At the very end of a long and costly war against a hated common enemy, two political factions resumed a bloody conflict that would decide the destiny of an ancient empire. On the one side were the intelligentsia: teachers, doctors, lawyers, and professionals of the nation. On the other side were the common men: laborers, workers, and farmers of the nation. In the conflagration of politicking and force of arms, the common man won out, driving the intelligentsia out of power for the next half century.
With a populist “common man” leader who had won the hearts and minds of his nation, the People’s Republic of China was born, and over the next two and a half decades, China’s advance as a 20th Century power was stunted and incomplete and remains a caricature of the western societies that it now seeks to compete against. However even the United Soviet States of Russia experienced more robust economic expansion and modernization than China after the Second World War, even though the Communist Party of China emulated the same Soviet style communist economic reforms.
While he is credited with the modernization of China and steady growth of his nation after the difficult war period, the truth is far more complex, and Mao Zedong’s protectionist industrial policies ultimately lead to the deaths of 60 to 70 million of his countrymen to famine. So why did China’s modernization and economic not only lag behind that of even the USSR, even when they employed the same socialist economy, but lead to the needless deaths of so many millions of the very people they sought to better?
In a word: protectionism.
The worst thing in life is to end up with people who make you feel alone.
-Robin Williams, World’s Greatest Dad
One of the central pillars of socialism is that government not only can maintain control over every element of the economy but must do so. It would, after all, be a strange form of socialism where people had the freedom to pursue their own economic goals, to contract with whomever they wish, and to make their own productive decisions. In that respect, the Soviet Union and People’s Republic of China were largely identical, from the standpoint of bureaucratic control of every aspect of labor, capital investment, and even living arrangements.
The USSR, however, maintained a massive trade base, despite their espoused ideological hostility to western nations. In addition to trade with western European nations, like France and England, the USSR possessed many satellite nations with which it traded goods, services, and other basic commodities. Third world markets, including many countries in the Middle East and Africa, also contributed to the Soviet trade economy. Where their ideological differences did not prevent them, the USSR saw such trade blocs as one of the major ways to spread its political influence.
Mao, however, chose a more traditionally nationalistic path for China, instituting protectionist economic measures that limited trade to capital machinery beyond the capabilities of Chinese manufacturing to produce. As much as was possible, products such as food, basic building material, oil, coal, and other resources were produced domestically, because, presumably, this was best for the development of the Chinese economy. What foreign trade existed was limited to a very specific bloc of trade partners. For a while the Chinese economy grew, though coming from the destruction of the Japanese occupation years, the economy couldn’t have done anything but grow.
When several years of drought crippled the agricultural sector in China, Mao remained firm on his protectionist political policies, and forced his starving nation to depend on domestic sources of food. However his ignorance of the severity of the drought and his mismanagement of farmers exacerbated the food shortage that could have been alleviated by simply importing food from abroad. Instead the nation wide food shortage became the outright famine that claimed tens of millions of Chinese poorest farmers and workers.
This is the legacy of protectionism.
We are products of our past, but we don’t have to be prisoners of it.
-Rick Warren, The Purpose Driven Life
From an economics standpoint, the one thing that protectionist policies do extremely well is create shortages of goods and services. These are the very same goods and services that the people of a society need to make their lives comfortable and, in some cases, possible. Under normal conditions, increasing prices indicate a increasing demand, either from a new market or a serious shortage. These increasing prices encourage suppliers to provide more of these goods and services to the market in order to meet this demand, because higher prices means increased profitability.
In the case of rising food prices, it means farmers and ranchers can make more money producing more food. More food obviously reduces the threat of hunger. Protectionism, however, eliminates possible foreign suppliers, no matter how inexpensive, from the market, because it is an economic policy designed to create barriers to non-domestic suppliers. So what happens if there aren’t enough domestic farmers and ranchers to meet the needs of the people? We already know what happens.
Worse, protectionism isn’t even a new idea. Trade barriers between nations and empires were the norm for thousands of years. Controlling who and what came into your country was the guiding principle of the Roman Empire. If they found a source of a good or services in a neighboring territory that they needed, they didn’t open trade negotiations. They sent a Roman Legion and claimed it for Rome. The Imperial Chinese were no different, and their armies were sent on “trade missions” across central and east Asia to “negotiate trade” in bloody wars for thousands of years.
The entire reason both Imperial Japan and National Socialist Germany invaded their neighbors in conflicts that ultimately became the Second World War and costing the lives of millions of men and women around the world in the first place was to acquire foreign markets and turn them into domestic markets, making resources that were not available to them through trade, available through conquest. This is the fundamental truth about protectionism and why it is fundamentally unAmerican.
In a land of plenty where the pursuit of happiness is cherished, especially when we consider the alternative, what kind of patriot supports a government policy that provably does more to hamper the pursuit of happiness for poorer Americans and ensures less is generally available for everyone? What kind of patriot uses government power to reduce freedom of commerce, the very definition of socialism? No kind of patriot at all.
Liberty is For The Win!