A Splendid Little Trade War

By John Tulac

Teddy Roosevelt referred to the Spanish American War of 1898 as a splendid little war.  It didn’t last long and it didn’t kill a whole lot of people.  It created the American Empire, even though the United States never considered its new holdings colonies or part of an empire.  Of course, war is hell, and war is not so splendid, if you are a casualty.

If you did not read my previous column, Better than Tariffs, Better than Sanctions, Better than Sex on the Beach, today’s column may not make a lot of sense.  Simply put, trade wars are bad for the world, bad for the United States and bad for you.  Despite the overwhelming consensus that protectionism is voodoo economics, the impulse to embrace protectionism runs deep.  Alexander Hamilton was a protectionist; his pamphlet on the need to protect infant industries is rubbish, even if set to rap music.

As a matter of national policy or international policy, protectionism is terrible.  However, it you absolutely believe in it, here is the perfect plan for you:

Start your own trade war.

It isn’t hard to do, and you can do it all by yourself.  First, understand that you are at the absolute center of your own global economy.  You use your purchasing power, large or small, to make purchases that impact incrementally what producers produce. Producers want to satisfy your demand.  Over time, supply adjusts to demand.

You may think you are small and don’t matter, but chaos theory, not just economics, predicts that your actions, however small, have a measurable effect when aggregated over time with other similar actions.  Think of the butterfly effect.  One butterfly fluttering above the jungle canopy has negligible impact on the local weather, but millions of butterflies collectively do.

I’m sure that, if you are old enough, you remember the horribly sung, but somewhat catchy jingle, “Look for the Union Label.”  The commercial ran for months on television encouraging people to not just buy American, but to only buy American products made by organized labor. We all know the declined state of unions today, but set that aside for the moment.  You can henceforth decide to only buy goods made in the good old United States of America.

You can write to the Chinese or the Japanese or the French or the German manufacturers to tell them that you decline to buy their washing machines or big screen televisions or whatever.  Be sure to tell them why and tell them whose products you will buy instead.

Of course, if the product you want isn’t made in the USA, you will have to do without or induce someone here to make it for you or even make it yourself.  By the way, the latter is very expensive.  A chicken sandwich entirely made by your own efforts of planting and harvesting crops to make the bread, lettuce, tomatoes, and condiments, and raising slaughtering and preparing the chicken will set you back $200.00 for the sandwich.  No economies of scale.  Or you can get an all-American chicken sandwich from the Colonel for about $5.00 bucks for the cluck.  You always have choices.

So have yourself a splendid little trade war now.  Just leave me out of it. War is hell.

 

John W. Tulac is an international business attorney practicing in Claremont, adjunct professor of law at University of La Verne College of Law (retired), and Lecturer Emeritus (retired) at Cal Poly Pomona.  He is peer recognized as preeminent in international business law and holds the highest ratings for competence and ethics from the Martindale Hubbell National Law Directory.