Informed Speculation

(Part I – Immigration Reform can be found here)

The old adage about politics making strange bedfellows is certainly true. There has long been a subset of conservatives who are isolationist in foreign and economic affairs. Their appeal has always been limited, however, and will stay that way in the future, if the Republican Party stays true to one of the bedrock principles of conservatism: free trade.

Adam Smith’s ‘invisible hand’ remains the single best metaphor for economic activity yet devised, even as alternatives such as socialism and Marxism lose their cachet (the academy excepted, of course). The global economy is at its most productive (and prosperous) when capital and people are free to be employed wherever they achieve the greatest benefit, without respect to industry or national boundary. Free trade is such a winning political issue that its relative retreat in recent years can only be laid at the feet of poor salesmanship.

Simply put, the Republicans must continue to be the salesmen for global prosperity. At every turn, we should stress that economics is not a zero-sum game, that a rising tide lifts all boats, and that America prospers as the world prospers. Many policy conundrums are solved quite easily with an appeal to the principles of free trade.

Outsourcing of jobs? A net gain for Americans, as consumer goods are cheaper and we employ our capital and workforce more productively.

Immigration? A net plus (if done legally) as new wealth is created by goods and services produced at a lower price than otherwise would prevail and new consumers (and taxpayers) are introduced.

School choice? Absolutely a net plus, as students and teachers have an incentive to seek the most productive educational outlets available.

Dubai Ports World? Please – xenophobia should be easily combatted by principle.

Protectionism (tariffs, ‘dumping’ laws, etc?)? To be avoided at all costs, as it interferes with market efficiencies.

These and other issues have only to be met with clear logic and stubborn adhesion to principle. Americans are inherently disposed to favor free trade, when it is presented properly. Republicans should always remember that the economy is an area where we hold a rather large competitive advantage over the Democrat Party. As much as modern Democrats are loath to admit it, their policy has its roots in socialism, just as the Republican Party’s positions are descended from capitalism.

For the 2006 and 2008 elections, then, the following positions should be pursued.

The first principle we should stress is that capital does not flow efficiently when so much of our money is diverted to the government’s coffers. Fiscal responsiblity can be restored through:

(1) Entitlement Reform. Society desires a social safety net, but we need to bring principles of free trade into this area as much as possible. That means, yes, a continued push for at least partial privitization of Social Security, but it also means the immediate institution of means testing. There is no need for programs designed to cushion the blow of poverty to benefit the wealthy, or even the comfortably middle class, particularly in a time of looming financial crisis under the status quo. This is not a hard sell if the presentation is proper.

(2) The Presidential Line Item Veto. The preferred method should be a Constitutional Amendment with a two-thirds override, as explained here. Pork is inexcusable and all too prevalent, and this would be a powerful tool to battle the practice of earmarks.

(3) A Fair Tax Code. A flat tax is probably a bridge too far, but we’ve got to start laying the groundwork, and one way is through true tax simplification. For far too long, the tax code has been used as a tool for social engineering and corporate handouts. There have been attempts to simplify, but they have been halting and inconsistent. One possible solution: a commission similar to BRAC (the commission that recommends military base closures) that would present modifications to the tax code that must be approved or voted down en masse.

Our free trade policy must, of course, face outward as well, and that means:

(4) Comprehensive, World-Wide Agricultural Reform.We have to quit giving handouts to failing family farms and wealthy agribusiness alike, and we have to push the European Union, and particularly France, to do the same. Nostalgia for the way things used to be is no way to run a trade policy.

(5) The Global Free-Trade Alliance. In Getting America Right: The True Conservative Values Our Nation Needs Today, authors Edwin Feulner of the Heritage Foundation and Doug Wilson of Townhall.com argue for a voluntary free trade organization open to any nation that meets the following four conditions:

1. The nation has minimum tariffs or nontariff barriers to trade;
2. The nation is open to capital flows and foreign investment;
3. The national protects private property and business under the rule of law through an independent judicial system; and
4. The nation does not impose undue regulatory burdens on businesses and entrepreneurs.

Granted, there’s a lot of subjectivism there, and the details would need hardening, but the authors indentify 12 nations that would currently fit the bill, but 19 more that fail only one of the four tests. If admitted, the nation would enjoy free trade with any other member nation.

Many of these items could not be enacted overnight, but we can begin the transition by campaigning for these principles vigorously and openly. When people ask what our plan is for economic prosperity, we can begin with a clear statement that our policy is grounded in the principle of free trade, and then provide specifics along the lines outlined above.