“Liberation Day”, the Nightmare to Stay?! Traders’ traitors
It is said, for example, that America has not even responded with tariffs commensurate with the mockery it has been subjected to by friends and enemies alike; that nations that sell it more goods or services than they buy from it are, in fact, raping it with a sick lust; that the country will fare better by repatriating the industries exiled abroad by the ignorance of previous administrations. Except that America is not populated only by “xenophobic economic agents,” but also by consumer-citizens hurt by suddenly inflated prices by thickly penned signatures, as well as by producer-citizens hit by shrapnel from supply chains blown up by tzealous “equalizer” – the US/world’s economies/societies are far more diverse and complex than that…
The sophisticated ex-mercantilist teaches rudimentary mercantilism. President Trump’s tariffs are not the revolutionary instruments of liberation they claim to be. They belong to an old genealogy of protectionist policies, reminiscent of the Smoot-Hawley Act of 1930 – a historical epic fail that only deepened the Great Depression and suffocated global trade. Promoted as serving to “bring jobs back home,” these tariffs ignore an elementary truth: economic emancipation by hindering honest competition hides the dead end that leads to economic tribalism, in which “we and ours flourish, and you and yours tarnish.” Tariffs are not tools for liberation, but inverted barricades that defend the reactionaries from the revolution of freedom.
The invisible hand gives way to the fist of the customs’ officer to the face. Adam Smith, the “patron saint” of free enterprise, had drawn attention to the follies of mercantilist nationalism – even at the time when the young American nation declared its independence (1776). The “invisible hand” spontaneously orders the wealth of nations acquired through industriousness and trade, softened by Ricardian comparative advantage. Is this an obsolete piece of literature? Perhaps, but Trump has turned back the clock of economic thought even further to the rudiments of mercantilism. In a predictable “punch in the eye” system, markets suddenly become dystrophic, with atrophied tradability and hypertrophied prices, with retaliatory measures that create collateral victims without hitting the guilty, and with escalations that end up in collapses.
If goods no longer cross borders, armies will. God forbid! – this is not about any Mafalda prophecy, but rather an observation from the past of our species. Trade, when free, is the highest form of peaceful coexistence: of course, it requires reciprocity and respect, not threats disguised as negotiation. Trade allows us to work together (individuals, communities, nations) for our own benefit, thus becoming (inter)dependent, in a good sense, on each other, which allows for greater lucrative cooperation and wealth creation. And by eliminating this binder, Montesquieu had warned us, conflict remains the alternative at hand, because what we could multiply together, otherwise, we will seek to divide by force, as reason is with us for better and for worse.
Liberal multilateralism replaced by bully bilateralism. The post-war architects of international trade, from GATT to WTO, imagined a system supported by rules, predictability and mutual responsibility. Designed and devised multilateral, in order to universalize the benefits of each liberalizing breakthrough – even if free trade, as such, was not for a second, a subject of discussion, and “cases”, “exceptions”, “preferences” remained in the landscape. Has Trump’s unilateralism bulldozed this construction with serenity, along with the people inside it, and is multilateralism, once the stage for civilized dispute resolution, reduced to a sad backdrop filled with bilateral imprecations and incantations (US vs. EU, Canada, Mexico, China, or Lesotho)?
“A society without principles means it has none!”... Romanians had Caragiale (for moments of sincerity in which to look at themselves unadorned, mocking for instance the unprocessed yet loudly declaimed truisms), Americans had Twain. Romanians had fewer people who could speak coherently about freedom (economic, political) and even fewer who could practice it. Americans had more. America’s birth certificate, however riddled with inconsistencies, is synonymous with the acceptance, more than on other meridians, of the idea that true freedom thrives in openness, in the audacious embrace of competition, and in the dignity of voluntary exchange. Liberation is a word whose definition we do not have the liberty to utter shame-free.
