Capitalism and tariffs

 The conversation between free trade and fair trade suffers from a lack of clarity. When discussing these areas one must distinguish between the theoretical underpinnings of various economic theories ranging from command economies to open markets. And, we must understand the practical implications of decisions made within these systems that are strategic in nature and are designed to support the intentions and further the interests of leaders in these systems.

For example, we must understand that economics and politics are “war by other means,” Carl vonKlauswits stated as much. The fact is we live in a competitive world regardless of what you call your organizing philosophy. Capitalism requires open competition on a level playing field by moral men. Socialism clouds these issues and through ambiguous doublespeak and induces the individual blindness by many to equate Global markets with free trade. These are not the same.

There is a large misunderstanding about how capitalism relates to import and export tariffs. Free-market capitalism, from our nation’s founding has resulted in the most dynamic and productive economy and world history. By far the United States leads economic development across the globe. However, the theories and principles of capitalism don’t uniformly apply to nations across the world.

There are two forms of anti-capitalist actions. One, proactive actions of communists and socialists across the globe in opposition to free markets comment. Two, subversive actions and the ramifications of the maneuvers of corporations and individuals within a free-market economy that thwarts capitalism. Both are serious, and both are no different than ethically egregious actions taken in any other area of life. We all face enemies foreign and domestic, enemies from without and within.

In fact, most of the world’s population lives under modified socialism rather than free-market capitalism. This means that state actors including government and agencies, partner with and regulate the activities of corporations in these countries. And that’s a mild form of communistic “autocratic capitalism” which is simply an iteration of communism that allows oligarchs to build businesses that are publicly traded under strict relationships to the state.

These companies are co-ownership joint ventures between governments and corporations. Jack Ma Yun with Alibaba in China, Airbus in France and the Russian energy companies all follow the same model. They benefit from protection regimes that prohibit competition in their own country and structure tree deals with foreign countries that subsidize the production of it’s an services by these companies. They are financed and funded by the state. If this sounds familiar, the United States has essentially co-opted the financial sector buy funding banks through massive inflation due to Digital increases in US currency. Not to mention the GM bailout which Took over a public company with Government dollars.

 What we need to understand is that capitalism doesn’t raise the standards of behavior between competitors on a level playing field. Capitalism overtime drives up productivity and efficiency and innovation for those who practice capitalism well within their own borders. Then, it’s up to the nation which includes the Departments State, Commerce and Defense and many other agencies to negotiate a stance that is favorable to the whole nation vis-à-vis foreign governments, entities, corporations and extra-state players which seek to benefit from arbitrage in sectors in industries where the competition of capitalism has weekends some to the benefit of others.

 This is the essential issue in capitalism, it both promotes monopolies for businesses that maximize benefits to consumers and increases competition opportunities for smaller start-up firms. Economists ironically refer to monopolistic competition as two or three major companies within an industry that dominate the majority of market-share. However often single or pure monopolies rise up especially within local markets where a dominant player controls vast swathes of an entire industry. The same occurs on a national even global scale. Consider Google’s dominance of search, 80% of all search engine inquiries take place on Google. Or even Facebook’s dominance of social media, over 3 billion people are currently Facebook users. 

But these large companies use a form of crony capitalism to subvert existing laws and insulate themselves from the competition demands of smaller companies. This takes place through patent procurement, mergers and acquisition to buy up smaller companies, lobbying for laws and regulations that benefit their position, manipulating financial institutions, and many other public and private actions. All of this is anti-capitalism and encourages anti-capitalism by other companies in foreign nations.

The same types of actions are standard practice for international businesses that are virtually arms of their state governments. Government leaders profit from boards of directorates and interlocking trusts that acquire wealth through corporate ownership.  These firms become vicariously controlled by this international cabal. Where capitalism competes against socialism it is in the strategic interest above the nation promoting free markets to dissuade individuals in other countries from utilizing the power of government to prohibit competition from companies in a capitalist economy.  And it is to the detriment of the nation and companies and individuals in that nation when unjust laws are used against their own people based on advantages provided to socialist companies.

 Thus, to promote capitalism, we must allow for tariffs. We must recognize that our nation and companies and individuals within our country are competing against nations Sedona by the same laws rules and standards that we have. Because these nations and individuals overtly and covertly attack our system of economic organization and by extension a very national security, it is and it is in our interest and our national responsibility to protect and defend individuals and companies within our national boundaries.

Yes, this means that we should focus on America first. And in doing so the shining light in the city on the hill can be a beacon for other nations to raise the standards of their own economic actions and begin to compete fairly. A negotiation requires good faith from both parties. With trust, we engender one another to move forward in a positive direction. That’s the hope for the Trump administration and bilateral trade deals which use tariffs as legitimate sanctions on poor behavior, to trust but verify.