1999 Ron Paul 77:1 Mr. PAUL.
Mr. Chairman, once again Congress
demonstrates that it has no fundamental
understanding of free trade or the best interests
of the taxpayer. The Africa Growth & Opportunity
Act is heavy-laden with the Development
Assistance (foreign aid), debt forgiveness
(so much for the balanced budget), OPIC
expansion (thus putting the taxpayers further
at risk), and of course a new international regulatory
board to be funded with “such sums as
may be necessary.” Additionally, the costs of
this bill are paid by raising taxes on charity.
Free trade, Washington style, is evidently not
free for the taxpayer!
1999 Ron Paul 77:2 So what exactly is “free trade” and how far
removed from this principle have those in
Washington and the world drafted? Free trade,
in its purest form, means voluntary exchange
between individuals absent intervention by the
coercive acts of government. When those individuals
are citizens of different political jurisdictions,
international trade is he term typically
applied in textbook economics. For centuries,
economists and philosophers have debated
the extent to which governments should get in
the way of such transactions in the name of
protecting the national interest (or more likely
some domestic industry). Obviously, both parties
to exchange (free of intervention) expect
to be better off or they would not freely engage
in the transaction. It is the parties excluded
(i.e. government and those out-competed)
from the exchange who might have
benefitted by being a party to it who can be
relied upon to engage in some coercive activity
to prevent the transaction in the hopes that
their trading position will become more favorable
by “default.”
1999 Ron Paul 77:3 Because governments have for so long engaged
in one variety of firm-or-industry-benefitting
protectionism or another, my “trade free
of intervention” definition of free trade is currently
quite out of favor with beltway-dominant
pundits. Such wrongheaded thinking is not limited
to government. In academia, a widely-used
undergraduate economics text, authorized
by David C. Colander, describes a “free
trade association” as a “group of countries
that allows free trade among its members and
puts up common barriers against all other
countries’ goods” — thus here we have free
trade associations putting up barriers. (An
economic textbook only Orwell could love.)
1999 Ron Paul 77:4 An example of what now constitutes “free
trade” Washington style can be found within
the US ENGAGE Congressional Scorecard. It
is insightful to consider what USA ENGAGE
regards as pro-free trade against the backdrop
of the non-interventionist notion of free trade
outlined above.
1999 Ron Paul 77:5 China Most Favored Nation (MFN), while
politically charged, is perhaps the cleanest
genuine free trade vote chosen by USA ENGAGE.
The question posed by this legislation
is whether tariffs (taxes on U.S. citizens purchasing
goods imported from China) should
be lower or higher. In other words, when
American and Chinese citizens engage in voluntary
exchanges, should Americans be
taxed. Clearly the free trade position here is
not to raise taxes on Americans and interfere
with trade.
1999 Ron Paul 77:6 The Vietnam Waiver vote classification as a
pro-free trade position is particularly indicative,
however, of what now constitutes free trade in
the alleged minds of the beltway elite. When
government forces through taxation, citizens to
forego consumption of their own choosing (in
other words forego voluntary exchanges) so
that government can send money to foreign
entities (i.e. trade promotion), this in the mind
of Washington insiders constitutes “free
trade.” In other words, when demand curves
facing the corporate elite are less than those
desired, government’s help is then enlisted to
shift the demand curve by forcing taxpayers to
send money to various government and private
entities whose spending patterns more
favorably reflect those desired by those “engineering”
such “free trade” policies in Washington.
Much like tax cuts being a “cost to
government” and “free trade associations”
whose purpose it is to erect barriers, free
trade has become government-coerced,taxpayer-financed foreign aid designed to result
in specific private spending and private gains.
1999 Ron Paul 77:7 The Fast Track initiative highlighted in USA
ENGAGE’s Congressional scorecard has its
own particular set of Constitutional problems,
but the free-trade arguments are most relevant
and illustrative here. The fast-track procedure
bill sets general international economic policy
objectives, re-authorizes “Trade Adjustment
Assistance” welfare for workers who lose their
jobs and for businesses which fail (a gentler,
kinder “welfarist” form of protectionism), and
creates a new permanent position of Chief Agriculture
Negotiator within the office of the
United States Trade Representative. Lastly,
like today’s legislative mishap, the bill “pays”
the government’s “cost” of free trade by increasing
taxes on a set of taxpayers further
removed from those corporatists who hope to
gain by engineering favorable international
trade agreements.
1999 Ron Paul 77:8 Constitutional questions aside, like today’s
H.R. 434, the fast track bill contained provisions
which would likely continue our country
down the ugly path of internationally-engineered,
“managed trade” rather than that of
free trade. As explained by the late economist
Murray N. Rothbard, Ph.D.:
1999 Ron Paul 77:9
[Genuine free trade doesn’t require a treaty
(or its deformed cousin, a ‘trade agreement’;
NAFTA is called an agreement so it
can avoid the constitutional requirement of
approval by two-thirds of the Senate). If the
establishment truly wants free trade, all it
has to do is to repeal our numerous tariff,
import quotas, anti-dumping laws, and other
American-imposed restrictions of free trade.
No foreign policy or foreign maneuvering in
necessary.
1999 Ron Paul 77:10
In truth, the bipartisan establishment’s fan-fare
of “free trade” fosters the opposite of
genuine freedom of exchange. Whereas genuine
free traders examine free markets from
the perspective of the consumer (each individual),
the mercantilist examines trade from
the perspective of the power elite; in other
words, from the perspective of the big business
in concert with big government. Genuine
free traders consider exports a means of paying
for imports, in the same way that goods in
general are produced in order to be sold to
consumers. The mercantilists want to privilege
the government business elite at the expense
of all consumers — be they domestic or foreign.
1999 Ron Paul 77:11 Fast track is merely a procedure under
which the United States can more quickly integrate
an cartelize government in order to entrench
the interventionist mixed economy. In
Europe, this process culminated in the
Maastricht Treaty, the attempt to impose a single
currency and central bank and force relatively
free economies to ratchet up their regulatory
and welfare states. In the United States,
it has instead taken the form of transferring
legislative and judicial authority from states
and localities and to the executive branch of
the federal government. Thus, agreements negotiated
under fast track authority (like
NAFTA) are, in essence, the same alluring
means by which the socialistic Eurocrats have
tried to get Europeans to surrender to the
super-statism of the European Union. And just
as Brussels has forced low-tax European
countries to raise their taxes to the European
average or to expand their respective welfare
states in the name of “fairness,” a “level playing
field,” and “upward harmonization,” so too
will the international trade governors and commissions
be empowered to “upwardly harmonize,”
internationalize, and otherwise usurp
laws of American state governments.
1999 Ron Paul 77:12 The harmonization language in the last Congress’
Food and Drug Administration reform
bill constitutes a perfect example. Harmonization
language in this bill has the Health and
Human Services Secretary negotiating multilateral
and bilateral international agreements
to unify regulations in this country with those
of others. The bill removes from the state governments
the right to exercise their police
powers under the tenth amendment to the
constitution and, at the same time, creates a
corporatist power elite board of directors to review
medical devices and drugs for approval.
This board, of course, is to be made up of
“objective” industry experts appointed by national
governments. Instead of the “national”
variety, known as the Interstate Commerce
Act of 1887 (enacted for the “good reason” of
protecting railroad consumers from exploitative
railroad freight rates, only to be staffed by railroad
attorneys who then used their positions
to line the pockets of their respective railroads),
we now have the same sham imposed
upon worldwide consumers on an international
scale soon to be staffed by heads of multinational
pharmaceutical corporations.
1999 Ron Paul 77:13 The late economist Ludwig von Mises argued
there is a choice of only two economic
systems — capitalism or socialism. Intervention,
he would say, always begets more interventionism
to address the negative consequences
of the prior intervention: thus, necessarily
leading to yet further intervention until complete
socialism is the only possible outcome.
This principle remains true even in the case of
intervention and free trade.
1999 Ron Paul 77:14 To the extent America is non-competitive, it
is not because of a lack of innovation, ingenuity,
or work ethic. Rather, it is largely a function
of the overburdening of business and industry
with excessive taxation and regulation.
Large corporations, of course, greatly favor
such regulation because it disadvantages their
smaller competitors who either are not in a position
to maintain the regulatory compliance
department due to their limited size or, equally
important, unable to “capture” the federal regulatory
agencies whose regulation will be written
to favor the politically adept and disfavor
the truly productive. The rub comes when
other governments engage in more laissez
faire approaches thus allowing firms operating
within those jurisdictions to become more
competitive. It will be the products of these
less-taxed,less-regulated firms which will be
the consumers’ only hope to maintain their
standard of living in a climate of domestic production
burdened by regulation and taxation.
The consumers’ after-tax income becomes
lower and lower while relative prices of domestic
goods become higher and higher. Free
trade which provides the poor consumer an
escape hatch, of course, is not the particular
brand of “free trade” espoused by the international
trade organizations whose purpose it
is to exclude the more efficient competitors
internationally in the same way federal regulatory
agencies have been created and captured
to do the equivalent task domestically.
1999 Ron Paul 77:15 Until policy makers can learn enough about
trade and voluntary exchange to distinguish
them from taxpayer-funded aid to bolster corporate
revenues, OPIC, Export-Import funding,
Market Access Program, and other forms of
market intervention (each of which are quite
the opposite of genuine free trade), the free
trade discussion will remain at worst, a delusional
discussion, and, at best, a hollow one.
1999 Ron Paul 77:16 For these reasons and others, I oppose the
so-calledfree-trade-enhancing Africa Growth
and Opportunity Act.
Note:
1999 Ron Paul 77:2
how far removed from this principle have those in Washington and the world drafted?
probably should be how far removed from this principle have those in Washington and the world drifted?
1999 Ron Paul 77:2
international trade is he term typically applied probably should be
international trade is the term typically applied.
1999 Ron Paul 77:3
beltway-dominant pundits probably should be capitalized: Beltway-dominant pundits because Beltway is the name of a highway.
1999 Ron Paul 77:3
widely-used probably should be unhyphenated: widely used.
1999 Ron Paul 77:6
beltway elite probably should be capitalized: Beltway elite.
1999 Ron Paul 77:8
internationally-engineered probably should be unhyphenated: internationally engineered.
1999 Ron Paul 77:10
fan-fare PR fanfare? Here the text is unclear because the word is hyphenated at the end of a line of text in the Congressional Record.
