Are Tariffs a Strategy for World Peace?

War with China may be inevitable. When EurAmerican multinational corporations (MNCs) were allowed by our governments to trade trade secrets in exchange for opening of Asian markets, they may have sealed the world’s fate. China’s output will soon surpass America’s and her rate of growth continues to far outpace ours. She is implementing strategies that promise to replace America as the World’s empire during the next 15 years.

Every transition in history from one empire to another has been accented by great wars. The transition of the last empire was no exception. Great Britain did not acquiesce to America’s century until after the throws of WWI and WWII. Now the rapid ascent of globalization, made possible by the transfer of capital from international bankers to MNCs, has driven the world to the edge of another conflict in our lifetimes.

During the last transition, Germany, racked with debt from WWI, experienced hyperinflation with an impotent republic led by political extremists. While the rest of the world recovered, Germany’s inability to deal with its financial obligations led to a vacuum that was filled by the Nazis. Without immediate government action, America’s debt will also become unsustainable, crowding out vital services and creating societal instability similar to Weimar Germany. Given that America has the most powerful military the world has known, will America be an exception to 6,000 years of recorded history, or will our society fall prey to the severities that initiated the last world war?

The answer rests with our MNCs. They have historically persuaded our government to use America’s military to meet business objectives. And now for the first time in history, MNCs have the power to determine the path of our “empire’s” transition. If our corporations are unable to mitigate country risks by growing beyond the regulation of most countries (many are not far from that now) they will continue to rely on the might of our military. If our MNCs position themselves to succeed even as America fails, they will decide war is not in their best interests.

If enough MNCs make the leap to disavow an American connection and choose to forego the protection of our military’s gunboat diplomacy, our MNCs will support the gradual dismembering of our military, reducing its capability to strike. Given America’s inability to continue funding our military as our businesses depart, some Americans may choose to rise up similarly to Japan or Germany during the 20th century. How do we mitigate such a potential? A tariff or subsidy program could achieve full employment at sustenance wages, and could deter or delay war.

When citizens of our nation are unemployed, they have several options. For 26 weeks, they have unemployment at a rate much lower than full wages. During this Great Recession, our government extended unemployment to 99 weeks. After 99 weeks, the unemployed join the ranks of the 99ers, who are given few comforts from the American system if they are not disabled or do not have children. Instead, those without family members to rely upon or without black market skills or goods to eke out an alternative living, must join the world of the unseen, those citizens who blend into our peripheral vision not to be looked upon for fear that we too will be drawn to their fate. Our country’s lack of a comprehensive strategy to transition to globalization has condemned millions of vital Americans to this murky existence.

Rather than relegate 99ers to the dark crevices of our society, America must offer a better path. We must choose to overcome partisan maneuvering and compete with the world as best we can. Rather than continue down this political path that will lead ultimately to class warfare and further disintegration of American culture, capabilities, and competitiveness, we must recreate a consortium of capitalists and workers that benefits all Americans.

A cornerstone of that consortium is that both businesses and workers must succeed. Tariffs on foreign goods that cost the American society more than the savings they provide to the American consumer are a method for producing mutual success. Tariffs provide American factories price controls to allow domestic jobs at rates that can replace extended unemployment. During periods of innovative growth and peak business cycles when higher wages are available, those businesses least able to compete will be lost to international competition but during periods of lower innovation or business troughs, Americans will keep jobs and foreign companies providing goods to America will be the first to lose employment.

Some say that tariffs gouge the American consumer, but that does not evaluate our citizens holistically. A consumer is also a tax payer, a worker, a provider, a parent, a partaker of the environment, and a member of a community. If the net holistic benefits to the American citizen are positive for a particular product or service, then that particular product or service should escape protectionism. However, we should determine how to redistribute the gross benefits and costs within our country to equitably share the benefits and social costs.

Others say that tariffs and subsidy protections would cause American businesses to become complacent and to lose their incentive to compete with the rest of the world. We continue to use this reasoning even as our structural unemployment continues to grow. However, for the 40,000 factories that have left our shores, American ingenuity has been unable to keep pace with even no complacency. American businesses will always have an incentive to improve productivity if they wish to compete in world markets regardless of subsidies or tariffs.

Still others say that tariffs perpetuate poor quality and operating practices. America did pass through a moment in time prior to globalization when we did not envision a world of emerging countries competing through quality and innovation. However, we will never return to that moment, except for the nostalgic pining of our elders remembering “better days”. Nonetheless, offsetting wage and regulation cost differentials with tariffs will not protect American businesses from foreign quality and innovative competition. We will forever more be compelled to compete.

Mitigating wage and regulation cost differentials will only slow the rapid drain of jobs, manufacturing, and national security protection of America. Those goods which are most able to provide win-win benefits to both America and her trading partners will be available in our markets at lower costs, others at similar costs. Net benefits to America will be much greater than this wholesale gutting of American value, jobs, and self worth. During times when accelerated American innovation thrusts Americans into higher wage jobs, more foreign products will be available at lower prices.

Tariffs are only one piece of a comprehensive strategy to protect America from a plunge into obscurity. However, given the realities of our politicians’ impotence in dealing with the onslaught of multinational corporations and international bankers, it is a critical first step that should be implemented immediately if we are to provide America time to catch up with China’s immense and effectively operationalized strategies. America’s current path is not healthy for America and ultimately will not be for our economic adversaries either. If war is an inevitable part of transition, then any actions taken to delay or deter war are critical. I deem strategic tariffs a support for jobs, a net benefit to America’s finances, and a mitigation to war.

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Filed under American Politics, China, War, World Sustainability

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