By Hunter Wallace
For those of you who are skeptical of “free trade,” check out Clyde Prestowitz’s The Betrayal of American Prosperity:
“Through the Defense Plant Corporation, the government financed more than 80 percent of the new plant construction and plant conversion by the auto, aircraft, and other companies for wartime production. Washington came to own 90 percent of the country’s synthetic rubber, aircraft, magnesium, and shipbuilding plants and facilities; 70 percent of the aluminium factories; half of the machine tool plants; and 3,800 miles of pipeline. By the end of the war, the RFC spent $37 billion that not only helped win the war but also stabilized the economy.
In 1940, to run the wartime economy, the White House established the Office of Production Management, which morphed into the War Production Board and the Board of Economic Warfare in 1942. The war created 17.5 million jobs in the United States as the board drove war production to reach more than 40 percent of GDP in 1943-44. For example, steel production in 1944 reached 80 million long tons, or more than two-thirds of total world production. The merchant marine expanded from 13 million to 40 million gross tons as 5,545 ships were built in American yards. By 1945, the United States had 60 percent of the world’s merchant tonnage. Having produced less tham 14,000 airplanes total in the twenty years before the war, the United States was turning out 96,000 per year by 1944. On top of this was the incredible R&D effort that led to the atomic bomb, the computer, dramatic advances in aeronautics including the jet airplane, and the development of penicillin and numerous other drugs and biological agents.
By the end of the war in 1945, after a century and a half of “catch-up,” of the American System of industrial policy, infrastructure policy, protectionism, and continuous government intervention in the economy to ecourage industrial development and direct war production, the United States emerged as an unprecedentedly powerful hegemonic colossus. It accounted for about half of global GDP, owned 70 percent of the world’s gold, had a monopoly on nuclear power, was the world’s leader in virtually every technology and every industry, owned the world’s main currency, was the world’s leading creditor to the tune of $3 billion, and had a trade or current account surplus of $5.8 billion. It had more than caught up. It was all alone in a realm no nation had ever before inhabited.
Then it took a new track.”
Libertarians would have us believe that “government” is anathema to economic development. In reality, the first 150 years of American history were more notable for government-business cooperation.
Just read this one chapter on British and American economic history. It covers the role of “government” in everything from the telegraph to the transcontinental railroad to the Erie Canal to the Panama Canal to the Hoover Dam to the steel industry to the merchant marine to the aerospace industry to nuclear power and computers.
Compare the economic trajectory of the United States and Great Britain from the 1840s to the 1940s – a century in which the US developed under the American System as an industrial policy, and Great Britain which practiced unilateral free trade in that time period.
That sounds like today’s government-business cooperation on immigration. How’s that working out for you?
If government is the backbone of economic prosperity, why did the economy of the Soviet Union fail? Why is Cuba poor? Why is North Korea poor but South Korea prosperous. Please discuss this strictly in economic terms.
OK, why is “libertarian” “free market” America wealthier than socialist, big government Great Britain
Why Britain is poorer than any US state, other than Mississippi
http://blogs.new.spectator.co.uk/2014/08/why-britain-is-poorer-than-any-us-state-other-than-mississippi/
“Compare the economic trajectory of the United States and Great Britain from the 1840s to the 1940s – a century in which the US developed under the American System as an industrial policy, and Great Britain which practiced unilateral free trade in that time period.”
Why would I do that, Mr. W.? What I care about is the right of each white man not to be forced to engage in exchange or donation. If you want to discuss economic trajectories or whatever it is you think you’re prattling about, do so with white men who are disposed to make free with energy of others. You’ll have no trouble finding some.
Therefore, America’s economic strength came at the expense of destroying Europe and killing millions of White people. Maybe we need to destroy Europe again in order to boost our sagging economy. Think of all the good jobs that can be created by producing products of death and killing White people.
First 150 years? That includes the Gilded Age. Do you want to bring that back?
In other words, libertarian economics.
We’re discussing how Great Britain declined under libertarian economics from the 1840s to the 1940s while its rivals, the United States and Germany, had an industrial policy which led them to eclipse Great Britain in wealth and power in the same time period.
We’re discussing the merits of economic nationalism vs. libertarian economics in Britain, the US, and Germany from 1840 to 1945. All of the above are White countries.
We’re discussing the US from George Washington to the Truman administration – that would include the Gilded Age and everything before and after it until the end of WW2.
LOL, no.
The US was already by far the wealthiest country in the world before WW2 and didn’t enter the war until Pearl Harbor in 1941. It was Great Britain that started WW2.
From the 1840s to the 1940s, the US and Germany eclipsed Great Britain – which was wedded to free market economics – as the richest and most powerful nations in the world. The balance of power in Europe had shifted so radically in favor of Germany by the early 20th century that British geopolitics snared the US into both WW1 and WW2.
Germany’s industrial development was based on the American model. The two countries had a lot in common. German superiority in rocketry and aerospace was due to close cooperation between the state and private sector.
The US is not wealthier than the EU which now has the largest economy in the world. Like Great Britain in 1940, the US is in decline viz all of its rivals like Europe, Japan, and China.
We’re discussing the United States and the merits of its traditional economic policies (a type of state-business cooperation), not communist countries like the Soviet Union, Cuba, North Korea, etc.
America’s current immigration policy is based on the same neoliberal nonsense that is reflected in the Washington consensus on trade policy.
“All of the above are White countries.”
Well–yes. You’ll have no trouble finding whites who are disposed to make free with energy of others. That’s what I said. Either I’m misunderstanding you, or you’re misunderstanding me.
The EU is the wealthiest, yes. But its not a State yet. The United States of Europe has yet to be created and most likely not any soon.
Look up the “Gleiwitz incident” for the exact start for WW2, btw.
For some strange reason, you seem to be identifying libertarian economics with White people. We haven’t practiced libertarian economics even in this country through the vast majority of our history.
“Therefore, America’s economic strength came at the expense of destroying Europe and killing millions of White people.” – America’s position was cemented before WW1. Our prosperity is not a result of ideology, but of having a virgin continent to exploit and the people capable of exploiting it(and not screwing each other over too much).
“From some strange reason, you seem to be identifying libertarian economics with White people. We haven’t practiced libertarian economics even in this country through the vast majority of our history.”
No, no: I’m saying the opposite. It’s almost impossible to get a typical white man to leave other whites alone–or to leave anyone alone.
Do you support the Louisiana Purchase? How about the annexation of California?
I think the Soviet Union is a valid comparison. The book cites governments role in building infrastructure, telecommunications, railways, aerospace, and other public works projects. The Soviet Union was involved in similar projects and yet its economy failed. The common denominator is government sponsored projects and yet the two economies yielded very different results. Therefore, how is it possible to attribute government funded projects as the main source of economic prosperity if one economy prospered while the other failed?
State-business cooperation leads to cronyism. State and business cooperated in 1913 and that gave us the income tax and the Federal Reserve. It’s no coincidence that they were enacted in the same year. The oligarchs and the bakers needed the income tax to ensure that the money lent by the banks to the FedGov via the Federal Reserve is repaid. Without the income tax, the Federal government would not have the revenue to repay the banks. This “state-business cooperation” allowed the banks to sink us into debt. The Federal Reserve prints currency and lends it to the FedGov at interest. The FedGov could print its own debt free currency without interest. There is no need by the general populace for the Federal Reserve. It exist only to enrich the oligarchs.
The current “state-business cooperation” is putting US workers on unemployment. Business desires cheap labor. The state and business are cooperating to bring people from other countries here to the US to do the work that Americans can already do. For those at the bottom of the wage scale, the government (Federal, state, and local) are subsidizing these people with tax payer funded schools, housing, food, and healthcare. Without these goodies, many of these people couldn’t afford to live here. On top of this, the FedGov is granting citizenship to these people’s children. Always remind yourself that what we are seeing isn’t an invasion. Foreigners have been invited here by the government.
If you are in favor of “state-business cooperation,” what are your thoughts on the F-35, a $1.5T boondoggle?
http://www.theatlantic.com/video/index/384088/the-pentagons-15-trillion-mistake/
1.) I don’t think it is a valid comparison.
Here’s why: the United States, Germany, and Japan all have a long history of state-business cooperation in industrial development. This is especially true of the aerospace industry. Obviously, there is a vast middle ground between Victorian Britain’s libertarian economics and North Korean state socialism.
2.) Among other things, economic nationalism in the form of state-business cooperation gave us the telegraph, the trans-continental railroad, the Erie Canal (which made New York City a major commercial center), the Panama Canal, the Hoover Dam, the interstate transportation system, the jet fighter, America’s merchant marine, the atom bomb, nuclear power, modern medicine, countless advances in agriculture at land grant state universities, rockets which put the first man on the moon, commercial satellites, and so on.
3.) America became the world’s biggest debtor nation during the present free trade era. The same thing happened to Britain which went into extreme debt to the United States under free trade and ultimately lost its empire and world leadership as a result. The current relationship between the US and China resembles the old relationship of dependency between the US and Britain with the US assuming the role of declining superpower.
Oops. “bakers” should be “bankers”
4.) Mass unemployment and wage stagnation are the fruits of our free trade policy. China practices economic nationalism. Where are the jobs going?
5.) Open borders is the universal prescription of neoliberal and libertarian economists.
6.) If we simply enforced our immigration laws, we could have the public schools, food, housing and healthcare, etc. Of course that would violate the sacrosanct “individual right” to illegally take up residence here.
7.) The federal government is wedded to neoliberalism -free trade and open borders are a symptom of that destructive ideology. Once upon a time, neoliberalism was rejected in the United States.
From the book:
“RCA and IBM provide good examples. Created by the government, as we have seen, specifically to beat British Marconi after World War I, RCA boomed as a military supplier during World War II, and again during the Korean and Cold Wars. It then turned the cathode ray tube and orthicon, developed in part with Pentagon funding, into the TV cameras and television sets with which it dominated consumer electronic markets for many years.
IBM was an even more significant case. In the 1950s more than half of its total electronic data processing revenue stemmed from government contracts for the B-52 bomber guidance system and Simulation Air and Ground Engagements (SAGE). Moreover, throughout the 1950s and early 1960s, well over half of IBM ‘s R&D expenses were paid for by the US government. It was on the basis of this government largesse that the company created its revolutionary System 360. Introduced in 1964n it represented a quantum leap forward in computing technology a played a vital role in making the computer indispensable to the corporate world. …
The truth is that in the 1950s and 60s virtually all firms in Silicon Valley were aided in some way by the US government. The National Science Foundation had been established in 1948, and either it or NASA or the Pentagon or the CIA were involved in development of technologies that led to the relational database, the computer mouse, the Apple Macintosh, Microsoft Windows, the Sun Microsystems workstation, the flat panel display, and, perhaps most important, the internet, which began life as the Arpanet, the network of the Defense Department’s Advanced Research Projects Agency (ARPA, also known as DARPA).”
So, in addition to rockets, commercial satellites, jet fighters (virtually all of aerospace). the atom bomb, and nuclear power, the evil “government” played a major role in creating the computer, the television, and the internet too. Drones are another spinoff of military spending.
“Do you support the Louisiana Purchase? How about the annexation of California?”
I regard acquisition of territory as an act of governance, so, yes, I “support” those things insofar as I know anything about them. Maybe they have aspects I would not support, if I knew the details.
Since you keep referring to some parties’ supposed antipathy toward “government” (your quotation marks), I’ll clarify: I personally am not objecting to government. I expect the government to inhibit predation, parasitism, anyone’s making free with the energy of others. I expect government to inhibit, for example, theft, assault, trespass, and murder. Forcing persons to engage in exchange or donation is the exact opposite of that, no matter how many “voters” want it.
When the government is White and governs for White interests, it can work constructively for the prosperity of all. It fails when it views Whites as a resource to be mined.
The Soviet Union also funded many government projects, including aerospace, satellites, military R&D and infrastructure. Why did their economy fail? Why did it not produced the same level of goods and services as in the US?
By the way, as far government entirely funding aerospace, how on earth did the Wright Brothers invent the airplane entirely through private investment.
As a side note, I’ve noticed that Hunter has become the foremost defender of the Federal government and there is little discussion here about Southern Nationalism. I sense a shift in the winds.
Here’s where I’m at on this.
I don’t get too hung up on ideology anymore, if I ever really did. I don’t think any one abstract ideology should ever get 100% of the credit for something going right, or 100% of the blame for something going wrong. Usually, when something goes right of this magnitude, there are a lot of things that deserve credit, and when something of a similar magnitude fails, there are a lot of things that deserve blame.
1.) The Soviets were the second country to detonate an atomic bomb, the first to launch a satellite into earth orbit, the first to send a man into space.
We forget that the Soviets were winning the Space Race for a number of years and America’s answer – NASA – is the epitome of state-business cooperation in industrial development and R&D. Let’s not forget the Germans were ahead of both the Americans and Soviets in aerospace until they lost the Second World War. The free market didn’t put a man on the moon or explore the solar system.
Even today, Americans ride to space on Russian rockets. Russia is still today one of the leading countries in aerospace and space exploration.
2.) It certainly isn’t because of the superiority of American laissez-fare – as I pointed out above, most of the major technological advances of the last 60 years have been state-business spinoffs of military spending. The television, computer, nuclear power, the internet, etc.
Ultimately, the American state outspent the Russians in military spending. The Soviet economy was too geared toward military spending and failed to provide the consumer goods that ordinary Russians wanted. When they tried to reform the system in the 1980s, it toppled under its own weight. Most Russians look back on that era as better though than the chaos that followed under Yelstin.
3.) The Wright Brothers invented the airplane, but the Germans quickly became dominant in aerospace until the end of World War II. Similarly, the television was invented in the United States, but Japan became dominant in consumer electronics due to American neglect.
You can go even further back. The Chinese invented gunpowder, but didn’t make use of it in the same way as the West.
Quite the contrary.
We’re discussing the merits of economic nationalism vs. libertarian economics. Aside from Britain in WW2, which was starving and cut off from American agricultural and manufactured goods by German U-boats until the US rode to the rescue – thanks to a hundred years of being weakened and made dependent by free trade – there is no better example of the failure of libertarian economics than the Confederacy.
The defeat of the Confederacy is the ultimate example of the flaws of libertarian economcs. Southern economic orthodoxy held that internal improvements, manufacturing industries, and commercial development were all anathema to the superiority of the free market.
And the result?
1.) The North strangled the Confederacy with its naval blockade of the Southern coasts.
2.) Northern superiority in railroads rapidly brought its troops to the front. Meanwhile, Southern railroads fell apart mainly because so many vital parts had been made in Northern factories before the war.
3.) The North had a massive advantage in manufacturing and population due to industrial policy. What industry there was in the South was largely due to antebellum military spending.
All the South had was cotton and bravery and the former was useless because it sat there while the textile mills were also located in the North. We couldn’t defend our coasts. We couldn’t feed, clothe or adequately transport our brave troops when the war came because of the economic backwardness that laissez-fare doctrine had created lost the war.
Had it not been for the US and USSR entering the war, Hitler would have defeated England in the same way.
Granted, the Confederacy tried to close the gap with the Union in all these things – shipping, manufacturing, textiles, railroads – but by the time the war came it was too little, too late to start from scratch.
A weak national government with a laissez-faire economy was a short lived disaster. It just couldn’t work in such close proximity to an emerging industrial colossus. We might have a far better shot today though because the Rust Belt has been so devastated and weakened by half a century of laissez-faire economics.
Re: Bonaccorsi
Here in Alabama, the ground I am standing on was seized by force from the Creek Indians. Much of the rest of Alabama was taken from the Creeks during the War of 1812. It was the government that turned the land over to White settlers. Ditto with the Cherokee in Georgia.
Directly to the south of me, Florida was sold to the United States by Spain because of Andrew Jackson’s invasions of Spanish territory. Spain relented and succumbed to the inevitable loss of Florida due to the use of force by the US military.
As for trespassing, large parts of Alabama and Georgia were taken by White settlers trespassing on Indian land, not to mention Florida, Texas and California from Spain and Mexico. The whole Southwest was taken from Mexico. The whole Northwest was gained from Britain due to America’s willingness to fight over it. The Great Plains was seized from Indians.
If the US had been established in accordance with libertarian doctrines, would it even exist today?
“Here in Alabama etc.”
You’re talking about conquest, Mr. W. I have no objection to conquest. That’s something different from the dealings among persons within a polity.
“We’re discussing the merits of economic nationalism vs. libertarian economics.”
No–that’s what you are discussing. What I’ve been saying is that I have no interest in such a discussion, just as I would have no interest in a discussion of the merits of free speech v. censorship.
Are you yourself interested in such a discussion–of free speech v. censorship? Suppose someone were to argue that the United States would be better without the First Amendment. Suppose someone were to argue that, without freedom of speech, the U.S. would have a better “economic trajectory,” or richer “political discourse,” or some such thing. Would you think, “Oh, yes–let’s discuss that. Let’s consider eliminating the First Amendment. Let’s ask whether the Congress should be allowed to outlaw any speech it wants to–the Occidental Dissent website, for example. Maybe that’s how it should be: Disburdened of the First Amendment, we’ll be able to listen, each election cycle, to candidates’ arguments, whether Occidental Dissent should be outlawed. It’ll be like Obamacare. Anyone who can cobble together a majority–50-percent-plus-one of the votes–for a Presidential candidate who wants to outlaw Occidental Dissent will soon be delighting in news footage, of the President’s signing the anti-Occidental-Dissent bill into law, in the White House Rose Garden.”
Do you have an interest in such a discussion, Mr. W.? No? What’s wrong with you? Are you some kind of “libertarian,” hostile to “government”?
Umm no.
I haven’t said anything about the First Amendment. It coexisted just fine with a national economic development strategy for the first 150 years of American history. We don’t have to choose between one or the other.
As for free speech, that’s a separate issue. There are real problems with the First Amendment. I wasn’t aware you were a fan of Jewish influence in the media. Should Jews have a First Amendment right to poison our culture or should they be removed from positions of influence in culturally sensitive areas like they were in Germany?
“I haven’t said anything about the First Amendment.”
I know that.
“It coexisted just fine with a national economic development strategy for the first 150 years of American history.”
I know that, too.
“We don’t have to choose between one or the other.”
Yes, I know that, too. I’m not saying we have to choose between one or the other. I’m saying I regard the “right not to spend” exactly as I regard the right not to be silenced, so-called freedom of speech. I expect a ruler of whites to guarantee both of those things. I expect him or her to say, in effect: “I will silence none of you, no matter how many of you might want me to silence some one or the other or any number of you. Don’t expect me to be holding a vote about who should be silenced, because–to say it once more: I will be silencing NONE OF YOU.”
Why do I expect a ruler to say that? Is it because, say, I think everyone profits from the free exchange of ideas? No. I have no idea whether everyone profits from the free exchange of ideas. The reason I expect the ruler to silence no person is that I think a person should be permitted to say what he wants to say.
It’s the same with expenditure. I expect a ruler of whites to guarantee that every person under his rule will be free NOT TO SPEND. As I said in another thread here, at Occidental Dissent, that doesn’t mean I object to taxation–for governance (the military, the courts, the police, possibly infrastructure that can’t be arranged as private property). I object to exchange or donation that is forced (or “effectively forced,” as when a minimum wage is established for a service). I expect a ruler of whites to say, “I will be forcing none of you to engage in exchange or donation, no matter how many of you might want me to force any or even all of you to engage in those things. We’re not going to be voting whether there should be government-run schools, or government-run pension funds, or government-run medical insurance. Those are out of the question.”
As for the Jews, well, yes, my view that they should not be living among whites is inconsistent with the above. Their anti-white activity to which I object is almost entirely in the form of speech. That’s the way it is. Having observed the Jews, I’ve concluded, yes, they are a presence inimical to my people’s well-being, even if they’re not stealing from them or assaulting them. Almost solely because of their speech, I want them out, as much as I would want, say, coyotes out a playground.
1.) If we were to use authoritarian means to strip Jews of citizenship or violate their individual rights and property rights in order to reduce or eliminate their negative influence on our culture, it would flagrantly violate your ideal of a classical liberal constitutional government. Then again, it might be necessary to bend the rules in an emergency situation.
2.) I would support a far more robust national government and a policy of economic nationalism. I would also support neutralizing class conflict in order to eliminate that source of division in our society.
In my view, libertarian economics leads to extreme class division and leftwing political agitation – an open sore on the social fabric. Aside from that, I don’t believe laissez-faire economics is superior to a mixed economy with a more robust state and can point to any number of examples as to why I believe this is so.
“If we were to use authoritarian means to strip Jews of citizenship or violate their individual rights and property rights in order to reduce or elimiante their negative influence on our culture, it would flagrantly violate your ideal of a classical liberal constitutional government.”
Yes. I pretty much just said that.
“In my view, libertarian economics leads to extreme class division and leftwing political agitation – an open sore on the social fabric. Aside from that, I don’t believe laissez-faire economics is superior to a mixed economy with a more robust state and can point to any number of examples as to why I believe this is so.”
Each of us has stated his position pretty clearly, I think. Maybe we’ll take the question up again at some point. For the moment: I’ve enjoyed our exchange.
It might be better to think of the Soviet Union development model as all-in whereas the US and German model were opt-in. You didn’t have to cooperate with the US and German economic development with the Gov. In the Soviet Union you had no choice. There was no other economic path. This distorted the information feedback related to what goods needed to produce and how many.
Targeted help for existing industries or help to reach technological milestones for industry are different than a determination of what the “targets” are “for” these industries.
There’s a very good book that explains Japan’s and China’s economic model and compares it to the US model. “Blindside: Why Japan Is still on Track to Overtake the U. S. Bythe Year 2000″by Eamonn Fingleton
It didn’t happen all together as he said but Japan punches very high compared to it’s weight. The Japanese started low balling their statistics after the criticism of the 80’s so the US would not have trade sanctions on them. Their growth seems to not be very high but if you look at the growth in elderly and people not in the economy and compare it to GDP they look a LOT better. They have a shrinking work force and still have growth. We have neither. One of the ways they do this is by gov. targeted growth in high capital and high technology products. These have a natural monopoly. Not everyone can immediately switch to making semiconductors, flat screen TV’s and other high tech goods. We concentrate on sending China and Japan scrap steel and paper.
You can argue this socialism crap until the cows come home, America’s greatest industrial growth came from about 1870 until the depression of the 1930’s, and it came with high tariffs, not this ‘free trade’ bullshit.
All you have to do is drive through the ruins of Detroit for an hour and that would tell you all you need to know about ‘free trade’, and a lot of other things.
Good comments.
“The war created 17.5 million jobs in the United States as the board drove war production to reach more than 40 percent of GDP in 1943-44.”
Yes, I know a woman who had one of those wartime jobs. The government was paying great money, as I understand it, and was asking from her almost nothing in return, just busy-work really–well, that and the blood of her brother who got shot to pieces in Normandy.
Hunter Wallace
‘Let’s not forget the Germans were ahead of both the Americans and Soviets in aerospace until they lost the Second World War.’
German scientists were a prized commodity in high demand after the war.
Reminds me of that famous Bob Hope quip on the space race.
Reflecting on the launching of Sputnik on October 4th, 1957, the comedian Bob Hope is reported to have remarked, “Their German scientists are just smarter than our German scientists.”