Saturday, November 28, 2009

Government Based Upon Natural Law - (Part 8) - Foreign Trade, Foreign Relations, and Foreign Aid

"I saw that you could not separate the idea of commerce from the idea of war and peace. You could not have serious war anywhere in the world and expect commerce to go on as before. And I saw that wars were often caused by economic rivalry. I thereupon came to believe that if we could increase commercial exchanges among nations over lowered trade and tariff barriers and remove international obstacles to trade, we would go a long way toward eliminating war itself."

Cordell Hull, former Secretary of State, in his memoirs after observing two world wars

Foreign Relations

We should have cordial relations with all countries who act peacefully. No peaceful country ought to be afraid that the United States will ever attempt to conquer it or forcibly take away its natural resources.

To countries or groups that have ill intentions toward us, our firm message should be: It would be a grave mistake to attack us, because you will end up suffering more than we will. “Speak softly and carry a big stick” was not bad advice from Teddy Roosevelt.

We ought not to preach to other countries about how they should behave, or what their economic or political systems should be. This has frequently led to them resenting us, rather than appreciating our good intentions. The World Bank and the International Monetary Fund attempt to do this, and we should have nothing to do with them.

Rather, we should be humble and set a good example for other countries to follow. What this means politically is that our government should protect our right to be free to live our lives as we deem best, as long as we don’t interfere with the right of others to do the same. What this means individually is that each of us ought to love our Creator and love others, by treating others as children of our Creator, and by using our talents to help make the world a better place.

As mentioned in a previous part, we should not have our military stationed in any other countries, unless we are at war. This has created enmity and dependency, as well costing taxpayers a great deal of money. It may help to create temporary stability in a given region, but is this truly our business?

Foreign Trade

Allow free trade with all nations. Free trade, not aid, is the best way to help other nations to become more prosperous.

Benjamin Franklin said, “No nation was ever ruined by trade.”

George Washington, the Father of our nation said, “The great rule of conduct for us in regard to foreign nations is in extending our commercial relations, and to have with them as little political connection as possible.”

And Jefferson said, “Peace, commerce, and honest friendship with all nations but entangling alliances with none.”

It would be well to heed these three of the most influential men in the history of our country.

Furthermore, free trade with foreign nations possibly offers one of the best solutions to avoiding war. We went to war with Japan over 60 years ago. Within a few decades, we were buying a great deal of goods from Japan, who then became dependent on trade with us. Do you think that they would consider going to war with us now, even if they thought they could win?

Similarly, China’s economy is closely tied to ours, and they are very desirous of us having a robust economy, so that theirs can thrive. Thus, the more trade we have with other countries, the more we reduce the risk of war with them, and the more prosperous they and we become. It is truly a win-win scenario.

Also, there is no reason to not have trade with Cuba. Cuba has not threatened the United States since the Cuban Missile Crisis in the 1960s. We may not like some of their domestic policies, but that is none of our business. Cubans and Americans would benefit from trade between our nations.

Trade protectionism does not have a history of working well for our country. For instance, in 1930, the year after the stock-market crash, the Smoot-Hawley Tariff Act imposed an effective tax rate of 60% on more than 3,200 products and materials imported into the U.S., quadrupling previous tariff rates. Although the tariff act was passed after the stock-market crash of 1929, many economic historians consider the political discussion leading up to the passing of the act as a factor in causing the crash and/or the recession that began in late 1929, and its eventual passage as a factor in deepening the Great Depression. Unemployment was at 7.8% in 1930 when the Smoot-Hawley tariff was passed, but it jumped to 16.3% in 1931, 24.9% in 1932, and 25.1% in 1933.

Another important point is that when people of good will trade with each other, they naturally get to know each other. And they frequently find out that these “foreigners” usually have the same values that we do. For instance, they also want the best for their families and for their country. So free trade has the side effect of producing friendships that might not normally be made.

However, free trade cannot occur if countries subsidize their industries. For instance, the U.S. subsidizes farming (often run by large corporations and often at the behest of a strong Farm Lobby), which makes it harder for poor nations to export food to us, leaving them and us poorer. It has been proven that there is always a net benefit when we are allowed to buy and trade with those who make the best product for the best price, wherever they happen to be in the world. And the best way to make this happen is to allow individuals and companies to buy or trade with whomever they wish. This is not a guarantee, but there is no better way to achieve prosperity for all humans. Beside, freedom is the American way.

Congress can and should restrict the trade of goods or services that could harm national security, such as the sale of weaponry to countries that are hostile to us. Also, any imported goods would have to meet the same health and safety standards as domestically made items. For instance, any cars we import must meet the same standards as domestically made cars. Inspections of such goods, which should be made by our government, should be paid for by the company who is selling them. Otherwise, Congress should not restrict trade with other countries.

Developing countries are welcome to ask foreign companies, such as those in the U.S. and elsewhere, to start companies in their country. This may benefit the developing country by attracting the talent and resources needed in order to grow economically. Of course, this would always be up to the home country.

Foreign Aid

The U.S. ought not to subsidize other nations, or provide continuous foreign aid to any nation. However, the U.S. may provide temporary humanitarian aid to a nation or nations due to natural disasters or other such events.

Continual foreign aid contributes to corruption and to dependency. It also can create enmity toward our country in that other countries may wonder why their country is not getting any of our money. And, not infrequently, this money is used to purchase weapons, and buy power, rather than help the people for whom it is intended.

It may also prolong conflicts, as I believe it has done in the Middle East.

This is not meant to be a restriction on individuals or organizations, who may give time and money to whomever they wish (again with the restriction that no goods or services may be provided to individuals, groups, or countries that could harm our national security.) ______________________________________

Tim Farage is a Senior Lecturer in the Computer Science Department at The University of Texas at Dallas. You are welcome to comment upon this blog entry and/or to contact him at


Anonymous said...

Don't you think the Israeli lobby would loudly complain about stopping our aid to Israel?

Tim Farage said...

Yes, and so would all the countries who currently receive aid from us. But my purpose in this blog is to not be concerned about who would or wouldn't complain about a particular policy. Rather, it is to present the best policies that I can think of.

Tim Farage said...

I've added a quote from Cordell Hull, a former Secretary of State, at the beginning of this entry. He also concluded that foreign trade would reduce the chances of countries going to war.

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