trade. The difference between the two is that blockading squadrons are a means whereby nations seek to prevent their enemies from trading; protective tariffs are a means whereby nations attempt to prevent their own people from trading. What protection teaches us, is to do to ourselves in time of peace what enemies seek to do to us in time of war.

Trade is not invasion. It does not involve aggression on one side and resistance on the other, but mutual consent and gratification. There cannot be a trade unless the parties to it agree, any more than there can be a quarrel unless the parties to it differ. England, we say, forced trade with the outside world upon China, and the United States upon Japan. But, in both cases, what was done was not to force the people to trade, but to force their governments to let them. If the people had not wanted to trade, the opening of the ports would have been useless.

Civilized nations, however, do not use their armies and fleets to open one another’s ports to trade. What they use their armies and fleets for, is, when they quarrel, to close one another’s ports. And their effort then is to prevent the carrying in of things even more than the bringing out of things—importing rather than exporting. For a people can be more quickly injured by [51] preventing them from getting things than by preventing them from sending things away. Trade does not require force. Free trade consists simply in letting people buy and sell as they want to buy and sell. It is protection that requires force, for it consists in preventing people from doing what they want to do. Protective tariffs are as much applications of force as are blockading squadrons, and their object is the same—to prevent trade. The difference between the two is that blockading squadrons are a means whereby nations seek to prevent their enemies from trading; protective tariffs are a means whereby nations attempt to prevent their own people from trading. What protection teaches us, is to do to ourselves in time of peace what enemies seek to do to us in time of war.

Can there be any greater misuse of language than to apply to commerce terms suggesting strife, and to talk of one nation invading, deluging, overwhelming or inundating another with goods? Goods! what are they but good things—things we are all glad to get? Is it not preposterous to talk of one nation forcing its good things upon another nation? Who individually would wish to be preserved from such invasion? Who would object to being inundated with all the dress goods his wife and daughters could want; deluged with a horse and buggy; overwhelmed with clothing, with groceries, with good cigars, fine pictures, or anything else that has value? And who would take it kindly if any one should assume to protect him by driving off those who wanted to bring him such things?

About this Quotation:

Henry George wrote one of the best critiques of protectionist trade policies in 1886 at a time when President Grover Cleveland was pushing for tariff reductions from a very high average rate in the US of 47% at a time when free trade Britain had tariff rates of less than 1% and France of 1.5%. Central to his argument was that protectionism was a form of coercion or force which prevented two parties divided by a line drawn on a map from benefitting from mutually beneficial exchanges. Those who did benefit from tariffs and other forms of protection were the powerful lobby groups who controlled the political parties (in this case the Republican Party) and were successful in lobbying congress for favourable legislation. George also pointed out the bellicose nature of protection, noting that it was a domestic form of economic warfare which was usually reserved for times of war to blockade one’s enemy’s ports in order to harm them economically. The domestic protectionists were in effect “blockading” their own citizens from the benefits of external trade. One could turn the argument on its head by arguing that trade “sanctions” (a euphemism for a blockade) designed to hurt an enemy also harmed one’s own domestic consumers who wished to trade with foreigners. Since both parties to a trade benefit from the transaction, by preventing trade from taking place across borders there is an equal or greater harm imposed upon one’s own domestic consumers for every harm inflicted upon the enemy. A final observation is that George objects to the use of martial language in describing trade, such as an “invasion"of foreign goods, or language used to describe natural disasters, such as "floods”, to an activity which is in essence peaceful, voluntary, and productive. Bastiat also shared George’s concern about the misuse of language in “Metaphors”, Economic Sophisms Series II, no. 22.

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