Tariffs, aid and national interest

William McKinley

It goes – or rather ought to go – without saying that national governments should look after national interests. After all, that’s why they were instituted in the first place.

This generalising truism is the overarching absolute of politics, and it’s propped up by the proverbial platitude about charities and where they begin. Difficulties start, as they always do, when we move from the general to the concrete and then inevitably from the absolute to the relative.

Because the task of understanding what is and what isn’t in national interest is often difficult. There cracker barrel philosophy, these days fashionably called ‘common sense’, won’t suffice. Other philosophies, moral, political, utilitarian, have to come into play, along with such disciplines as history, sociology, psychology, economics, anthropology – and I’m sure I left a few out.

When that happens, objective and absolute will always be surrounded, often supplanted, with subjective and relative. And if doctrinaire absolutes fight back too hard, they can do more harm than good.

Almost 50 years ago I had a long conversation with Texas Rep. Ron Paul, then my local congressman. I still hadn’t found a way of relating my intuitive conservatism to specific philosophies and policies, and my friends from the Reagan campaign recommended Paul as a good source of knowledge.

A greenhorn though I was, I was still surprised at Paul’s commitment to no foreign aid under any circumstances. I asked several questions, such as ‘What if we must cultivate an ally in Africa or Asia?’ or ‘What if a country suffers a natural disaster and millions of lives are at risk?’ or ‘What if we must counter the Soviet influence in the region?’

All those questions received the same reply: “No foreign aid,” with an ascending emphasis on No. That answer lacked some elasticity for me even in my virginal political state and, though no longer a virgin, I still feel the same way.

The late economist Peter Bauer wittily defined foreign aid as a transfer of funds from poor people in rich countries to rich people in poor countries, which highlighted the vast potential of foreign aid for abuse and corruption at both ends.

However, if we look at foreign aid from the standpoint of national interest, another definition may also be valid: it may be a charitable way of achieving selfish purposes (which is to say the nation’s own).

Foreign aid is justified when a nation uses it to advance its strategic position in the world and can afford to dedicate funds to achieving that end. Millions of people dying because their own government can’t cope with a natural disaster is another reason for aid. After all, it doesn’t hurt to take the odd bow to our Christian heritage.

But that’s all: no other valid reasons for foreign aid exist. That’s why the UN’s rigid demand that every developed country spend 0.7 per cent of GNI on aid is asinine, and Britain’s succumbing to that demand in 2013 even more so.

It’s impossible to attach a precise number to the need for providing foreign aid. But the need has to be sound. At the moment His Majesty’s Government feels flush enough to spend millions on such urgent projects as promoting DEI in Serbia’s labour force, bankrolling a transgender opera in Columbia, and helping China to grow more rice.

Now, China can easily buy Britain several times over, and probably has already done so to a large extent. It’s the Chinese who should send aid to us, not the other way around. As to spending public funds to export perversion globally, I have no words to describe that, having promised Penelope never to use obscenities in print.

President Trump’s approach to foreign aid is close to Ron Paul’s in its rigidity, although I prefer that extreme to using aid as a tool of socialist internationalism. Isolationist rhetoric in general, including ‘no foreign aid’, plays well to the galleries, and this is an important consideration in democracies.

Hot damn, why should I give my hard-earned dollars to foreigners 10,000 miles away, Americans say, banging their fists down, and by and large they are right. But ‘by and large’ doesn’t mean ‘always’. The public can’t be expected to think with nuances, but it would be nice if their leaders could.  

Trump’s views on tariffs have the same isolationist roots, but that matter is much more serious.

One can say a similar thing about tariffs as about foreign aid: inflexible commitment one way or the other is ill-advised. Tariffs too can serve political ends; they can act as a commercial way of achieving non-commercial aims.

Trump’s first acts prove that point: by threatening steep tariffs he coerced concessions from Columbia, Mexico and Canada. Those concessions were so slight and meaningless that one can’t quite shake the impression that the tariff bluff was simply grandstanding and a reminder of who is boss.

Aesthetics apart, there is nothing much wrong with that – what’s democracy without a touch of populism and tough rhetoric? Sometimes brinkmanship pays, and threatening war, shooting or trade, is a time-honoured tool of geopolitics.

But Trump insists on praising tariffs as a factor of prosperity, self-refutingly admitting at the same time that Americans will suffer “short-term pain” when his tariffs go into effect. “Short-term” sounds open-ended to me. What’s short-term? A year? Two? Ten?

High tariffs inflict pain on the country imposing them and on the country on the receiving – and retaliating – end. This is economic ABC and one of the few things economists of every political hue agree on. I’d recommend that Trump read Adam Smith, Milton Friedman and as many economists in between as his attention span can handle.

His argument that McKinley introduced 50 per cent tariffs on all imports and yet the US economy grew during his presidency is somewhat lacking in intellectual rigour. This is a rhetorical fallacy known as post hoc ergo propter hoc (after that, therefore because of it).

First, McKinley framed the tariff bill bearing his name when he was a congressman, not president. That Republican bill became law in October 1890, and a month later the Democrats won an electoral landslide.

Using McKinley’s example is ignoring the totally different nature of the economy at the peak of the Industrial Revolution and now. Then the economy was oriented mostly towards the producer, not the consumer.

A consumer economy hadn’t yet arrived, and most Americans worked either in agriculture or manufacturing – as opposed to only 18 per cent who are so employed today. Moreover, the volume of global trade was a fraction even in real terms of the over $30 trillion a year it is today.

Under those conditions, protecting American jobs in manufacturing and agriculture might have paid dividends, while the effect of tariffs on the standard of living was negligible.

The financial system then was also such a far cry from today’s that even its echoes don’t reach us now. McKinley was a champion of the gold standard, and in fact won the presidency in 1897 on that promise. Gold, not the dollar, was the world’s reserve currency, which gave the US no competitive fiscal advantage and didn’t encourage buying more than the economy was selling.

Also, McKinley sold his protectionist ideas by promising that tariffs would replace income tax. If the same promise were on offer today, I’m sure most Americans – most anyone – would be ecstatic. But it isn’t, and the purely economic arguments for tariffs are spurious.

The gold standard is now a distant memory, and even paper money is on the way out. America sits at the hub of the world’s financial system, and her sovereign debt is denominated in her own currency. That encourages rapacious spending on the part of both the state and the public.

Above all, since McKinley’s presidency, the whole US economy has done an about-face, turning away from producing and towards consuming. It’s not the steel manufacturer in Pittsburgh who is king, but a Mr Smith in Wichita who buys tools made of steel at his local hardware store.

And if those tools cost 15 per cent more due to the government’s urge to protect a couple of thousand jobs in the steel industry, Mr Smith will hurt. More important, he’ll have less money left over to buy products made by successful companies that don’t need protection, hurting them as well.

This is a crude way of communicating yet another truism: a trade war has no winners. Both countries involved lose, and it’s not a foregone conclusion which one will lose more. No sound economic argument in favour of tariffs exists, which doesn’t mean no argument, full stop.

A threat of extortionist tariffs can have the same effect as a threat of military invasion. If the other country takes the threat seriously, it may reconsider some practices the issuer of the threat finds objectionable. But I just wish Donald Trump didn’t take the public for fools with his specious references to McKinley. These just don’t work, Mr President.

Le Bon would have a field day

Sigmund Freud made numerous admiring references to Gustave Le Bon’s 1895 book Psychology of Crowds. But in spite of that, that book was good.

A crowd isn’t just more than the sum of its parts, argued Le Bon, but something qualitatively different. Its principal characteristics are “impulsiveness, irritability, incapacity to reason, the absence of judgement or the critical spirit, the exaggeration of sentiments, and others”.

I loathe crowds with unmitigated passion, partly because of physical aversion and partly because I grew up in a country where individuality was discouraged to the point of being proscribed.

We were all ordered on pain of death to toe the Party’s ‘general line’ in the spirit of ‘proletarian collectivism’, to scream ourselves hoarse at rallies blessed by the appearance of whoever embodied the general line at the moment.

I left all that behind me when leaving the Soviet Union as a young man – or so I thought. I was wrong though. The inner need of some, dare I say most, people to be part of a baying throng exists independently of any political cause.

Hence it can be marshalled in support of any such cause, good, bad or something in between. One gets the impression that the desire to emulate a herd of cows all mooing at the same time lurks in most breasts, waiting for the right stimulus to come out.

That takes some predisposition, which I lack. As I grew older and wiser, my self-esteem was abating in inverse proportion. But whether it was at its apex when I was a youngster or at its nadir as I am now, I’ve always refused to share in a collective conscience. If I go to hell, I’ll do so in my own fashion, not as part of some corporate entity.

In that connection I remember a conversation I had with an older French friend some 20 years ago. During the war he had fought with the Free French, ending the war in Berlin. Serving as an army officer, he said, were the best years of his life.

I said I could never be a soldier because I hated taking orders. “I didn’t mind taking orders,” he replied, “because I liked giving them.” “That,” I said, “is something I’d dislike even more.”

This foray into the past isn’t as an exercise in solipsism, but merely an attempt to sketch a mental and psychological vantage point from which I observe with distaste or even horror the mass psychosis surrounding Donald Trump. The videos of him appearing at MAGA rallies remind me of the Walpurgisnacht I witnessed in the USSR and also of the newsreels depicting Mussolini with his black-shirted mobs.

This isn’t about any specific policies put forth by Trump. These must be analysed on merit, irrespective of the source or the mass response they elicit.

In fact, I quite like most of Trump’s policies, although not all. In fact, speaking to a virulently anti-Trump American at a party last autumn, I said (inexcusably rudely) that voting for Harris was a certifiable symptom of a mental disorder.

Some of Trump’s policies may come to grief, or they may not. Most, I believe, will produce a beneficial outcome, and none is likely to result in a disaster. But his basking in mass adulation, encouraging the herd instincts described by Le Bon, is a disaster already. Its corrupting effect is much more toxic than the failure of any policy can ever be.

Trump isn’t the threat to democracy his detractors depict him to be with hysterical spittle-sputtering that matches the eye-popping enthusiasm of MAGA crowds. But then neither is he the saviour of mankind.

Trump has been in the public eye for almost as long as I’ve been in the West, and I remember his appearances on American TV when he was a relatively young man in his late 30s, early forties. Comparing those memories with the reality of Trump today, I feel certain that since then he must have assiduously cultivated his gesticulation, facial expressions and jutting jaw in, perhaps unwitting, imitation of another mass communicator, Mussolini.

Many observers have pointed out this parallel, and Private Eye spoofed it by mislabelling the two photographs placed side by side. Most of such commentators dislike everything Trump stands for, which I don’t. But the parallel is unmistakable, as is the crowd’s reaction.

While it’s silly and disingenuous to equate Trump’s policies with Mussolini’s, I fail to see much difference between hysterical crowds screaming “Il Duce! Il Duce!” and hysterical crowds screaming “Make America great again!” And neither can I ignore the similarity of the two men’s reaction to human beings acting like a herd of dehumanised creatures.

Even when they are on their own, having a civilised conversation over a glass of something, Trump’s camp followers – far from all of them Americans, by the way – display the characteristics Le Bon identified in crowds. They may leave the crowd in body, but in spirit they remain its fragments.

People who are otherwise eminently capable of exercising critical judgement put that faculty on hold when Trump or his policies come up. Trump is beyond criticism, just as Stalin, Hitler and Mussolini were to their acolytes. That they were evil and he isn’t is true but beside the point. I’m talking about people suspending their humanity and acting on knee-jerk instinct.

Trump’s acolytes bestow the kind of adulation on their idol that Jesus Christ didn’t even demand for himself. As he put it, “And whosoever speaketh a word against the Son of man, it shall be forgiven him: but whosoever speaketh against the Holy Ghost, it shall not be forgiven him, neither in this world, neither in the world to come.”

In the eyes of his supporters, Trump is entitled to the same protection against criticism as that enjoyed by the Holy Ghost but not by Christ himself. And they defend that position with the ardour of zealots worshipping a secular cult.

Any criticism of a Trump policy, even if amply supported with facts and reasoned arguments, is rejected out of hand. There is no disagreement with Trump; there is only heresy. Everything Trump does is God’s gift to mankind simply because Trump does it.

This upsets me, even though I can reiterate that I wholeheartedly support most of Trump’s initiatives. But by cultivating this kind of animalistic following he risks undoing everything good he may try to do.

Someone demanding and encouraging such a response will eventually believe his own infallibility, even if he didn’t start out with that arrogant conviction, which Trump might have done. And the leader of any great nation, whatever its politics, depends on wise and, if need be, critical counsel.

Someone with Trump’s obvious character flaws, of which narcissism takes pride of place, is likely to ignore criticism and get rid of those brazen enough to offer it. That may lead him to gross errors of judgement, to which none of us sinners is ever immune.

As for those who worship and hate him with equal uncritical passion, they relinquish the advantage of being human, a moral and cerebral agent possessing and keeping up his own individual account with truth. That upsets me because I’m a closet humanist who believes we are all supposed to be made in a certain image and likeness.

How to understand Labour

In a word, you can’t. Not if you proceed from any rational criteria or such outdated notions as sound economics or democratic choice.

If you still stubbornly cling to those obsolete ideas, you’ll never understand why Labour is visibly pushing Britain towards customs union with the EU and, eventually and inexorably, some sort of sub-membership.

A customs union is a time-dishonoured trick for dragging countries into a single superstate. It was first used and refined by Prussia in the 19th century, when the lesser German principalities were either seduced or coerced to enter the Zollverein.

That was sold as a customs union, just as the EEC was sold as merely a way to realise economies of scale by close cooperation among European countries. In both cases, that was a lie. The real purpose was political, to create, respectively, a single pan-Germanic state and a federal European superstate.

Considering that we already have a free trade agreement with the EU, there seems to be no conceivable economic reason to relinquish the sovereignty won, and since then abused, by Brexit. But I did tell you Labour isn’t about the economy.

It’s about Marxist longings that include the urge to exact revenge on the upper classes and an equally powerful craving to create a single, communist world state. As The Communist Manifesto says, “working men have no country”, which commandment gave rise to a particularly vile form of internationalism.

If you wonder about precise definitions, don’t. For Marxists, such as Starmer and his gang, words mean whatever they want them to mean at any given moment. Thus, their current definition of the upper classes includes even people at the lower end of middle-class incomes, while their ‘working people’ are what used to be called lumpen proletariat.

As typical Marxists, they disregard the wishes of the very demos in whose name they supposedly govern. Britons voted for Brexit in greater numbers than they had ever voted for anything else, and most did so out of their dislike of uncontrolled immigration.

The previous Tory governments were socialist too, but they weren’t Marxist. That’s why they went through the motions of trying to keep those criminal cross-Channel boats at bay, a pretence that Labour has since abandoned.

Whatever loose controls the Tories tried to impose have fallen by the wayside, and one understands why. Swarms of cultural aliens landing on our shores inflict damage on traditional Britishness, something Marxism loathes. They also swell the welfare rolls, which serves the dual purpose of beggaring the economy (aka ‘the rich’) and bringing more people under state control.

Edging closer to Europe won’t make our trade with the EU any freer, but it’s practically guaranteed to scupper any chance of a trade deal with the US. Say what you will about Trump, but he detests Marxism and surely he can see through its crypto variety favoured by Labour.

He also hates the EU and was a great fan of Brexit (I detect a causal relationship there). Moreover, he likes to be known as an Anglophile, a passion he evinces mainly by his affection for Scottish golf courses and the royal family.

That’s why Britain has so far not figured among the targets for the tariffs Trump has imposed already or plans to do so shortly. But ‘so far’ are the operative words. If Trump detects that the Starmer government is acting in character by indulging its Marxist instincts and edging closer to the EU, he may – almost definitely will – slap the same tariffs on Britain.

Even if he doesn’t, we can kiss any hope of a trade deal with the US good-bye. That grim prospect becomes even more real when Starmer reiterates his reluctance to raise our defence spending beyond its current suicidal level.

However, whatever happens, it’s wrong to regard the Labour government as a failure. I looked up ‘success’ in the dictionary and found out it means “the accomplishment of an aim or purpose”. Since, unlike Marxists, we use words in their proper meaning, we must declare Starmer’s government a rip-roaring success.

They are doing exactly what they set out to do: turn Britain into a fully, as opposed to quasi-, socialist country, run by a Marxist nomenklatura, whose “aim or purpose” is to shove its perverse dogma down the people’s collective throat. If the people become impoverished as a result, so much the better.

After all, Marxists proclaim their undying affection for the downtrodden. Hence it stands to reason, their kind of reason that is, that they must increase the number of the downtrodden. This is a task socialists of every kind accomplish with invariable elan, making them a success on their own terms.

Take it from someone who had to study eight compulsory Marxist disciplines at university, the only way to understand Labour is to assess it by Marxist criteria. This isn’t to say that they too had to scrutinise recondite communist texts at university (those of them who, unlike our Deputy Prime Minister, actually went to one).

In all likelihood they never advanced past incendiary leaflets or, in extremis, The Communist Manifesto. Yet the way they’ve lived their lives, the company they’ve kept, the papers they’ve read, the meetings they’ve attended have all conspired to inject Marxist toxins directly into their viscera, bypassing any rational cognition.

Brace yourself for the worst: it hasn’t yet come. But any student of Marxism knows it will.

There are three genders, not two

For want of the right word, a battle may be lost. And this is a battle President Trump has engaged, with the few sane people still around hoping he’ll win.

Mr Trump has commendably ordered federal employees to remove their pronouns from their e-mail signatures, firing another salvo at DEI insanity. I often describe it as such, but keeping in mind that there is a subversive method in that madness.

The woke Lefties know that the path to their autocracy lies through glossocracy, controlling people’s minds by controlling their language. To continue the military analogy, words are the units taking part in that battle, and surrendering even one of them weakens the position of righteousness.

Trump seems to understand that, and hence his order. But his troops still ceded his positions by allowing the woke Left to run away with one key word. U.S. Rep. Marjorie Taylor Greene unwittingly highlighted that retreat by displaying a sign outside her office, saying: ‘There are TWO genders: MALE & FEMALE “Trust the science!” ‘

The quotation marks around “Trust the science” can mean only two things in a world governed by proper usage. Either the phrase is a direct quote from a recognised source, which it isn’t, or Mrs Greene means one shouldn’t trust the science, which she doesn’t. Using quotation marks to add emphasis is as illiterate as it is, alas, widespread.

I wonder if Republicans have decided they owe it to their leader to support his cavalier disregard for proper syntax, but this is a separate matter. What concerns me here is that the sign is wrong on a more fundamental level.

Let me just give you what I consider the proper version and you’ll know what I’m driving at. The sign should read either “There are two sexes: male and female. Trust the science!” or “There are three genders: masculine, feminine and neuter. Trust the grammar!”

Know what I mean? Gender is a grammatical, not biological, category. Pronouns have genders, three of them; people have sexes, two in number.

The Left started the corruption of the term to add a dimension of self-identification and to downplay the ironclad biological distinction Mrs Greene has in mind. Yes, they say, biologically speaking there may be only two sexes, male and female, but that doesn’t matter one jot. What’s important is how a person identifies, which ‘gender’ ‘they’ (never he or she) chooses.

Letting the adversary corrupt language in this fashion is tantamount to ceding a vital position. That’s how battles get lost, and then wars.

Trump’s next executive order should be a ban on the use of the word ‘gender’ in that subversive meaning. But the marching order he has already issued is something all decent people should applaud.

But, unlike Trump’s declaration of war on wokery, his readiness to start a trade war is ill-considered. But not in every respect.

He is about to slap 25 per cent tariffs on Canada and Mexico, along with a 10 per cent levy on China. Also, he “absolutely” promises to put tariffs on the EU which, Trump said, “has treated us so terribly”.

It’s wrong to pan these predictable announcements roundly. Tariffs may be imposed for good or bad reasons, and we should be able to know the difference.

As I understand the president, and he isn’t always easy to understand, the tariffs on those three countries are mainly punitive, with the transgressions committed by Canada and Mexico evidently seen as 2.5 times worse than those perpetrated by China.

Trump wants to punish America’s northern and southern neighbours for failing to control the flow of illegal migrants and illicit drugs across the border. If so, though its effectiveness remains to be seen, the punishment is just.

The same goes for tariffs on China, whose global economic conduct is appalling. Any step taken to slow down China’s quest for strategic supremacy should be welcomed, even if it comes at a price.

The EU is about to be penalised for mistreating the US, though Trump didn’t specify exactly which offences he means. That doesn’t really matter: the EU mistreats everything and everyone it comes in contact with, and in any number of ways, take your pick.

If Trump indeed plans to impose tariffs on America’s largest trade partners for punitive and strategic reasons, he’ll find no disagreement in these quarters. But he genuinely seems to think that the US will also derive an economic benefit, and there I think he is wrong.

“We’re going to put tariffs on chips. We’re going to put tariffs on oil and gas. That will happen fairly soon, think around the 18th of February, and we’re going to put a lot of tariffs on steel,” Trump said.

“Tariffs don’t cause inflation. They cause success,” he added, conceding, however, that there could be “temporary, short term disruption”. “But the tariffs are going to make us very rich and very strong,” he said.

The statement about inflation and success is simply wrong, as any economist will confirm. In his first term, Trump provided direct proof of this when he slapped tariffs on steel. As a result, he protected some 3,000 jobs in the US steel industry – while causing the collateral damage of about 70,000 job losses in industries dependent on steel.

America may get away with levying tariffs on oil and gas, considering that her own hydrocarbon industries are in rude health. Her economy may suffer if foreign producers retaliate in kind, but in general energy autarky is a distinct and good prospect for the US economy. That’s more than one can say for her other industries.

Imposing tariffs on chips, for example, is cloud cuckoo land, considering that 68 per cent of the world’s chips, and over 90 per cent of the most advanced ones, come from Taiwan – and most of the rest from China.

Tariffs will make chips more expensive, driving up the price of all products that use them, which nowadays is to say just about all products. When it takes more money to chase the same volume of goods, inflation ensues – this is plain common sense and the ABC of economics.

One wonders what they taught young Donald at Wharton, but whatever it was it certainly wasn’t that “tariffs cause success”. The disruption they’ll produce may indeed be “temporary, short-term”, but only if Trump stops them after a while. Otherwise they’ll cause lasting damage.

Trump does come both rough and smooth, and his bag of goodies is very much mixed. But on balance his first policies are at least interesting and mostly promising.

By contrast, our own government policies are a different mixed bag, delivering as they do both doom and gloom. There are things HMG can learn from the US president — but won’t.