8 votes

Is PRISM an argument for Protectionism?

According to the fundamentalist dogma of free trade, nations have no interest in protecting or fostering the independence of their own firms and industries. Everything, it says, should be determined by the competitive process of the free market, without any regard for borders, national interests, the autonomy of essential industries, or any other factor.

Isn't PRISM and the Snowden leaks one more example of an instance where nations and political units do have a real, demonstrable interest in having at least some industries operating in their borders, under their law, and outside the dominance of some external political power?

People in other countries who desire to ensure the integrity and privacy of their communication networks have an interest in having domestic firms independent from the American government, regardless of what the market decides are the best firms in the industry (ISPs, social networks, search engines).

Google or Facebook may be the best at what they do, but because of political realities, it might be in the interest of other nations to foster a diversity of unprofitable or less profitable competitors that can operate outside of the United States.

While it is true that the market can also offer independent alternatives with security and independence of information, it offers no guarantee of their success. They might fail, in the market, to garner a profit or a wide user base. That is the nature of the market. It does not guarantee any outcome other than the success of the more profitable firms.

A nation might decide as a matter of public policy to promote alternatives to telecom behemoths that the market has crowned as the best, regardless of considerations of profit or loss. It can decide that there is a higher standard than market success and act to impose that standard.

The Broader Principle

The principle established by this example is that some priorities trump free market competition -- having certain industries outside the scope of control or pressure by a foreign government is just one instance.

If country A has certain standards of privacy of information, it needs to foster and protect companies in such industry without regard to market factors. The market -- the consumer -- will not necessarily value this priority, even if "the people" do actually and sincerely value it on the level of political consciousness. Not every value can be expressed economically, or be effected through the price system.

Sometimes the competitive forces in the market deny an outlet to political considerations. We compartmentalize politics and shopping in different mental spheres. This is the simple reality. We believe some things are to be determined on a political level, and that belief influences how we act.

How many of us stop eating chicken if we hear about the mistreatment of chickens on factory farms? How many of us investigate in detail the labor conditions in the distant places where the products we buy come from? There are serious practical and logistical problems in expecting the mass of consumers to make their shopping decisions on the basis of political concerns.

How Broadly Can the Principle Be Applied?

Once the principle is established that some priorities trump purely market determined outcomes, and that there are higher standards than the economic consideration of price and quality, than the whole terrain is opened up to other applications of the same principle.

For instance, if country A has certain standards it applies in the law in regard to pollution, waste disposal, or labor conditions, then isn't it appropriate to limit free trade to those countries and companies which also adhere to the same standards of behavior? Those who operate outside said standards can obviously make the same product at a lower cost, all else being equal, and so profit at the expense of those others who adhere to the common standards. They gain advantage by engaging in behaviors deemed harmful.

So why is the market verdict of better price/product a higher standard than that of the integrity of privacy, or the respect for some agreed upon human rights, or the moral issues of abuse of labor and abuse of the natural environment?

Would free trade trump all moral considerations, to the extent of endorsing trade with firms and countries that permit chattel slavery? The line clearly exists -- where is it drawn?

The Fundamental Question

What makes economic profit a higher standard and higher authority than other value judgments, as expressed through the law? Are there not things above the economic plane, which need to be decided on the political level?

Final judgements of value are subjective, and are above the market process. The market process is a means, and cannot decide ends. It can certainly have moral content and spring from moral principles. It can also spread habits of mind, manners and behavior that are morally beneficent.

Or, potentially, it can spread their opposites, and promote a negative leveling of culture to the lowest common denominator of consumer demand and profit. It can eliminate something essential like investigative journalism simply because it is hard to turn a profit from in comparison with other alternative uses of capital at media firms. The consumer does not demand investigative journalism, apparently.

The market is morally neutral, and whether it promotes a better or worse moral condition or level of culture is up to the judgement of each person. The market, as such, is a necessary institution based on the existence of private property, which is so rooted in human nature that it could never be truly eliminated. No political order with any wisdom would try to do so. But to what extent the market is allowed to decide the character of any given industry or civil institution is a political choice. Ultimate values are decided subjectively, and are not subordinate to the choice of the consumer.

To Round it Out with a Concrete Example

Suppose I am an Icelander. Does my right as an individual to purchase services from top companies like American ISPs trump my countries' interest in having ISPs operating outside the control and legal reach of American secret courts and NSA wiretaps?

What measures can a small European government like Iceland's legitimately take in order to ensure it has its own ISPs, supposing that the pure market outcome deems them unprofitable or inferior to American ISPs?

The same question can be asked in regard to firearms firms, and many other industries essential to a nation's ability to act independently from international bullies and snoops, and to defend itself in a last resort scenario.

So then, if it is legitimate for a nation, through its political and legal system, to prop up, subsidize, or protect x industry, or to tax, exclude, or otherwise handicap its competitors, then doesn't that principle extend to other areas? If so, how far? And why?

Can't citizens in country B decide that their industries, in adhering to certain conditions deemed moral or necessary, operate at a disadvantage to sweatshops or polluters outside their borders, and so deserve a level playing field via some legal restrictions on the competition of those outside the same set of standards?

Think of the principle in war, that signatories to the Geneva convention will be obligated to treat the uniformed prisoners of other signatories according to certain standards, which do not apply to non-uninformed, non signatories. If this principle applies in war, why not also in trade?

Red Herrings

Surely the constitution is no argument against protection, anymore than it is an argument for unrestricted movement of labor and populations across borders; America has engaged in protection for a variety of purposes, as well as immigration controls, since the founding.

Let's hear some good arguments, preferably ones that do not rely on blanket claims about the unlimited freedom of individuals to do whatever they want, whatever the cost to society, its laws and institutions.

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Anti-Protectionism gave us

Anti-Protectionism gave us Detroit bankruptcy and the lowest total number of jobs in the US since 1979. Virtually all consumer products manufacturing was removed from the country, especially starting with Bill Clinton's NAFTA. Large swaths of job categories are now eliminated from commercial viability in the US.

The missing "value", you talk around is "information"

The laissez faire market function relies on buyers and sellers exchanging information that is ACCURATE and TIMELY.

In a nutshell what you are saying is that google and verizon and ATT etc are selling an EXPECTATION of privacy for the price they charge.

The TRUTH is that they are charging a "privacy premium" based on that expectation BUT ARE NOT DELIVERING IT.

In other words, if people value privacy, then those companies are skimming rent for value not delivered.

In other words, you state that via "protectionist" means a nation can or should support a "less productive or profitable company." You're looking at it the wrong way. A local company could deliver privacy-invasive service for slightly less than the aforementioned companies OR could charge MORE for privacy enhanced service and it is NO LESS productive or does not need to be less profitable.

I don't think informed people

I don't think informed people (always a minority) had any expectation that giant US internet and telecom firms would refuse to submit to intel gathering in post 911 secret surveillance, or US court orders.

no more than there is any expectation that US banks and Fed members won't comply w/ govt demands to seize assets or freeze accounts.

the question raised in my post is whether other nations have a POLITICAL interest in developing firms independent of that scope of US control, in situations where the market and consumer does not or has not yet done so.

and if so, how far that principle applies in other directions.

i think clearly this is a case where extra-market means are necessary for creating desirable political outcomes that the market has not created. a case where practice refutes the over-reaching claims and pretensions of a theory.

in the entire series of replies and exchanges below, i have not seen the actual question once addressed directly without resort to evasion, misdirection, obfuscation and generalized hand waving.

Oh my...

Bill you are blowin' my mind!

FFS read Hazlitt already.

Protectionism hurts taxpayers and consumers to the benefit of business. It also makes business dependent and ultimately uncompetitive. What about the US auto industry is lost on you? It's like a cute little taco dog that can only survive with the largesse of it's owner, who provides that largesse by taking it from us.

The question isn't whether we should or should not help the American economy with protectionist policy.

The question is do we harm the economy with that policy or not. It is impossible for the government to do anything to help the economy in the long run. It can only do so in the short run, and only if you look at one sector and don't at the ones who suffer.

All a government has control over is endogenous factors. All it can do is shift resources within it's borders. This ultimately hurts everyone even the supposed beneficiaries.

I could go thru every moronic protectionist policy and demonstrate how it hurts the economy. But I can't do it better than Hazlitt, just go read him.

It's embarrassing for people in the liberty movement to be this ignorant. Go read Hazlitt.

this.. has... nothing.. to...

this.. has... nothing.. to... do... with... the... limited.. situations.. raised.. in.. OP... which.. are... political... in .. nature... and... not... economic.. arguments.

slow enough?

Lol you really just need to

Lol you really just need to read more and gasbag less.

You're OP begged the entire question of economics and it cannot be begged. You're OP assumes something demonstrably false, that even if it wanted to, which it does not, no government can possibly do anything positive the economy which it preys upon.

You're right about one thing. I'm wasting time talking to you. I can't do any better than Hazlitt, Rothbard, et al. H lays out the economics and R lays out the political implications.

In the liberty movement being economically and philosophically ignorant is really like being hungry in the middle of an apple orchard. You have no excuse. Nothing I could say on this matter hasn't been said far batter and it has nothing to do with self ownership or any of that.

You specifically asked for non simplistic answers. I could give them but I'd be repainting a Rembrandt. Anything anyone can say here will necessarily be simplistic. The full answer you know full well where it resides.

Avail yourself

Then come tell us how Hazlitt (Hayek or Mises or, for political analysis Rothbard or Hoppe) is wrong on some point. Then you will know enough to at least participate in the discussion.

I'll give you a clue though. Just as welfare weakens individuals, corporate welfare, which is all protectionism is, weakens business. It can do nothing else. This should be simple for you.

In addition the empire feeds on those businesses, which it has weakened. This is why empires fail. If empires could successfully strengthen firms they would and the source of capital for those empires would never flag.

you would just call me a liar

you would just call me a liar if i said i've read mises, hayek, rothbard, hoppe, and others at length. throwing the ball to other intellectuals is a cop out. and it assumes the person you're discussing with has not read their works. its basically an appeal to authority which says "either you haven't read my Guru or if you have and still have your own opinions, you're bad bad."

that is a drone mentality. are you a drone?

I'm not appealing to

I'm not appealing to authority. I'm appealing to your intelligence.

You care enough to wade into the lions den. Know what the lion says at least.

Protectionism is the easiest statist economic argument to pick apart there is. And yes you are making this argument by begging the question.

I linked you EIOL. It's short. Read it. You seem passionate. If you're as logical as you are passionate, you could be an asset for liberty.

Again if individual welfare, while well intentioned, weakens the individual, how can corporate welfare do otherwise?

It can't. It makes business dependent and weak.

I want strong American business. I assume you do too? Well your plan makes for GM's. I don't think it's your plan if you understood.

I'm assuming you are a patriot. I'm assuming you are intelligent. Read the damned short book I linked then tell me how it's wrong.

Or, as I hope, show me my assumptions are correct.

guy. u dont seem to get the


u dont seem to get the difference between economic arguments and political arguments. my entire point was, even if some policy would be economically inefficient, it could have a political justification outside of the economic argument.

i read EIOL about hmmm 4 or 5 years ago. plz stop telling me to read stuff i can tell you to read stuff all day. appealing to authority is not proper discussion etiquette. thank you.

Suggesting you read something

Suggesting you read something is not appealing to authority. It's assuming you have the capacity to learn.

Appeal to authority is saying you're wrong because some authority says so. I'm saying go read so you can learn. And while I surely believe that if you had read EIOL you would not be arguing this, because you would know the arguments, I'm not saying they are right because H or R or M wrote them. I'm saying at least understand what you're arguing against.

EIOL is the most concise exposition of it's kind. It's still a couple hundred pages. I'm not a Hazlitt, and I certainly can't distill it below that. But yes if you have figured out a counterargument to one of Hazlitt's free market arguments please come back and let's explore. I'd also recommend Democracy the God that failed by Hoppe if you're moved by socio-political arguments.

And there is no political justification for any policy that destroys wealth and creates privation, except for the ones who profit in the short term.

Empires end for economic reasons, and the policies you suggest, are the cause. Anymore than you can give someone welfare and not make them dependent you can't support domestic firms without making them weak. This dependence requires them to need ever more support. This support comes at the expense of firms that could previously survive on their own. The strong are cannibalized to perpetuate the weak. This ends predictably. Again what US firm today could exist without protection? Not even Walmart could, in the way they do today anyway.

The policies of empires are the source of empire's demise. If there's 'political' rationale for those policies then there is logical rationale for suicide.

are you dense? this is the

are you dense? this is the third post in which i will tell you that i read EIOL more than 4 years ago.

i love Hoppe's analysis of Democracy, and read his work on democracy years ago. i think democracy is the primary obstacle to libertarian political outcomes.

anyway i've had enough of you in general.

Who is upvoting this? What kind of libertarian advocates...

protectionism? Why is this on the front page?

If you all haven't caught on yet, BILL3 is not for liberty.


Nowhere in this post does Bill3 advocate protectionism. The title is called "Is PRISM an argument for Protectionism?" He then presents rather logical and compelling arguments knowledgeable persons could use in favor of protectionism (at least under certain circumstances). He then challenges liberty advocates to make arguments against it without the regurgitation of blanket liberty claims and Ron Paul speeches. The liberty movement should be involved in more healthy, Socratic-like dialogues such as this regardless of who initiates them (Note: I do not personally believe Bill3 is anti-liberty).

thanks, very much appreciated

thanks, very much appreciated

Well he is arguing for

Well he is arguing for protectionism, and asking for someone to " make arguments against " protectionism in an environment such as this is like asking for saltwater at the bottom of the Marianas trench.

These days the only people arguing for protectionism are statists, and they are being deliberately obtuse in ignoring the treasure trove of economic literature demonstrating the harm caused by protectionism.

It's one thing to be an economic ignoramus if you're a product of socialized education and watch reality TV all day. It's another to be so after being in the liberty movement this long and continue to be.

It's not just that protectionism is immoral. It of course is immoral as all redistribution is. But that's not the point. The point is it doesn't work and cannot ever work. I can and have explained it to people who cannot be expected to have read any of the usual luminaries who have written extensively on the topic. But Bill3 knows where to find the corrective for his ignorance and chooses to remain ignorant. And no one here can do better at explaining then those writers.

If he wants to impress us, then go find some flaw in Rothbard or Hazlitt, etc then come enlighten us about his great discovery.

all those letters and words

all those letters and words and no argument : ((((

why reply if you don't have a point man... there are poor kids in the third world who don't have enough text and here you are wasting it.

Have you read any of his arguments below?

In addition, in other threads, he's argued that might makes right and that rights are bestowed upon the people by governments.

From his statements below, he clearly supports protectionism.

there's no need to resort to

there's no need to resort to lies my friend. as newt prob already knows my view of the legal origin of rights is the same as Big L. von mises, the oft invoked, never read Boss of economics.

rights are political claims enforced by the legal order. legal order is brought about when formerly opposed political bodies or units within society reach an accord and choose peace. when their opposing claims are subjected to the peaceful arbitration of a designated body, according to the law, 'Right' is given a legal basis, rather than merely being determined by might, as in nature.

that's my view... you don't seem to realize that it is a perfectly common and acceptable view amongst many classical liberals and many modern libertarians. not everyone is living in candy land where Rights are plucked from the trees planted by a loving jolly old man called Nature.

Protectionism is not the

Protectionism is not the answer. While the enlightenment and the US Constitution were necessary in this journey toward finding our humanity, they should not be seen as the ultimate success story. All human action should be voluntary and that is an achievable le goal in the long view. Humans will learn how to organise human affairs without force, fraud, and aggression or continue on in the insanity loop. I hope and so believe the former as it is the logical path forward.

As long as the state has part in educating a free people it foster nationalism and conformity and destroy curiosity. Soon after freedom spawned apathy sets in, and the state will be taken over by socio-psychopaths and narciscists. Going back to some strict tweaked constitutional republic is going backwards. If our greatgrandchildren are still wrestling to control the governments guns and point them at those who do not think or act approvingly or use the power to enrich them selves then we have all failed.

It is true that a common view or reverence for reason and non-violence must become the law of the land. We get there by changing ourselves instead of forcing others to change. It's a long hard slog. Political action is so much easier.

part of the point, dwalters,

part of the point, dwalters, is that in a world in which US empire exists, smaller countries have to do things they otherwise might not do, in order to be able to act independently from us.

it isn't a coincidence that most of the countries that defy the US politically, and nearly all small countries that do so, tend to be authoritarian and socialist to a degree.

it is not necessarily because they want to, but because a small country that allows open entry into its business and elections is vulnerable to dominance by american influence. its very easy for a few US corps, or the american state dept or cia, to go into small latin american or asian states and dominate the local politics and business with all kinds of horrible interventionist policies. we do it all the time.

this is especially true historically in western hemisphere countries. a small latin american country can hardly divorce itself from american influence without resorting to authoritarian or socialist policies.

the same holds true regarding protectionism. the existence of the american empire is a political fact that can't be wished away. if countries with much smaller economies did not protect certain industries, they would have much less political independence.

try to look at the world from a non american perspective. imagine you're a legislator in the netherlands. suppose all the telecom service in the country comes from a few american and german conglomerates which you know are subject to US and EU surveillance. if the market is failing to provide an alternative, you might introduce legislation to subsidize a domestic competitor until it is large enough to be price competitive.

perhaps you don't want ANY domestic telecom traffic under foreign surveillance... why not put that decision to the people of your country via the legislature? let them decide.

the majority of consumers might very much support the new law, even though they prefer to pay for the cheaper established telecom service they're used to on an individual consumer level.

consumers make decisions all the time that benefit them economically, but which conflict with their over arching political feeling.

there is obviously a line to be drawn. i'm sure you wouldn't support trade with a state that used massive concentration camps to produce its exports. so we both accept there's a line. where is it appropriate to draw the line?

Yes we support trade with

Yes we support trade with anyone regardless. You're right it's no accident states which do not kneel to our guns tend to be authoritarian. The reason is because we put authoritarians in.

Again your argument is based on a flawed premise. That the government can help the economy. It is impossible for it to do so. It's not that it chooses not to. It's not that with the right people doing the central planning that it could, but that there are social forces and political forces stopping it from doing so.

The point is it's impossible to centrally plan a strong economy.

Any small country can become an economic powerhouse by simply ceasing to plan. That's it. Look at Singapore or Hong Kong. Still fascist but much more free market than we are.

There's no policy, much less a protectionist policy that can help our economy. If we want, as I do, the US to become the economic powerhouse of the world, now and forever, just let it free. A firm which survives only by protection is a caged show dog. We need wolves and junkyard dogs which survive without any protection and thus will dominate the world without us having to invade countries to protect them. Our wolves will eat their 'protected' Bichon Frise's again.

Instead we now have our Bichon Frise's dressed up like Dobermans, but if you dare point out they can't compete their way out of a paper fence.. we roll in the tanks. That's fine if you're the Bichon Frise in question, for a while, but since Americans are funding the tanks, and Americans are broke, what will they do when we just can't afford to be the worlds ahssoles anymore?

What will your protected firms do then?

They will die, just as they should have long ago, and without innocent and ignorant Americans going into sovereign debt funding it all.

If you want strong American business, stop protecting it. If you want a son that can stand on his own, don't fight his battles for him. American businesses today are mainly a bunch of skirt hugging mama's boys that can't compete for crap without some government subsidy, tariff, or lollipop. They are dressed up as Mohammad Ali, and because there's F22's and M1's behind them, people pretend they are Mohammad Ali. But they are really just little mama's boy pussies.

And it's embarrassing.

its hard to imagine what kind

its hard to imagine what kind of chaos must be going on in your brain to concoct such a directionless rant, responding in substance to nothing in the OP, or any subsequent comments.

I made a direct assertion

The government cannot help the economy on net over time. All it can do is shift resources. That activity must always destroy capital on net over time.

You would think you would have a ready retort. This is a strong assertion which directly falsifies your fuddled right keynesian understanding of economics.

If you are right surely this is a softball. Yet like (almost) everyone who criticizes Austrian observations, you can't. All you can do is bluster.

Resorting to authoritarianism is never a productive way

to "protect" the people.

perhaps you don't want ANY domestic telecom traffic under foreign surveillance... why not put that decision to the people of your country via the legislature?

This would require large scale restriction on internet access for the people. The government is not "the people" even in a representative democracy. In most circumstances, nearly half the voting public voted against those people in office. Tyranny by majority is still tyranny.

there is obviously a line to be drawn. i'm sure you wouldn't support trade with a state that used massive concentration camps to produce its exports. so we both accept there's a line. where is it appropriate to draw the line?

Now, you are trying to put words in my mouth. I never accepted anything. A state that used massive concentration camps to produce its exports wouldn't be able to compete in a global market. It's an unrealistic example. At one time (before the gold standard was abandoned), the US was the source of all the cheapest (but high quality) goods while at the same time having the highest wages in the world. The workers were simply more productive due to the availability of superior capital goods.

There's been plenty of people over the years that have argued for statism using similar arguments to yours, but they are all flawed and fail to see the entire picture. What you are condoning here is authoritarianism and true isolationism.

...AND..... Less developed


Less developed countries use inferior production methods and safety standards BECAUSE they are undeveloped.

If you start trying to "protect" yourself from their poverty, how the hell do you expect these underdeveloped places to EVER accumulate capital, to EVER meet YOUR safety "standards", to EVER feed themselves without putting their children to work, to EVER have wages rates on par with the same type of work in other countries?

.... And keeping these people impoverished just in case(and here's the clincher)... a conservative takes hold of the reigns and decides that your trading partner is actually a dragon in need of slaying?

.... All of this based on the idea that people don't value certain things? Well, you obviously do. Why would you just automatically assume that others won't?

Thus is the problem with protectionism. It's pure evil no matter how your dress it.

"I do not add 'within the limits of the law,' because law is often but the tyrant's will, and always so when it violates the right of an individual."

this is an imprecise,

this is an imprecise, wandering emotional mess without any logical relation to any of the points i raised.

Yes, protectionism is,

Yes, protectionism is, indeed, "imprecise, wandering emotional mess without any logic".

It makes good fodder for satire, though. Of course, I chose the words and style of the above post for the specific purpose of exposing the illogical, emotional, wandering mess that is protectionism, and subjecting the idea to a little satire. ;)

Protectioism is how people thought before economic science was developed. The only reason it exists today is for politicians in a democracy to "buy" votes.

"I do not add 'within the limits of the law,' because law is often but the tyrant's will, and always so when it violates the right of an individual."

productive or not, the only

productive or not, the only small countries able to defy us successfully have to be closed to our economic influence and cannot have elections open to our manipulation. whether you approve of it or not, it is a political fact. if the us wants to control the policy of a small country, it is very easy to do so non violently if that country's economic and political institutions are for sale to us.

the presence of an aggressive US empire using economic means to control policy in small countries necessitates resorting to such means to block the control. its a choice of lesser evil, foreign control or restriction on foreign capital's access to one's market. the history of US imperialism in "free" markets in third world countries is just as ugly as the domestic oppression used by socialist governments to block this imperialism.

reality is not always pretty, and people have to make choices of which evil they will accept when two evils are the only options they are allowed.

countries absolutely have the right to block foreign companies from their markets if they disapprove morally of some practice that company is involved in. banks that launder funds from terrorists are blocked in america. there are easily dozens of examples. if a country wants to block out giant spying apparatuses from their communications infrastructure, it is a matter of legislation. all legislation is not approved by 100% of the public. are you suggesting that no law should apply without 100% support at all times?

also, there are hundreds of companies that are either know to be or later revealed to be cia fronts, or fronts for other intel agencies. as long as nations exist and use extra legal means to achieve their ends, then other countries will act in kind. unless you abolish nations you will not abolish the freedom of nations to restrict market access from foreign companies.

i didn't put any words in your mouth. i said that im sure you wouldn't support trade with a state using slave labor to produce goods. you replied with an unrelated claim that slave labor can never be competitive, totally sidestepping the issue. if you don't want to address the issue that is fine, but i'll take that as confirmation of my point.

you mention that 'at one time' the USA exported such and such. well, at OTHER times, slave states exported goods cheaper than competitors. it has happened before and could certainly happen again. nothing written in stone prevents its. but nitpicking the example in order to avoid accepting the basic principle is not a rational way to have a discussion.

are there NO circumstances in which it would be appropriate to restrict trade in any way? what if we were literally at war with a country that attacked us. would you say that even then no restrictions could be replaced on trade with them. suppose the country were seizing our own natural gas fields, and leveling the surrounding towns. we would be wrong to stop trading with them?