The various, original thirteen colonies had differing reasons for rebelling against the British. Within each colony, there were those — many historians say as many as there were rebels — who did not want to rebel. Indeed, at least in the beginning of the revolution, there were as many colonists fighting for the crown as there were those fighting against it.
Just as each colony had its particular reasons for rebelling, the individual, both for and against revolution, no doubt had his or her own particular reasons for the choice he or she made. In many cases the choice hinged upon the economic status of the chooser and the means of achieving that status. I cannot say with certainty how prevalent this particular reason for choosing one side or the other may have been, only that it was a significant factor for many.
In private letters and diaries, as well as in public pronouncements, many of our Founding Fathers listed the economic restrictions imposed by Great Britain, as well as tax matters and other considerations, as evidence of the mother country’s tyranny. Whether these economic issues emanated from the requirement that finished goods be purchased from the mother country, even if they originated elsewhere, or that trade be funneled through the mother country, limiting the trade contacts of domestic merchants and traders, or that raw material be sold exclusively to British wholesalers or manufacturers, limiting available markets, or any of a host of other economic and trade restrictions were paramount in the hearts of the Founders, it is clear the limitations placed upon trade and manufacturing commerce rankled.
In modern times the steady adherence to an export replacement policy by the federal government of the United States, and the attendant, massive national debt, is leading the United States into a long term colonial, economic relationship with the giant, emerging producer nations of the Far East. Just as the British tried to enforce a colonial relationship with the original thirteen states, the producer giants and creditor giants of Asia will soon be in position, not through laws but through trade and credit codicils, to dictate and restrict trade choices in this country.
This de facto regulatory arrangement will be far more effective and lasting than the misguided attempts by the British to regulate by statute. This new arrangement will be, not with a central government, but spread throughout the entire business spectrum by individual agreements between importing and exporting entities. It will be made possible by the coming devaluation of the dollar and the migration away from the dollar as the effective world exchange currency.
Constant export replacement by a nation over long periods of time, without insuring the exports surrendered are replaced by new exports of equal or greater value, is the path to colonial status. Yet, this is precisely the policy the Unites States is following and has for almost a century.
Milton Friedman once replied to this criticism of his belief in “free trade” by pointing out that we, the industrialized West, were exchanging paper currency, a commodity very inexpensive to manufacture, for goods and services of great material worth. How, he would ask, can that be a poor exchange for the West?
Well, of course, it is not a bad trade if the “West” intends to default on the implied promise to pay that paper currency represents. The people selling us goods and services except dollars in return because they believe this promise, they believe the dollar has value. If the day comes when that belief is no longer tenable then the power in the relationship between East and West flips.
That is what has been the fatal flaw in free trade all along. It depends, if a wealthy nation is to remain so, upon the constant replacement of any export goods and services lost to other nations by new export goods and services developed by that nation. The development of those goods and services is entirely dependent upon one of two things.
First, we can replace them with goods and services that emerge from higher up the technology chain. This is what we have traditionally depended upon. This type of export replacement is entirely dependent upon creativity and education. Creativity is dependent upon freedom of thought and expression. Education is dependent upon both public and private support in the form of money.
Ironically, the political right in the United States, foremost proponents of the notion of free trade, was captured by the “supply side” theorists and neoconservatives who advocated drastic reductions in federal, state and local tax rates and an expansionist military policy at the same time the right made its “Devil’s bargain” with the radical social conservatives displaced from the left by that political wing’s notions of personal freedom. The marriage of the social and economic conservatives set the nation on an anti-intellectual course at the same time export replacement came into full flower as the nation’s primary foreign policy goal.
The result of this Devil’s bargain has been the slow destruction of the California public school system, once the pride of the nation, the retrenchment of the excellent public universities throughout the west and midwest of our nation and severe cultural criticism of free expression. In short, the right has mounted a dual attack on the two elements required to create and develop export replacements further up the technology chain.
The second potential source of exports to replace those lost are those produced from older, familiar technologies. However, these replacement exports are, generally, labor intensive and require inexpensive labor. They frequently require very low operational costs because, being low on the technology chain, the required knowledge is now widely disseminated throughout the world and competition can be fierce. To compete effectively a society must lower wages and must relax other laws and regulations that increase production costs.
When a nation arrives at a point where wages and the manner in which it regulates itself are, de facto, imposed by external forces beyond its control, that nation has achieved colonial status. When that day comes for us, our nation’s unwavering allegiance to export replacement and its continued willingness to placate the economic and social conservatives with the Devil’s bargain will severely limit our options to deal with the future.