The Daily Caller

The Daily Caller

That funny old dogma — Ian Fletcher’s ode to mercantilism

Photo of Max Borders
Max Borders
Editor, The Freeman

College kids have an excuse for being indignant about free trade. They’re largely ignorant–young idealists who’re still learning about the real world. They don’t realize, for example, that most “sweatshop” jobs in Central America pay more than prevailing wages in those countries. And, while these jobs are tough, they are less horrible than subsistence agriculture. In other words, third-worlders actually want sweatshop jobs. The alternatives may be prostitution, starvation or crime.

But I don’t think folks like Ian Fletcher have as good an excuse for their opposition to free trade. I realize mercantilism, that funny old dogma, can be tempting for people–particularly if you’re a UAW lobbyist, or your radio’s stuck on The Lou Dobbs Show. But Fletcher’s recent article in the Daily Caller isn’t so much a defense of mercantilism as a guerrilla assault on free trade launched from the thorny bushes of fallacy. Let me explain.

Fletcher’s “critique” employs three strategies that, when analyzed, can easily be exposed as Logic 101 no-nos. Consider:

Straw Man — Come up with five or six caricatures of free traders and their arguments, then beat up on those caricatures. But don’t use actual citations, because you won’t find any. Here’s one example of Fletcher’s supposed free trade argument: “Anyone who doesn’t believe this is stupid. Smart people not only understand that free markets are best, they like free markets, because free markets mean opportunities to get rich.” (Italics Fletcher’s.)

Wow. Okay, the first thing you should do when arguing against a position is to find people who actually making the claim you’re attacking. I don’t know anyone who makes such puerile assertions, much less gets get paid to. And while free markets do mean opportunities for people to benefit, free-traders really like the fact that borderless exchange offers opportunities for the world’s poorest people to survive and thrive.

Ad Hominem — If you can’t dissect the argument, attack the man: “Their fundamentalist sect is the old Ayn Rand cult, whose members call themselves ‘objectivists.’” The implication is that those who understand free trade are somehow dogmatic or cultists. We don’t reflect on our advocacy of open exchange, we follow it blindly. Like the tactics used by the Soros left, Fletcher’s shtick is not so much to argue at all, but to use innuendo and call names. Even the title, “Fakeonomics,” is meant to suggest free-trade advocates are either lying or being disingenuous. Attacking people reveals contempt, not substance.

Sans Evidence — Economics is an empirical science in most respects. So why doesn’t Ian Fletcher point to any evidence to support his claims? I suspect one of two reasons: either he is a lazy researcher who can’t be bothered with evidence, or he is being intellectually dishonest. Neither reflects well on him or his organization. (A third hypothesis is that he is simply using the platform to hock his book on protectionism, which he mentions both in the body and in the tagline. His book is published by a special interest group.)

Anyway, so much for rational discourse on free trade in “Economics vs. Fakeonomics.” I’ll try to do a little better in my response to Fletcher.

Despite all the fallacies and lack of supporting evidence, let’s be charitable to Mr. Fletcher’s position. With the following, I’ll directly address what Fletcher considers to be the “problems” of free trade.

  • Anonymous

    Sigh! 

    Your evidence on foreign economies that practice managed trade turns out to be a generalized description of economic freedom index vs. prosperity not free trade vs. prosperity. So that’s irrelevant. Your Target store example does not take into consideration currency manipulation that would occur between nations, so that is irrelevant to Ian’s discussion. But, if you want to take your Target example, keep going there, take out a Target charge until you can’t paid you bill, then tell me it is sustainable in the long run. You’re wrong again. This is getting boring. No one said Detroit and America doesn’t have a whole host of other problems. The question before us is “free trade” helping or hurting those problems. Try to stay focused here. Free trade encourages industries to move to dirty jurisdictions. You argue that those places can’t get cleaned up unless they have our money from free trade. I don’t elect American politicians to fix foreign problems. Do you?Your next quote took Ian out of context, so I’ll let it go due to lack of space.Comparing capital mobility intra country to inter country is very different. Also, the constitution forbids interstate tariffs. When it comes to inter country capital mobility free trade can absolutely destroy a currency. Ever heard of QE1, QE2, QEnth. We are destroying our currency because free trade destroyed our economy and now we can’t pay for $0.41 of every dollar of government. Of course, this is not the only reason, but it is a big part of it.Lastly, let me point out, that according to you if we raised our tariffs to 30%, the Chinese would not retaliate because they are smart enough to know that those crazy Americans are simply “shooting themselves in the foot.” Right?With all due respect, you didn’t knock down any of Ian’s arguments. You simply demonstrated that you did not understand what you read. It’s a tough read, it’s not for everyone.Sigh! 

  • J Baustian

    Ian Fletcher needs to find another line of work… perhaps assembly-line work in light industry, something that doesn’t require too much brainpower. I would not recommend him for additional training, as this seems unlikely to produce any positive results.

  • Liberty Issues

    Well done! But you need to add a free market in currency exchange rates. Then and supposed advantage from lower wages disappears. The initial demand for the exporters currency causes its value to rise.

    Then, as were saw with Japan in the early 80s, Japanese autoworkers were paid more than even the overpaid American autoworkers, when measured in dollars. But within Japan they were still earning coolie wages. That’s the beneficial consequence of free exchange rates. Any initial wage disparities disappear as soon as the low-wage countries become successful (net) exporters

    Free trade does require free markets (especially in currency exchange).

    Back to Japan, that’s when their government began manipulating their exchange rates, which many analysts blame for their economic collapse and 12-years of recession.

    Meanwhile, most Japanese-brand cars old in America are now made in America — providing stiff competition to our own Ford/GM/Chrysler. This competition benefits … consumers. And it evolved from Free Trade.

    .

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