On Trump Tariffs, McKinley, and Closing Society
With collapsing stock markets, retirement portfolios, and consumer confidence, there is an all-too-human tendency to focus on the economic effects of tariffs by their critics: they are a tax on consumption, they will raise inflation, reduce efficiency, and reduce take-home income, etc. This is familiar.
But this mistakes the full significance of a tariff-centric public policy. First and foremost, tariffs are an exercise in political agency. They are an assertion of political control by the executive branch. And, in fact, political decisionism is (recall here; here; and here) a core commitment of the so-called ‘unitary executive theory,’ which I prefer to call (with a nod (recall) to Benjamin Constant) ‘Bonapartism.’ According to it the will of the American people generates a presidential mandate to take charge. If you have a certain conspiratorial sensibility this is a control over ‘Globalists’ or the ‘Woke;’ a certain progressive-democratic sensibility this is the exercise of control over ‘the economy.’ For Bonapartists it’s control over the ‘deep state,’ which turn out to be code for ordinary ‘civil servants and scientists with at-will employment, sanctity of contracts be damned.’
From my own, more (skeptical) liberal perspective tariffs are an expression of mistrust against individuals’ judgments; they limit and even deny us our ability to shape our lives with our meaningful associates as we see fit. And tariffs do so, in part, by changing the pattern of costs on us, and, in part, by altering the political landscape in favor of the well-connected few. Of course, in practice, tariffs are always hugely regressive by raising costs on consumer products. This is, in fact, a familiar effect of mercantilism and has been a rallying cry for liberals since Adam Smith and the Corn league. Tariffs are also regressive as tax instruments displacing the income tax.
That is, some of the most insidious and dangerous effects of tariffs are evidently political in character. They create monopoly profits for the connected few, who can, thereby, entrench themselves against competitors, regulators, and consumers. It is well known that once a tariff is entrenched it is incredibly difficult to remove. They create permanent temptations to bribe the executive and those with access to him. Watch for stories about import-quotas, tariff holidays, and ad hoc tariff exemptions to appear in the press and subsequent policy.
Tariffs generate incentives for smugglers and in order to catch them we end up with additional policing and militarizing of the border and the economy on behalf of those who profit from selling the government equipment and services and those who desire a scared workforce. Industries protected behind tariff walls cheer on customs/police raids. For, as Jacob T. Levy predicted, the subsequent effect is terror and the collapse of due process against purported criminals, smugglers, refugees, and people who hold the wrong opinions and the unapproved gender. This is a far more likely outcome than the re-industrialization of America.
A certain kind of ‘class-based progressive’ and a certain kind of ‘moderate’ urges us to understand the rise of Trump as a predictable and justifiable backlash (Liam Kofi Bright has a good piece on this). And the implication is always an abandonment of the unpopular vulnerable (at least ‘temporarily’). Once these need no defending, we’re told, then the true victory (with purportedly homogeneous steelworkers, soccer mums, etc.) is possible.
But this diagnosis gets it backwards. Mercantilism is never just about the balance of trade. It’s always and everywhere an attempt to direct state violence against those who wish to shape their own lives unguided by the superior wisdom of the nation, the people, or race. Policing the border means control over romance, marriage, friendship, and gender, that is our most meaningful choices; it is an attempt to control who plays with who and who learns from who. Free trade and free meaningful control over one’s life are the same side of the coin.
Cheap products and high purchasing power leave room for emancipatory projects. Tariffs are not just taxes on consumers, they are also simultaneously hidden subsidies to the favored few whose life choices are privileged and recognized by the executive power.+ Anyone who has reflected on contemporary Singapore and China knows that ‘liberalism-a-la-carte’ is genuinely possible. But it doesn’t mean there is no internal political logic to mercantile-Bonapartism; there is, and it is always zero-sum.
Among certain commentators it is conventional wisdom that the Trump Administration is increasing uncertainty by acting inexplicably on a whim (see here, for example,
) or pursuing economic incoherence (see here, for example, Neville Morley). [HT Chris Brooke.] And while I am happy to admit that the process that leads to any of the Trump administration’s decisions seems (ahh) haphazard at best, I do see in it, as regular readers know, a reasonably coherent worldview that combines Bonapartism with Mercantilism. (And for the historically judicious among you: I have about the same view of the continental system as I have of the Trump tariffs.)Political and economic uncertainty is generally a self-reinforcing process. To undo it more and more actions by the executive are demanded by a scared public manipulated by profit-seeking adventurers. It’s entirely predictable we’ll see the rise of a system of selective subsidies and cartels as Trump Tariffs are entrenched.
The commentariat is suddenly full of knowing nods to William McKinley and his tariffs. President Trump himself is known to refer to him. And, yet, there is a tempting mistake to treat tariffs as evidence of isolationism. McKinley was no isolationist.* McKinley’s was the American imperialist presidency annexing Hawaii, and after the war with Spain annexing Puerto Rico, Guam, the Philippines, and American Samoa as well as control of Cuba. That President Trump admires President McKinley and envisions annexation of Canada, Greenland, Panama, and even Gaza fits the worldview.
The party of peace and prosperity is mortally threatened by the Trump Tariffs, which will accelerate the re-alignment of alliances at home and abroad. In a zero-sum world, ruled by fear, declining expectations, and uncertainty induced mistrust, it pays, alas, to use the flag as a cover for one’s greed.** If the Tariffs stick, we should expect the revival of opportunistic and accidental wars on behalf of aggrieved oligarchs with media interests.
The main effect, thus, of Trump tariffs is to make politics more important.** And as awareness grows of what is at stake, we can expect the public to welcome courageous politicians as focal points in rallying hostility toward the closing society.
+In practice, they also become explicit subsidies in order to buy off some of the losers of a tariff policy.
*It’s beyond my competence to speak about McKinley’s attitude toward the rise of and entrenchment Jim Crow, but I very much doubt he was a strong opponent of it.
**This is why I admire ‘Hands Off’ as slogan. It conveys accurately that this is a battle over freedom, over who gets ownership over one’s body and one’s agency; it’s a battle over the character of the federal government; it’s a battle against manifest grifters who loot the public purse.
Bravo!