Tag: trade protectionism

Trade Can Help the Poor Escape Poverty

Professor William Easterly, the economic development expert from New York University, has written an excellent comment for the Financial Times online. He writes, “The Millennium Development Goals [summit that wraps up in NY today] tragically misused the world’s goodwill to support failed official aid approaches to global poverty and gave virtually no support to proven approaches. … But current experience and history both speak loudly that the only real engine of growth out of poverty is private business, and there is no evidence that aid fuels such growth.”

At the Center for Global Liberty and Prosperity, we have continuously emphasized the power of trade to help the poor escape poverty. Unfortunately, politicians in rich countries find it easier to waste billions of taxpayers’ dollars in the form of foreign aid than to take on special interests that thrive on trade protectionism; hence European and American agricultural tariffs and subsidies.

However, the impact of rich countries’ protectionism should not be exaggerated. African countries are typically more protectionist than rich countries. In fact, they are more protectionist against one another than against rich countries. The sad truth is that poor countries are perfectly able to shoot themselves in the foot by following growth-killing economic policies – irrespective of what the rich countries do.

Foreign aid, incidentally, has been ineffective at promoting liberalization.

Lawrence Lessig’s Constitutional Amendment

Lawrence Lessig has proposed a constitutional amendment in response to the U.S. Supreme Court’s decision in Citizens United.  It reads:

“Nothing in this Constitution shall be construed to restrict the power to limit, though not to ban, campaign expenditures of non-citizens of the United States during the last 60 days before an election.”

In Citizens United, the Court said that the First Amendment concerns speech rather than speakers. Congress has no power to discriminate against speakers; hence, a source of speech - people organized as a corporation - could not be prohibited from speaking (or funding speech).

Professor Lessig hopes to introduce a discrimination among speakers into the First Amendment. His proposed discrimination will not lose a popularity contest. He wishes to allow Congress to control the speech of non-citizens.  He follows two lines of argument in support of his amendment, one less rational than the other.

The less rational line of appeal to the reader is both implicit and predictable. The Chinese are invoked along with the Chamber of Commerce. A denial of xenophobic intent follows immediately, and “We the People” appear near the end. Carl Schmitt would recognize the rhetorical construction of “friend and enemy.” Rather cleverly, Lessig manages to equate the foreign devils with the internal demons of the liberal mind. Corporations (including the Sierra Club?) and the Chinese (or other foreigner) are on one side of political struggles while “We the People” are on the other.

Lessig’s more rational line of argument: “elections are private. It is we - citizens- who are to select who is to govern us. And it is completely appropriate for us to protect the debate we have about that selection by limiting disproportionate spending by non-citizens.” He later suggests the propriety of “protecting elections against undue influence by non-citizens.”

Notice Lessig moves from an widely-held premise “only citizens should select those who govern” to conclude “we should protect elections against the undue influence of non-citizens.” His idea of “dependence” relates his premise to his conclusion. Allowing spending by non-citizens would make voters dependent on them and thus preclude select of the our rulers by “us.”

What is missing here, oddly enough, is the citizens themselves. After all, the non-citizens do not simply give money to voters. They spend money to create and communicate political speech. Voters are the intermediaries between that speech and the selection of government officials. Citizens decide how much influence political speech of all kinds should have.  Lessig’s concern about undue influence seems to be a concern that voters will be fooled by internal or external foreigners to the detriment of our nation. But the Constitution says that citizens, whatever their failings, are the best filter of speech.

Lessig’s amendment would substitute the judgment of Congress for that of citizens at least in regard to the speech of non-citizens.  Congress would decide how much spending on speech is “due” and how much would lead to “undue influence” by non-citizens. A court would then be called upon to decide whether the limits chosen by Congress constitute a de facto ban on speech. This process of legislating and litigation would yield how much speech citizens are allowed to hear.

Keep in mind that not all the ideas of foreigners are inimical to the people of the United States. Liberals did not seem to mind the support Barack Obama received from cheering crowds in Berlin. Perhaps Americans should hear about the suffering caused abroad by trade protectionism. It is also true that the interests of foreigners are sometimes at odds with the interests of Americans. Who should decide which ideas espoused by foreigners are good for the nation and which inimical? Should Congress decide or citizens?

We might also wonder whether Lessig’s amendment would even apply to corporations. The corporation is a product of contracts among owners and others. These contracts provide for agents who run the corporation and decide many things including whether to fund political speech on behalf of the enterprise. All of this, contracts included, are the actions of real people, most of whom will be citizens. Would a court define “non-citizens” as a group of citizens who associate together in the corporate form?

Lessig invokes the framers of the Constitution to support his concern about non-citizens. Here he has some historical warrant for his arguments. The founders were concerned about foreign influences undermining the new republic in favor of monarchy. But the United States is now much older and more stable and aptly open to foreign influence through investment and trade. If anything, its citizens are too concerned about the dangers coming from abroad. That is all the more true when the non-citizen or “the foreigner” is identified as other Americans who happen to be associating in a corporate form.

Obama’s Troubles and U.S. Foreign Policy

At their National Security Experts blog, The National Journal asks:

President Obama is in a rough political patch…So, what does his weakened position mean for his handling of foreign affairs and for the tack that allies, rivals and outright enemies take toward the U.S.?

I respond:

I don’t believe that the president will rely on a major foreign policy initiative to turn around his political fortunes. He has many things on his plate right now. He spent just nine minutes on foreign policy in the SOTU, and the American people have clearly signaled a desire to focus on problems here at home.

I’m not entirely happy with this turn of events. I think the country’s turn inward – in the form of trade protectionism, nativism, and anti-immigrant sentiment – is particularly worrisome. But the wise course for those in Washington is to come up with a foreign policy that can be sustained with a modicum of popular support. They should find a way for us to be engaged in the world without being in charge of it.

So far, I see no evidence of a change away from the assumptions that have guided U.S. foreign policy through four post-Cold War administrations, two Republican and two Democrat (plus GHW Bush for part of his term). The just released QDR repeats many of the same mantras about U.S. power as a global public good that we’ve heard for years.

Up to now, the practice has been to distort and confuse the purpose of U.S. foreign policy. The policy elite in Washington and New York know that the public expects the U.S. military to be used to advance American security, when in fact much of what it does underwrites the security of others. As Michael Mandelbaum wrote several years ago, “To make sacrifices largely for the benefit of others counts as charity, and for Americans, as for other people, charity begins at home.”

Obama and his team, and probably his successor, might manage to sustain the dominant posture for a while longer. Other countries have no great desire to assume responsibilities for their own defense, or for policing their respective regions.

But at the end of the day, all politics is local. Americans can’t be expected to care more about things that occur 8,000 miles from our shores than they do about things in the Gulf of Mexico, or in New Mexico. In an era of crushing fiscal imbalance, and an increasingly complex international environment, now is the time to revisit some of the core assumptions of the past two decades and ask: Is this where we want to be 20 years from now, with the U.S. military still the world’s policeman, and with the rest of the world anxious, querulous and resentful when we use that power, or even when we don’t?

If we choose to make a change, even a modest change in the direction of greater burden sharing with allies who have grown too comfortable under the U.S. security umbrella, we might look back on this period fondly. If we don’t, we are likely to see it as a missed opportunity.