Ron Paul
2000 Ron Paul Chapter 29

What Is Free Trade?

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Congressional Record (Page H2393)  Cached

2 May 2000

The SPEAKER pro tempore (Mrs. BIGGERT). Under the Speaker’s announced policy of January 6, 1999, the gentleman from Texas (Mr. PAUL) is recognized for 60 minutes.

2000 Ron Paul 29:1
Mr. PAUL. Madam Speaker, I asked for this Special Order this evening to talk about trade. We are going to be dealing with permanent normal trade relations with China here soon, and there is also a privileged resolution that will be brought to the floor that I have introduced, H.J.Res. 90. The discussion in the media and around the House floor has been rather clear about the permanent normal trade status, but there has not been a whole lot of talk yet about whether or not we should even really be in the World Trade Organization.

2000 Ron Paul 29:2
I took this time mainly because I think there is a lot of misunderstanding about what free trade is. There are not a whole lot of people who get up and say I am opposed to free trade, and many of those who say they are for free trade quite frankly I think they have a distorted definition of what free trade really is.

2000 Ron Paul 29:3
I would like to spend some time this evening talking a little bit about that, because as a strict constitutionalist and one who endorses laissez-faire capitalism, I do believe in free trade; and there are good reasons why countries should trade with each other.

2000 Ron Paul 29:4
The first reason I would like to mention is a moral reason. There is a moral element involved in trade, because when governments come in and regulate how citizens spend their money, they are telling them what they can do or cannot do. In a free society, individuals who earn money should be allowed to spend the money the way they want. So if they find that they prefer to buy a car from Japan rather than Detroit, they basically have the moral right to spend their money as they see fit and those kinds of choices should not be made by government. So there is a definite moral argument for free trade.

2000 Ron Paul 29:5
Patrick Henry many years ago touched on this when he said, “You are not to inquire how your trade may be increased nor how you are to become a great and powerful people but how your liberties may be secured, for liberty ought to be the direct end of your government.” We have not heard much talk of liberty with regards to trade, but we do hear a lot about enhancing one’s ability to make more money overseas with trading with other nations. But the argument, the moral argument, itself should be enough to convince one in a free society that we should never hamper or interfere with free trade.

2000 Ron Paul 29:6
When the colonies did not thrive well prior to the Constitution, two of the main reasons why the Constitutional Convention was held was, one, there was no unified currency, that provided a great deal of difficulty in trading among the States, and also trade barriers are among the States.

2000 Ron Paul 29:7
Even our Constitution was designed to make sure that there were not trade barriers, and this was what the interstate commerce clause was all about. Unfortunately though, in this century the interstate commerce clause has been taken and twisted around and is the excuse for regulating even trade within a State. Not only interstate trade, but even activities within a State has nothing to do with interstate trade. They use the interstate commerce clause as an excuse, which is a wild distortion of the original intent of the Constitution, but free trade among the States having a unified currency and breaking down the barriers certainly was a great benefit for the development and the industrialization of the United States.

2000 Ron Paul 29:8
The second argument for free trade is an economic argument. There is a benefit to free trade. Free trade means that you will not have high tariffs and barriers so you cannot buy products and you cannot exert this freedom of choice by buying outside. If you have a restricted majority and you can evenly buy from within, it means you are protecting industries that may not be doing a very good job, and there is not enough competition.

2000 Ron Paul 29:9
It is conceded that probably it was a blessing in disguise when the automobile companies in this country were having trouble in the 1970s, because the American consumer was not buying the automobiles, the better automobiles were coming in, and it should not have been a surprise to anybody that all of a sudden the American cars got to be much better automobiles and they were able to compete.

2000 Ron Paul 29:10
There is a tremendous economic benefit to the competition by being able to buy overseas. The other economic argument is that in order to keep a product out, you put on a tariff, a protective tariff. A tariff is a tax. We should not confuse that, we should not think tariff is something softer than a tax in doing something good. A tariff is a tax on the consumer. So those American citizens who want to buy products at lower prices are forced to be taxed.

2000 Ron Paul 29:11
If you have poor people in this country trying to make it on their own and they are not on welfare, but they can buy clothes or shoes or an automobile or anything from overseas, they are tremendously penalized by forcing them to pay higher prices by buying domestically.

2000 Ron Paul 29:12
The competition is what really encourages producers to produce better products at lower costs and keep the prices down. If one believes in free trade, they do not enter into free trade for the benefit of somebody else. There is really no need for reciprocity. Free trade is beneficial because it is a moral right. Free trade is beneficial because there is an economic advantage to buying products at a certain price and the competition is beneficial.

2000 Ron Paul 29:13
There really are no costs in the long run. Free trade does not require management. It is implied here on conversation on the House floor so often that free trade is equivalent to say we will turn over the management of trade to the World Trade Organization, which serves special interests. Well, that is not free trade; that is a misunderstanding of free trade.

2000 Ron Paul 29:14
Free trade means you can buy and sell freely without interference. You do not need international management. Certainly, if we are not going to have our own government manage our own affairs, we do not want an international body to manage these international trades.

2000 Ron Paul 29:15
Another thing that free trade does not imply is that this opens up the doors to subsidies. Free trade does not mean subsidies, but inevitably as soon as we start trading with somebody, we accept the notion of managed trade by the World Trade Organization, but immediately we start giving subsidies to our competitors.

2000 Ron Paul 29:16
If our American companies and our American workers have to compete, the last thing they should ever be required to do is pay some of their tax money to the Government, to send subsidies to their competitors; and that is what is happening. They are forced to subsidize their competitors on foreign aid. They support their competitors overseas at the World Bank. They subsidize their competitors in the Export/Import Bank, the Overseas Private Investment Corporation.

2000 Ron Paul 29:17
We literally encourage the exportation of jobs by providing overseas protection in insurance that cannot be bought in the private sector. Here a company in the United States goes overseas for cheap labor, and if, for political or economic reasons, they go bust, who bails them out. It is the American taxpayer, once again, the people who are struggling and have to compete with the free trade.

2000 Ron Paul 29:18
It is so unfair to accept this notion that free trade is synonymous with permitting these subsidies overseas, and, essentially, that is what is happening all the time. Free trade should never mean that through the management of trade that it endorses the notion of retaliation and also to stop dumping.

2000 Ron Paul 29:19
This whole idea that all of a sudden if somebody comes in with a product with a low price that you can immediately get it stopped and retaliate, and this is all done in the name of free trade, it could be something one endorses. They might argue that they endorse this type of managed trade and subsidized trade; but what is wrong, and I want to make this clear, what is wrong is to call it free trade, because that is not free trade.

2000 Ron Paul 29:20
Most individuals that I know who promote free trade around Washington, D.C., do not really either understand what free trade is or they do not really endorse it. And they are very interested in the management aspect, because some of the larger companies have a much bigger clout with the World Trade Organization than would the small farmers, small rancher or small businessman because they do not have the same access to the World Trade Organization.

2000 Ron Paul 29:21
For instance, there has been a big fight in the World Trade Organization with bananas. The Europeans are fighting with the Americans over exportation of bananas. Well, bananas are not grown in Europe and they are not grown in the United States, and yet that is one of the big issues of managed trade, for the benefit of some owners of corporations that are overseas that make big donations to our political parties. That is not coincidental.

2000 Ron Paul 29:22
So powerful international financial individuals go to the World Trade Organization to try to get an edge on their competitor. If their competitor happens to be doing a better job and selling a little bit lower, then they come immediately to the World Trade Organization and say, Oh, you have to stop them. That is dumping. We certainly do not want to give the consumers the benefit of having a lower price.

2000 Ron Paul 29:23
So this to me is important, that we try to be clear on how we define free trade, and we should not do this by accepting the idea that management of trade, as well as subsidizing trade and calling it free trade is just not right. Free trade is the ability of an individual or a corporation to buy goods and spend their money as they see fit, and this provides tremendous economic benefits.

2000 Ron Paul 29:24
The third benefit of free trade, which has been known for many, many centuries, has been the peace effect from trade. It is known that countries that trade with each other and depend on each other for certain products and where the trade has been free and open and communications are free and open and travel is free and open, they are very less likely to fight wars. I happen to personally think this is one of the greatest benefits of free trade, that it leads us to policies that direct us away from military confrontation.

2000 Ron Paul 29:25
Managed trade and subsidized trade do not qualify. I will mention just a little later why I think it does exactly the opposite.

2000 Ron Paul 29:26
There is a little bit more to the trade issue than just the benefits of free trade, true free trade, and the disadvantages of managed trade, because we are dealing now when we have a vote on the normal trade status with China, as well as getting out of the World Trade Organization, we are dealing with the issue of sovereignty. The Constitution is very clear. Article I, section 8, gives the Congress the responsibility of dealing with international trade. It does not delegate it to the President, it does not delegate it to a judge, it does not delegate it to an international management organization like the World Trade Organization.

2000 Ron Paul 29:27
International trade management is to be and trade law is to be dealt with by the U.S. Congress, and yet too often the Congress has been quite willing to renege on that responsibility through fast-track legislation and deliver this authority to our President, as well as delivering through agreements, laws being passed and treaties, delivering this authority to international bodies such as the UN-IMF-World Trade Organizations, where they make decisions that affect us and our national sovereignty.

2000 Ron Paul 29:28
The World Trade Organization has been in existence for 5 years. We voted to join the World Trade Organization in the fall of 1994 in the lame duck session after the Republicans took over the control of the House and Senate, but before the new Members were sworn in. So a lame duck session was brought up and they voted, and by majority vote we joined the World Trade Organization, which, under the Constitution, clearly to anybody who has studied the Constitution, is a treaty. So we have actually even invoked a treaty by majority vote.

2000 Ron Paul 29:29
This is a serious blunder, in my estimation, the way we have dealt with this issue, and we have accepted the idea that we will remain a member based on this particular vote.

2000 Ron Paul 29:30
Fortunately, in 1994 there was a provision put in the bill that said that any member could bring up a privileged resolution that gives us a chance at least to say is this a good idea to be in the World Trade Organization, or is it not? Now, my guess is that we do not have the majority of the U.S. Congress that thinks it is a bad idea. But I am wondering about the majority of the American people, and I am wondering about the number of groups now that are growing wary of the membership in the World Trade Organization, when you look at what happened in Seattle, as well as demonstrations here in D.C. So there is a growing number of people from various aspects of the political spectrum who are now saying, what does this membership mean to us? Is it good or is it bad? A lot of them are coming down on the side of saying it is bad.

2000 Ron Paul 29:31
Now, it is also true that some who object to membership in the World Trade Organization happen to be conservative free enterprisers, and others who object are coming from the politics of the left. But there is agreement on both sides of this issue dealing with this aspect, and it has to do with the sovereignty issue.

2000 Ron Paul 29:32
There may be some labor law and there may be some environmental law that I would object to, but I more strenuously object to the World Trade Organization dictating to us what our labor law ought to be and what our environmental law ought to be. I highly resent the notion that the World Trade Organization can dictate to us tax law.

2000 Ron Paul 29:33
We are currently under review and the World Trade Organization has ruled against the United States because we have given a tax break to our overseas company, and they have ruled against us and said that this tax break is a tax subsidy, language which annoys me to no end. They have given us until October 1 to get rid of that tax break for our corporations, so they are telling us, the U.S. Congress, what we have to do with tax law.

2000 Ron Paul 29:34
You say, oh, that cannot be. We do not have to do what they tell us. Well, technically we do not have to, but we will not be a very good member, and this is what we agreed to in the illegal agreement. Certainly it was not a legitimate treaty that we signed. But in this agreement we have come up and said that we would obey what the WTO says.

2000 Ron Paul 29:35
Our agreement says very clearly that any ruling by the WTO, the Congress is obligated to change the law. This is the interpretation and this is what we signed. This is a serious challenge, and we should not accept so easily this idea that we will just go one step further.

2000 Ron Paul 29:36
This has not just happened 5 years ago, there has been a gradual erosion of the concept of national sovereignty. It occurred certainly after World War II with the introduction of the United Nations, and now, under current conditions, we do not even ask the Congress to declare war, yet we still fight a lot of wars. We send troops all over the world and we are involved in combat all the time, and our presidents tell us they get the authority from a UN resolution. So we have gradually lost the concept of national sovereignty.

2000 Ron Paul 29:37
I want to use a quote from somebody that I consider rather typical of the establishment. We talk about the establishment, but nobody ever knows exactly who they are. But I will name this individual who I think is pretty typical of the establishment, and that is Walter Cronkite. He says, “We need not only an executive to make international law, but we need the military forces to enforce that law and the judicial system to bring the criminals to justice in an international government.”

2000 Ron Paul 29:38
“But,” he goes on to say, and this he makes very clear, and this is what we should be aware of, “the American people are going to begin to realize that perhaps they are going to have to yield some sovereignty to an international body to enforce world law, and I think that is going to come to other people as well.”

2000 Ron Paul 29:39
So it is not like it has been hidden, it is not like it is a secret. It is something that those who disagree with me about liberty and the Constitution, they believe in internationalism and the World Trade Organization and the United Nations, and they certainly have the right to that belief, but it contradicts everything America stands for and it contradicts our Constitution, so, therefore, we should not allow this to go unchallenged.

2000 Ron Paul 29:40
Now, the whole idea that treaties could be passed and undermine the ability of our Congress to pass legislation or undermine our Constitution, this was thought about and talked about by the founders of this country. They were rather clear on the idea that a treaty, although the treaty can become the law of the land, a treaty could never be an acceptable law of the land if it amended or changed the Constitution. That would be ridiculous, and they made that very clear.

2000 Ron Paul 29:41
It could have the effect of the law of the land, as long as it was a legitimate constitutional agreement that we entered into. But Thomas Jefferson said if the treaty power is unlimited, then we do not have a Constitution. Surely the President and the Senate cannot do by treaty what the whole government is interdicted from doing in any way.

2000 Ron Paul 29:42
So that is very important. We cannot just sit back and accept the idea that the World Trade Organization, we have entered into it, it was not a treaty, it was an agreement, but we have entered into it, and the agreement says we have to do what they tell us, even if it contradicts the whole notion that it is the Congress’ and people’s responsibility to pass their own laws with regard to the environment, with regard to labor and with regard to tax law.

2000 Ron Paul 29:43
So I think this is important material. I think this is an important subject, a lot more important than just the vote to trade with China. I think we should trade with China. I think we should trade with Cuba. I think we should trade with everybody possible, unless we are at war with them. I do not think we should have sanctions against Iran, Iraq or Libya, and it does not make much sense to me to be struggling and fighting and giving more foreign aid to a country like China, and at the same time we have sanctions on and refuse to trade and talk with Cuba. That does not make a whole lot of sense. Yet those who believe and promote trade with China are the ones who will be strongly objecting to trade with Cuba and these other countries. So I think a little bit more consistency on this might be better for all of us.

2000 Ron Paul 29:44
Alexander Hamilton also talked about this. He said a treaty cannot be made which alters the Constitution of the country or which infringes any expressed exception to the powers of the Constitution of the United States.

2000 Ron Paul 29:45
So these were the founders talking about this, and yet we have drifted a long way. It does not happen overnight. It has been over a 50-year period. Five years ago we went one step further. First we accepted the idea that international finance would be regulated by the IMF. Then we accepted the idea that the World Bank, which was supposed to help the poor people of the world and redistribute wealth, they have redistributed a lot of wealth, but most of it ended up in the hands of wealthy individuals and wealthy politicians. But the poor people of the world never get helped by these programs. Now, 5 years ago we have accepted the notion that the World Trade Organization will bring about order in trade around the country.

2000 Ron Paul 29:46
Well, since that time we have had a peso crisis in Mexico and we had a crisis with currencies in Southeast Asia. So I would say that the management of finances with the IMF as well as the World Trade Organization has been very unsuccessful, and even if one does not accept my constitutional argument that we should not be doing this, we should at least consider the fact that what we are doing is not very successful.

2000 Ron Paul 29:47
What I think we are seeing, when you get tens of thousands of people out on an issue that seems to be esoteric and start talking and demonstrating against our policy, essentially as they did in Seattle and Washington, I would say maybe the grassroots in America are starting to wake up a lot sooner than the people here in the U.S. Congress. So I think that it is very important that we think this through and think of it in the big context, not only in the very narrow context of voting for trade with China or not.

2000 Ron Paul 29:48
The World Trade Organization does not represent free trade because it is management of trade. It accepts all the complaints from the countries who think that they are being undersold or the competition is getting a little tough for them.

2000 Ron Paul 29:49
Just this week, the President has announced that he will send seven more complaints to the World Trade Organization, seven different countries who are being charged with unfair trade practices. The United States has not fared well with the World Trade Organization. The World Trade Organization has ruled against us on patents dealing with the playing of music, the World Trade Organization has ruled against us with regard to taxes, and also against us on some anti-dumping resolutions.

2000 Ron Paul 29:50
But I am afraid that what is happening is, it is just another international bureaucracy that will be able to provide benefits for some very powerful special interests and ignore the little people who have a harder time to get an ear at the World Trade Organization.

2000 Ron Paul 29:51
The China situation I think is an interesting one because we are spending a lot of effort trading with China. Of course, the tragedy really here is not free trade in trading with China; it has to do with China getting some of our top secrets which to me is more disturbing than trading and buying some things that we might want from China. But China, we have gone to this extent. They have received a tremendous amount. I think they have now received $13 billion from the World Bank. They are the largest recipient of the Export-Import Bank. And, at the same time we send these benefits to China, we still have Members in the Congress who seem to flip flop on the issues who will say well, no, I do not like China; I think China, they are not respectable enough and they will undermine what we are doing, so I do not want to trade with China and they will vote against trade with China, yet at the same time they continue to vote to subsidize China through the Export-Import Bank. That is hard for me to understand why, if one does not want to trade with China, why would one want to continue to send them money. Why would they not vote against the World Bank sending them money. Why would they not vote against the Export-Import Bank sending money over there, because that is subsidizing them. That is where the real harm comes from. Yet, we see that inconsistency all the time.

2000 Ron Paul 29:52
Madam Speaker, I would like to discuss the third point about free trade that I made, and that is that free trade should lead to peace. I sincerely believe this, if we have free trade. But take an example of this: free trade is supposed to lead to lower taxes and lower prices. But here we have the World Trade Organization not telling us to lower taxes to be equal, that would not be quite as harmful, but here we have a World Trade Organization telling us to raise taxes to equal the competition. So it is working perversely. The same way in the military sense. We trade with China, we subsidize China, and yet China appears to be a threat to Taiwan.

2000 Ron Paul 29:53
So what do we do? Do we say let us not send any more subsidies to China? No, what we do is we hurry up and say well, there could be a conflict between Taiwan and China, so we send more weapons to Taiwan. So in subsidizing the Communist system in China, as well as militarizing and sending the military weapons and promising that we will support Taiwan, we are bound and determined to stir up a fight over there with us in the middle. So this, in itself, should tell us that this is not free trade. Free trade means that we are less likely to fight with people and yet, we are stirring up trouble over there and literally, but rather typically, we are subsidizing and helping both sides, which we have done for many, many years.

2000 Ron Paul 29:54
This is why the argument for national sovereignty and the national defense, a strong national defense makes a whole lot of sense, because we do not have to make these determinations. First, we do not have the authority to make the determination of the internal affairs of other nations. We do not have that authority. We probably do not have the wisdom to pick out who the good guys and the bad guys are, but we certainly do not have the finesse to do it by going in there and satisfying all sides. About all we do is we commit ourselves to these conflicts around the world, commit our troops and commit our dollars.

2000 Ron Paul 29:55
Instead of trying to come back from some of these commitments of troops every place in the world, we are looking for more dragons to slay. We in the Congress are going along with the President, getting prepared to send billions of dollars down to Colombia to support a faction down there that has been in a civil war for decades and 30,000 people killed. And of course the grandiose explanation is that we are going down there and we are going to stop drugs from coming in here, which is a dream, because that is not going to happen. But the real reason why I think we venture out into these areas is to serve the financial interests, because it just happens that those individuals who like to sell helicopters and they like to sell airplanes and they like others who would like to protect oil interests are the ones who are more likely to lobby for us to be in areas like this.

2000 Ron Paul 29:56
Madam Speaker, free trade, if it were true free trade, we would be less likely ever to fight with other countries. There was one free trade economist who stated that he had a rule, it was called the McDonald rule. He said he has watched it so far and up until now, the best he knows, there has never been two countries that have had McDonalds in each country ever fought a war. So that is rather simplistic, but I think there is a lot of truth to that, that we should trade and talk with people, give people the freedom and the right to spend their money the way they want. Do not take the money from the people who may have short-term disadvantages from free trade and tax them in order to subsidize the competition. That is where I think we really get off track and we do way too much of it.

2000 Ron Paul 29:57
Madam Speaker, I would like to touch on another subject about trade that is rarely mentioned, and it may well be one of the most important aspects of trade. That has to do with the even flow of trade between countries and their currencies. Balance of payment deficits and current account deficits are very, very important in the long run, especially if they are accompanied by fiat money and not sound money and different currencies being inflated at different rates. This will cause imbalances which causes tremendous shake-outs like we had in Southeast Asia where all of a sudden there are devaluations and some of the protectionist sentiment in order to get an edge on the competitors will be frequently deliberate devaluations where they will prop up currencies in order to get an edge or keep a currency lower in order to get an edge. These things can work for a while, but they usually end up in a crisis, with a currency crisis, higher interest rates, inflations and a downturn in the economy.

2000 Ron Paul 29:58
Now, fortunately, over the last 10 years, most other countries have done a poorer job than we have. The United States has had a built-in advantage in the 1990s since the breakup of the Soviet Union. We have remained the power house economically and militarily which conveys a certain amount of confidence to our currency and has given us license to counterfeit. It has given our Federal Reserve license to create credit out of thin air for all of the reasons they want to do, to stimulate housing or whatever. Also, to encourage some of these trade imbalances. So some of the protectionists will look and they will say, look how much we buy from China, look how much we buy from Japan. That is related to the fact that we have a currency that is artificially and temporarily rated very high and foreigners are willing to take our money, creating this imbalance. But that will all come to an end, because we cannot do this forever. When that happens, stocks go down, interest rates go up, the economy drops, and inflation comes back.

2000 Ron Paul 29:59
The benefits that we have received over these past 10 years have only been temporary. So when we look at the imbalances created by the currency system and the monetary system, we should be prepared to find out that the World Trade Organization will do absolutely nothing to solve that problem. The IMF cannot solve that problem, the World Bank cannot solve that problem, and the World Trade Organization certainly will not solve that problem, because some of the imbalances have already been built into the system.

2000 Ron Paul 29:60
Madam Speaker, we are the greatest debtor Nation in the world today. Our current account deficit is running at record highs. That will be reversed, and the value of the dollar will be reversed. This will cause some serious problems for all of us. It will be the paying back. We have borrowed money endlessly, the foreigners are willing to take our money, sell us cheap products. Our standard of living goes up, they loan us back the money, they buy into our stock market, so we have an illusion of wealth because we have the greatest counterfeiting machine in the world, and that is the Federal Reserve’s ability to create credit out of thin air.

2000 Ron Paul 29:61
It would be nice if it would last forever and these perceptions would persist, but if one looks at monetary history, one finds out that it never persists forever. It persists only for a limited period of time. There was a time in the 1980s they thought in Japan it would persist forever, and then all of a sudden the investment and the adjustments that were required from the over-capacity built into their system came about, and because they have not permitted the liquidation of the debt and the adjustment in prices and wages, their problems have persisted now for more than 10 years.

2000 Ron Paul 29:62
So we will have to face up to that. The important thing there is that it is not a trade problem, it is a currency problem. One day, we in the Congress will have to decide whether or not we want a sound currency again, or whether we want to continue manipulating a paper currency, a paper currency backed up by nothing. Nothing but promises, promises that we will tax the American people, and that if the American people are not working hard enough and they are not paying enough taxes or the economy slips, all of a sudden that perceived value of the dollar will go down. So that is a very serious problem that we will be needing to address in the not too distant future.

2000 Ron Paul 29:63
I would like to mention in a little bit more detail the H. J. Res. 90, because that is the number of the resolution that will be brought to the floor for a vote, and it is not a complicated piece of legislation, it is a single page. It just says that we do not want to be members of the World Trade Organization. People worry, well, what will this mean? It will mean that we believe in free trade. It means that we will trade with China and that we will have low tariffs and that we should not be subsidizing or managing trade for powerful special interests, but it will also mean that we do not endorse this concept that the World Trade Organization should be dictating to us the way we write our laws. The way this was stated is that we must accept the idea that we accept the rules of the WTO. I, of course, think that is a serious mistake, and that we should always work for free trade.

2000 Ron Paul 29:64
Monesque was very clear on his ideas about what free trade should be and why we should have it in relationship to this issue of war and peace. That, of course, I think is the most important. He says, peace is the natural effect of trade. Two nations who differ with each other become reciprocally dependent, for if one has an interest in buying, the other has an interest in selling, and thus, their union is founded on their mutual necessities. That is true, but what we are doing today by subsidizing and supporting a regime like Red China, not trading with Red China, but subsidizing them at the same time we see the antagonism building with Taiwan and our only answer there is to rush to Taiwan and send them more weapons, and we decide to stand in between them, I think is a foolish policy that will lead to trouble.

2000 Ron Paul 29:65
Madam Speaker, we should not be the policemen of the world. We should set a standard on free trade. We should set a standard in the ideas of liberty. We should be aware and think more seriously about what Patrick Henry said. If we are concerned only about the immediate financial benefit of some trade agreement, we forget about the bigger picture. And the bigger picture and the bigger the responsibility of all of us, my responsibility and your responsibility to our people, and the American people should think about this too. The most important thing is that we provide liberty for our people to let our people solve their problems. This blind faith in big government and this blind faith in international government and World Trade Organization, the United Nations, and this idea that we can police the world, that is a blind faith which I think has caused a lot of trouble and is bound to bring a lot more pain and suffering to us in the future.

2000 Ron Paul 29:66
Madam Speaker, I am quite confident that in due time, it will be the undoing of our system if we do not change our ways. Because technically, we are a bankrupt Nation. We talk about huge surpluses, but the huge surpluses are fictitious. The national debt is going up at a rate of $100 billion a month. There is no surplus. There is a commitment made out there, and the wealth of this country is based on borrowed money and a belief that the dollar is going to be remaining strong forever and ever. That fiction will come to an end, and we will be forced to face up to reality, and then we have to decide what really is our purpose. Is our purpose to manage people, tell them how to live, tell them how to live their personal lives? Is our job to manage the economy and distort the general welfare clause and the interstate commerce clause to the point that we tell everybody what they can do with every item they buy?

2000 Ron Paul 29:67
And are we going to permit agreements that are not treaties to act as treaties to undermine our national sovereignty and write laws for us in the Congress? I do not think that is a very good idea, and I think that is the direction that we are going.

2000 Ron Paul 29:68
I think there is every reason to believe that if we go back to what America was all about and the importance of the American policies, what made America great, we will be all right. But we have too much emphasis on the commercialism of what people want from special advantage.

2000 Ron Paul 29:69
Why is it that we here in the Congress are lobbied by lobbyists willing to spend $130 million a month? Why do they come here? Because their interests are best served because we are doing way too much. And I certainly do not believe that the answer is to regulate the lobbyists, regulate the elections or tell people how to spend their own money. What we should regulate is ourselves. We should regulate our insatiable desire to tell people what to do and how to live and how to run the economy and how the world should run.

2000 Ron Paul 29:70
That is what we cannot seem to control. We seem to not have any ability to just back away and have some belief and conviction that a free society works; that freedom works; that protection of life and liberty is important; the protection of property is important.

2000 Ron Paul 29:71
Madam Speaker, the World Trade Organization undermines property rights through the patent laws, which they have done; the Congress endlessly buying up land and confiscating land from the people, taking land from the people. We do not honor property rights. We interfere with contracts continuously.

2000 Ron Paul 29:72
The Government should be protecting liberty. The Government is not here under the original agreement with the people and the Constitution. The Government, we the Congress, the Constitution was designed to protect our liberties, not to undermine them; and yet we spend most of our time here undermining the liberties of the people.

2000 Ron Paul 29:73
Now the question is: Is that what the people want? Do the people really want us to do this and tell them what to do and how to live endlessly, and they will accept that because they will get things from us? As long as we take care of them and provide them free medical care and free education and everything is free, everybody knows we have all of that ability to create free things.

2000 Ron Paul 29:74
Most people, though, I am afraid are on to us. They think the U.S. Congress and the United States Government creates nothing. They are incapable of creating anything. About all they can do is take from one and give to another, and then in the process undermine the principles of liberty. And by doing that, we will undermine the principles of the basic concept of what is necessary to produce a good standard of living. But we concentrate not on liberty, not on freedom. We concentrate on the things that are distributed and redistributed, the advantages and the disadvantages and how we are going to get bigger government. Not only bigger Federal Government, but bigger international government, never talking about what are the advantages to the people if we just give them their freedom. Just leave them alone.

2000 Ron Paul 29:75
The people I have my greatest sympathies for are the low middle-income people. People who do not want to go on welfare and are getting ripped off by the system because they do have to pay taxes, and they are the first ones who suffer from job losses and suffer from the inflation, and they are the last ones to have any representation up here. If one is on welfare, they have representation. And if one is a giant corporation willing to send equipment overseas and fight wars, they have great representation.

2000 Ron Paul 29:76
But if one is hard working, believes in freedom, accepts the responsibility for their own acts, believes they should take care of their family, would like to be left alone, then they are seen as an enemy of the State. The Government too often wants to do something to them, like tax them more and more.

2000 Ron Paul 29:77
So I think it is time we as a Congress started thinking about something other than the transfer of wealth and the control and manipulation of people. Think again once more of the quote that I used as I started tonight by Patrick Henry: “You are not to inquire how your trade may be increased, nor how you are to become a great and powerful people, but how your liberties may be secured. For liberty ought to be the direct end of your government.”

2000 Ron Paul 29:78
If we make liberty the direct end of our government, I do not believe for one minute that we will have to worry about the prosperity. Because we have neglected the liberties of our people, I am deeply concerned about the prosperity of our people and I am deeply concerned about the international conflicts that we tend to stir up and demand that we send our troops throughout the world. I think that can lead to trouble. It has in the past. It will in the future.

2000 Ron Paul 29:79
Because we have drifted from this notion that the Government should be limited. Limited to protecting our liberty, making sure the marketplace is free, making sure that property rights exist, and making sure that we mind our own business. And quite possibly if we would do more of that, minding our own business and not spending this money overseas, we could literally do a better job taking care of our military.

2000 Ron Paul 29:80
Madam Speaker, our military needs funding. They need a morale boost. They need better training. They need a better mission. And yet we send them hither and yon around the world spending hundreds of billions of dollars, at the same time our defenses are probably as low as they have ever been.

2000 Ron Paul 29:81
But that is not a “lack of money” problem; that is a “lack of mission” problem. It is a lack of understanding what policy ought to be. Our policy ought to be, and our purpose ought to be, the preservation of liberty. The preservation of liberty means that we should have free trade and that we should talk to our so-called enemies and trade with them and deal with them, and we are less likely to fight with them.

2000 Ron Paul 29:82
But we should never fall into the trap of talking and using words incorrectly, this idea that people come and talk so much about free trade and then do not defend free trade, or do not understand it. What they are talking about is managed trade by the World Trade Organization, and it means that we also subsidize our enemies and our competitors around the world. That is not free trade. That is not related to freedom. Freedom is not that complex.

2000 Ron Paul 29:83
Fortunately for us, we have a document that is rather clear and simple that we all can read and understand. And, unfortunately, we do not read it often enough when we pass this massive legislation here on the House floor and get ourselves involved in too many things. So, hopefully, here in the next couple of weeks as we talk more about trade and we have a vote on China, as well as a vote on whether or not we should even be in the World Trade Organization, hopefully we will have more than five or 10 or 15 or 20, say: That makes sense. Why are we in the World Trade Organization?

2000 Ron Paul 29:84
We can still believe in freedom, we can still believe in trade, we can still believe in the American dream without accepting the idea that free trade and freedom means we belong to the World Trade Organization. Hopefully, there will be enough people in this Congress to send the message and say at least let us question this. Why do we feel so compelled to belong to these international organizations, joining them not with a treaty but with a mere vote of this Congress and now they are dictating law back to us.

2000 Ron Paul 29:85
Hopefully, those individuals who are a little bit annoyed with the World Trade Organization because they have encroached upon our lawmaking process dealing with trade law, dealing with labor law, and dealing with environmental law, dealing with tax law, that they will say maybe the problem is not mismanagement of the World Trade Organization; maybe we should not have that much confidence that if we get a few new managers in there, like they think they can do at the IMF. Maybe the problem is that we should not be in the World Trade Organization at all.

2000 Ron Paul 29:7 interstate commerce clause probably should be capitalized: Interstate Commerdce Clause.

2000 Ron Paul 29:62 not too distant probably should be hyphenated: not-too-distant.

2000 Ron Paul 29:66 general welfare clause probably should be capitalized: General Welfare Clause.

2000 Ron Paul 29:66 interstate commerce clause probably should be capitalized: Interstate Commerce Clause.

2000 Ron Paul 29:70 the protection of property probably should be that protection of property.

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