In 1992, Pat Buchanan ran for the Republican presidential nomination. His platform included strong opposition to free trade. Buchanan ran a strong second to George H.W. Bush, the incumbent president of the United States.
Buchanan followed up his presidential run by opposing the North American Free Trade Agreement, stating, "Even if NAFTA brings an uptick in GNP it is no good for America. We don’t want to force American workers to compete with dollar-an-hour Mexican labor. That’s not what America is all about." Free trade, Buchanan said, would sink the American economy: "Americans today are being indoctrinated in false history. And high among the falsehoods is that ‘free trade’ with foreign nations made America prosperous, and protectionism always made her poor. This is the catechism of the One Worlders, but it is politically correct history — not truth."
In 1996, Buchanan won the New Hampshire presidential primary but lost the Republican nomination to Bob Dole. By 2000, Buchanan was out of the Republican Party altogether, running on the Reform Party ticket.
Once again, however, Buchanan’s ideological allies are wreaking havoc. Economic isolationism, shunned throughout the Clinton and Bush years, has gained renewed support in the Republican Party. A recent Wall Street Journal poll found overwhelming Republican support for tariffs against foreign imports; six in 10 respondents said that free trade had been bad for the United States.
This reversion to economic paleoconservatism comes at a devastating time for the Republican Party. The GOP has always contained a splinter group that sees economics as a zero sum game — if the other party is benefiting, America must be losing.
Zero sum thinking may carry a grain of truth when it comes to foreign policy — if our enemies achieve military or strategic supremacy, America inherently suffers — but it does not bear scrutiny with regard to economic partnership with friendly nations.
Every trade partnership must have two willing partners. If Americans buy Japanese cars, both parties benefit. If America places tariffs on Japanese DVD players, both parties lose out: American consumers lose, since they are paying handsomely for lower-quality DVD players, and Japanese sellers lose, since they are unable to market their products.
There is a case to be made for tariffs — but only with regard to countries whose continued growth threatens American security interests. Unfettered trade with China, for example, bolsters their anti-American national security policy. Trade with Mexico or Japan, however, benefits Americans as consumers. And those consumption savings are redirected toward businesses where American products are superior. If I save $500 by purchasing a Japanese DVD player, then that is $500 I may spend on an American car.
The American DVD company may go out of business … but if I am forced to keep the American DVD company in business, the American automobile company may shut down.
The simple truth of economics is that not every business — not even every American business — deserves to survive. Bolstering economically unviable American businesses misallocates resources and deprives deserving American companies of the resources they need to stay ahead.
But Buchanan and his ilk see economics in stark terms: buying American good, buying foreign bad. They ignore the fact that Americans do not have unlimited supplies of cash — that if Americans are forced to buy poorly made, expensive American products, well-made American products may suffer the consequences.
If the Republican Party embraces Buchanan-esque paleoconservative economics, it will precipitate prolonged recession. The Democratic Party will tout Keynesian economics as a response, necessitating higher taxes and massive government growth. The paleoconservative nightmare — bigger government — is the likely outcome of a paleoconservative economic program.
Republican candidates must shun the easy political points to be won by catering to the economically uninformed. To do anything else would be to pave the way for Democratic accession, followed by the revivification of the socialistic liberal economic program.