"Perhaps some of them are spineless, right?"
That's what Austin Petersen, a Republican U.S. Senate candidate in Missouri, had to say about his own party's unwillingness to stand up to President Donald Trump on trade. Considering that the White House is already planning to imposing historic tariffs on Chinese products, and the European Union has already retaliated against American goods, this conversation about trade policy couldn't come at a more important time.
Indeed, while Trump continues to brag about America's booming economy, the trade war he started for no discernible reason could very soon derail that.
Much of our conversation focused on trade policy — as well as on Grover Cleveland, Petersen's favorite president and the subject of my master's thesis — but there were deeper themes to explore. One of the biggest problems in contemporary American politics is the extent to which hyper-partisan ideological division has smothered our ability to have a free-ranging debate. On virtually every social, economic and foreign policy question you will find two sides — the one supported by Democrats and the one supported by Republicans — with little room for third positions or for those who may hold "progressive" views on some issues and "conservative" views on others.
That's what made me reach out to Petersen, a prominent libertarian intellectual who is to some extent a reluctant Republican. There are many issues where we disagree, but I appreciate the fact that Petersen forcefully opposes Trump on matters like trade, the prison-industrial complex and many civil liberties issues, while agreeing with him on abortion and the Second Amendment. Petersen is also happy to acknowledge that his views overlap with liberal and even left-wing positions in some areas.
If we are going to move past our era of partisan gridlock and return to getting things done, it will be necessary to find common ground with those who may disagree with us about many things. This is a moral imperative as well as a pragmatic one: What's at stake is our ability to be a society that can disagree without hatred or hostility and can hold conversations in measured tones without always going for an opponent's jugular.
Trade policy, an area where divisions between "left" and "right" are more ambiguous, seemed like a good place to start.
I would like to elaborate on the ways in which libertarian ideology -- your ideology -- intersects with opposition to President Trump and the apparent Republican status quo. Does that make sense?
Which issues do you believe can be used to build bridges between the libertarian movement and various other progressive movements? We can start, for example, with civil liberties.
Sure. Probably the first thing I would say is that the United States is about 5 percent of the world’s population, but we have 25 percent of the world’s prisoners. We incarcerate a higher percentage of our people than any country on earth. I think we have far too many people who are in prison for nonviolent crimes. That’s costing tens of billions of dollars a year.
The federal war on drugs is a $27 billion-a-year, massive war on our own people. I think it’s time to bring the federal war on drugs to an end and look towards allowing the states to set regulatory policies when it comes to these issues. So that, along with probably a dozen other issues, whether it’s corporate welfare, mass surveillance or civil liberties. I was actually at Occupy Wall Street back in 2011, I believe, in New York, and they were talking about getting rid of the Federal Reserve Bank. Those with the -- you know, many of them were on Bernie’s side, Bernie Bros, progressives. They have a problem with the central bank.
It’s interesting that you mention the Federal Reserve, because one of Donald Trump’s favorite presidents is Andrew Jackson. [Laughter.] You know where I’m going with this. I'm a liberal Democrat myself, but I’m not going to be a hypocrite. Both parties have ignored Jackson’s legacy on this issue. Why do you think issues like trade and tariffs spark so much debate but the Federal Reserve doesn’t really raise much concern?
Well, because even open Democrats like Paul Krugman have come out to lauding the benefits of free trade. Free trade has done more for lifting people out of poverty than almost any other force on earth. Globalization has been a powerful positive force. I think something like a billion lives [have] been saved due to international free trade.
When it comes to central banking, I think that progressives -- maybe they favor government interventions in the market, but they're opposed to market interventions that generally benefit the rich and powerful at the expense of the middle class, such as government-backed monopolies and corporatism. I don’t know a lot of actual progressives who supported the stimulus or bailouts or "cash for clunkers," because that was picking winners and losers. That was corporatism, and corporatism is one of the big things libertarians and progressives agree on. We should end corporate welfare. We should not be having oil subsidies or guaranteed bailouts for Wall Street, agribusiness subsidies, the Export-Import Bank. It goes on and on.
A lot of the practices you're describing have been entrenched on a bipartisan basis for decades. The last president we’ve had who was opposed to free trade was Herbert Hoover. The last president who was more of an isolationist than an interventionist would have been Calvin Coolidge. When you're talking about corporatism and government involvement on behalf of big business, I would say the last president who opposed that was Grover Cleveland, correct? What do you think it would take to reverse a lot of these entrenched assumptions, and what would you say the assumptions are in the first place?
I think that most people view the economy as if it’s a zero-sum game, but that’s incorrect. Because, for example, when you go and you buy something from someone, you say, "Thank you," and the person you buy from says "Thank you" as well. Mutual trade results in mutual benefits, so you actually are creating a larger pie. Some people think that because one person may benefit more from a situation then that other person is going to get screwed. But that’s just not the case. Both parties are benefiting because all value in the marketplace is relative. This is why we’ve gotten away from things like the labor theory of value, which people like Karl Marx and Adam Smith both championed.
All the modern economists agree that value in the marketplace is derived from what you would pay for something at that time or place. So it’s all relative. When it comes to the issues of international trade, I think people are demonizing it because they don’t understand the trade deficit issue. If people are saying, like President Trump and others, “Well, we have a massive trade deficit with Canada or China" or whatever -- how this really plays out, if I can spin an anecdote here:
If I go to Burger King and I purchase a cheeseburger, I have a trade deficit with Burger King because I’ve given them paper and I’ve been given the cheeseburger. Do I need to start manufacturing cheeseburgers in order to compete with Burger King? No. If other countries want to take this piece of paper and give us durable goods, well, that’s to our benefit. That benefits us.
I want to unpack what you just explained because Trump has obviously undermined a lot of America’s trade alliances, not only in the Pacific Rim but also on a trans-Atlantic basis. You're offering a pretty harsh critique of the president on trade policy, but the Republican Party in general has not stood up to him about this. If they understand these economic principles in the same way you do, why don't they say that?
I don’t know the answer to that question, Matthew. I’ll be completely honest. Perhaps some of them are spineless, right? Maybe some of them are seeking re-election. But I don’t know for sure. I would highly recommend that you would reference an article that just came out on the Daily Wire. [It's an interview with Petersen.] I go into great detail.
But here’s the thing: I have to represent the people in Missouri, and our No. 1 industry is agriculture. Our farmers are going to get hit on both sides of this tariff, because not only are they going to get slammed with Chinese tariffs on soybeans and wheat, they're also going to get slammed on the tariff because they purchase metal to make their grain bins. It’s a double hit for many of our farmers here in the state of Missouri.
Maybe those legislators are people who aren’t looking after the best interests of their state, but I am. And I know that what’s in the best interest of the people of Missouri is that they are able to have the lowest cost possible for them to make a determination about how to spend their money wisely so they can invest in their own businesses and put more food on the table.
I don’t know, again, why those people make those decisions, but I stood up and said that I disagree with the president on this. However, I want to give him one bit of credit on this because I think it’s important to be intellectually honest. When he was at the G7 summit, he gave an inclination that perhaps he is smarter than his opponents give him credit for. When they were labeling him a protectionist, the president turned around and made an offer: “I will drop all tariffs and barriers to trade if you will do the same.” Honestly, I thought it was a diplomatic masterstroke because he exposed them for being the protectionists that they are. He’s right.
I’m going to discuss one more point about trade, and then I want to return to some of the earlier questions. I wrote my master’s thesis on Grover Cleveland’s 1887 State of the Union address. He’s actually my favorite president.
Mine too! Same!
I’m also writing my dissertation about him. I talk to my fiancée endlessly about him and she never gets bored.
[Laughter.] I love it. My favorite story about him was the one where he went on a boat where he had the cancer surgery in the dead of night --
In 1893. Yes, of course. The tumor has been preserved at the Mutter Museum in Philadelphia.
It’s in a jar of formaldehyde and it’s absolutely disgusting. I recommend it.
[Laughter.] That’s cool. Fascinating, I didn’t know that. I ought to check that out. Thank you.
Cleveland argued in his 1887 State of the Union message that imposing unnecessary tariffs was a form of theft. He forced the 1888 presidential election to revolve entirely around tariff reform, his issue. It simultaneously strengthened the presidency while at the same time focusing on an issue that really reduced executive power.
I bring all this up because 130 years ago, populism was associated with tariff reform, with creating free trade. These concerns about globalization and loss of national sovereignty weren’t really prevalent. How can someone like you, who is trying to recreate that type of populist movement associated with free trade, do so in the 21st century?
Great question. Everybody loves a good story. Probably the best way this story was ever told was called "The Candlemakers' Petition" by Frédéric Bastiat. It’s a satire of protectionists' tariffs, where it sort of expands on his arguments against mercantilism.
In this story, what they do is they force all windows, skylights, curtains -- everybody has to shut all their blinds. That way we can lead to the manufacture of candles, because if we want to protect the candle industry, then we can’t allow people to have a source of free light. If you're using a tariff to force people to pay more for domestic goods when cheaper foreign imports are available, it costs everybody. Consumers have to pay higher prices.
The nostalgia element that I was discussing earlier is illustrated perfectly in the story of the ice delivery man. It used to be that in New York City, before refrigerators were invented, there was a block of ice that would be delivered around the city and a man would deliver ice cubes to people. Once the refrigerator was invented, that was no longer necessary.
So should the government have stepped in and protected the job of the ice delivery man? Should we continue to hinder progress and innovation and technology in order to protect industries that are dying out? I don’t believe so. We have to allow the market to pick the winners and losers. We have to get people trained in new industries. That’s how we’re going to move forward. Not with protectionism, not with nostalgia, but with freedom, free markets, free trade.
Earlier I asked the question about corporatism and the government picking winners and losers. What assumptions do you think have been embedded in our public consciousness about the relationship between the government and its people that have allowed these things to happen? How can those be effectively combatted?
Great question. Certainly no offense should be taken, but the problem I think with the socialist mindset, the central-planning mindset, is that they would argue that just because we don’t want the government to do something doesn’t mean we don’t want it at all. If we don’t want a government-established church, that doesn’t mean that we’re against religion. If we don’t want the government to grow wheat, that doesn’t mean that we’re against the production of wheat. If we don’t want the federal government involved in our school system or education system, it doesn’t mean that we don’t want education. I think that’s probably the biggest fallacy that we have in the United States. Actually, I know it is. It’s black-or-white thinking. It’s the bifurcated thinking policy, right? It’s the old George W. Bush, "If you're not with us, you're with the terrorists." You have to be this or you have to be that.
Unfortunately, so many of these policy discussions dwell on shades of gray. As a matter of fact, I want to pull up an H.L. Mencken quote for you which is really applicable to this. Just a second . . . yes, “For every complex problem, there is an answer that is clear, simple and wrong.”
I have two questions left for you, and for one of them, I can use my own Mencken quote for: “The whole aim of practical politics is to keep the populace alarmed and clamoring to be led to safety by menacing it with an endless series of hobgoblins, all of them imaginary.” If you had to identify the hobgoblins used by Trump, used by traditional conservatives and used by the left which you think infringe upon liberty, which would you identify?
Good question. Let me think about that for just a minute. Every politician, to the least and most successful politician, has something that they demonize. That’s how they take power. They say, “I will save you from this.” I’m more of a Reaganite when it comes to immigration. I love immigrants and I think if America is the greatest country in the world, people are going to want to move here to the United States. I think people wanting to move to United States is a good thing. It’s because we are a free nation that people want to move here.
I don’t think people should want to move here because they get benefits, right? But because they want to work hard and participate in our system of mutual trade and free markets and social interactions. I’m not afraid of immigrants. I think that there’s a strong anti-immigrant sentiment in this country and I don’t agree with that. I think Ronald Reagan knew rightly that America is the shiniest City on the Hill. I don’t think we should turn ourselves into a fortress. I think we should be a free country. That actually kind of reminds me of all the Harry Brown quotes that I can use tie this up. “A welfare state is afraid of every poor person that tries to get in and every rich man that tries to get out.”
I will close then with the question of -- this is for my liberal readers. As I am a liberal myself, it is something that I think should be addressed. What would you say to liberals who are concerned about the libertarian position regarding people who are poor and rely on government benefits?
Conservatives need to accept the libertarian view on government and libertarians need to accept the conservative view on institutions, families, friends, neighbors and churches that will be needed if we have a smaller government. The belief is that if government doesn’t do something then society won’t either, but I disagree with that. I think that if we are able to keep more of our own money, the people would be more charitable. Maybe the liberals don’t have as much faith as I do in our fellow men, but I do. I believe that people want to help one another. I believe in the economic prosperity that ensues when you have a free capitalistic society.