A while back, I wrote a post criticizing Yoram Hazony’s concern that free trade, while generally good, can undermine the bonds of mutual loyalty among citizens. My claim was that “mutual loyalty” by itself does not give a positive reason to prefer intranational over international trade:
Suppose I’m looking to build a house, and I need to purchase a certain amount of lumber to do so. Walter, from Washington state, can provide me what I need at a certain price. However, Carl the Canadian can also offer me the same lumber at the same quality, but Carl’s selling price is $35,000 lower. Under free trade, I am free to favor Walter over Carl, because I prefer to buy from an American, or I may also choose to buy from Carl over Walter to save a significant sum of money. Presumably, Hazony thinks there is an obligation rooted in loyalty to buy from Walter over Carl, but it’s not clear why. After all, what Hazony invokes so often is the idea of mutual loyalty – and the thing about mutual loyalty is that it’s mutual. The obligation goes in both directions. So why would we say I’m failing to show Walter proper loyalty by buying from Carl? Why not say Walter would be failing to show proper loyalty to me, by insisting I buy from him despite the huge additional financial burden it would impose on me? Simply saying “mutual loyalty” does nothing to resolve this.
However, this point of mine doesn’t strictly defeat Hazony’s objection. At best, it only puts things in a stalemate. As I argued elsewhere, we need some kind of symmetry-breaker to resolve situations like this. For people whose worldview aligns with classical liberalism, it’s easy to cite individual liberty as breaking the symmetry. But this would be inadequate as a response to the argument Hazony makes. As part of his own argument and worldview, individual liberty can’t simply be thrown out as a trump card that overrules every other consideration. As Hazony put it,
Conservatives, on the other hand, consider the liberty of the individual to be a precious good to be cultivated and protected, but one that finds its place within a complex of competing principles that must be balanced against one another if the life of the nation is to be sustained.
So to Hazony and his fellow thinkers, in situations like this, there is more at stake that needs to be considered beyond what maximizes the liberty of the individual. As a general strategy of discussion, you’re unlikely to make progress by offering responses to your interlocuter that require them to assume the truth of your worldview and falsity of their own. Responding to that argument by saying “But we should still favor free trade because it maximizes individual liberty!” in this context is question-begging – it’s assuming the very point under dispute. Hazony, and NatCons more generally, don’t deny that free trade would more greatly expand individual liberty. Their argument, rather, is that maximizing individual liberty can conflict with the mutual loyalty that holds societies together, and in those cases, these are two competing goods that must be traded off against each other.
There are two routes I can see to respond to someone like Hazony in these cases. One is to shift the argument to whether or not individual liberty should be a trump card, or should be maximized in all cases. The other is to argue that even within Hazony’s own worldview, there are reasons to prefer a system that allows – even encourages – buying lumber from Carl over Walter. It’s this second scenario that I argue for here.
If two people wish to interact with each other in a way that not only considers their individual liberty to do what they wish, but also factors in bonds of mutual loyalty that bind them together, what would those two people want? If Walter and I are motivated by bonds of mutual loyalty, we would truly want what is best for each other. And this desire, if held in a mature way, looks beyond what is best for one of us merely at the present moment, or in an individual transaction. We would want what is best for each other in a more holistic and long-term way. We would be motivated by the sympathy Adam Smith wrote about, and that David Schmidtz unpacked so eloquently in is book Living Together:
Second, it makes perfect sense for the author whose first book treated benevolence as primary to subsequently ask how to respond benevolently to trading partners. Why, as a benevolent person hoping to truck and bater with brewers and bakers, do you address their self-love? Answer: because you want them to be better off for having come to you. Notice that Smith does not say bakers are motivated solely by self-love. He says we address ourselves not to their benevolence but to their self-love (WN, Book I, chap. 2). This is a reflection on our psychology, not theirs. He is offering insight not into the self-love of bakers but into what it takes to be benevolent in our dealings with them.
In sum, the author of Moral Sentiments gives center stage to virtue and benevolence, but, in elaborating what benevolence means, the author of Wealth of Nations belabors the obvious: namely, a man of true benevolence wants his partners to be better off with him than without him. The point of addressing other people’s self-love is to give them their due. That’s what it’s like to succeed in one’s attempt to be sympathetic.
Thus, Walter and I would both consider more than what makes one or the other of us better off in a single transaction. We would want to work together within a system that makes both of us better off in the long term – not just in this one transaction, but throughout our lives. And this is what a system of free trade does. Looking at a static picture, it might seem like free trade would make Walter worse off, because he’d need to either substantially lower his price, or lose the sale of lumber. But in a system of free trade, in the longer term, Walter gets much more than he loses. Walter, too, can avail himself of the widest possible selection of goods and services made at the best possible prices.
Think of how I, specifically, would benefit under free trade in the lumber transaction. I would get the benefit of the lumber, plus I’d be able to consume a significant amount of additional goods and services on top of that with the money I’d save from the lower price. Or instead of increasing my consumption, I could put the extra money away into a retirement account, or to a college fund for my children. If I buy from Walter, I get only the lumber and lose out on the rest.
But this same situation holds true for Walter, for all the goods and services he consumes as well. In a system of free trade, he gains all these benefits from all of his purchases. The clothes he buys, the food he eats, the materials used to build all the durable goods he enjoys – in all these transactions, he would gain from free trade in the same way I would gain from free trade in lumber in this one transaction.
But might Walter end up losing his job under free trade? It’s possible, yes. Free trade doesn’t destroy or create jobs on net, in the long run. But it does change the makeup of jobs. As Alan Blinder put it, the effect of protectionism isn’t so much job saving as “job swapping. It protects jobs in some industries only by destroying jobs in others.” And because protectionism shifts jobs to areas where goods and services are more costly to produce domestically, and away from jobs where American workers have a comparative advantage, it makes jobs in the long run less productive and lower paying than they otherwise would be.
Lastly, if Walter was himself motivated by mutual loyalty, he would consider the costs he’s imposing on his fellow citizens by seeking protection for his industry. Research has consistently shown that the costs imposed on American consumers in the forms of higher prices vastly exceed the protected wages of workers whose jobs are preserved by protectionism. To quote from Blinder’s essay linked above, “one study in the early 1990s estimated that U.S. consumers paid $1,285,000 annually for each job in the luggage industry that was preserved by barriers to imports, a sum that greatly exceeded the average earnings of a luggage worker.”
Let’s be generous and assume that these luggage workers were very well paid – perhaps making a salary of $250,000 per year. Even then, the costs being imposed on that workers fellow citizens is over five times higher than the benefit they obtain. Would I, as someone truly motivated by the benevolence Adam Smith so eloquently described, and motivated by a desire to honor a sense of mutual loyalty to my, support a policy that imposes costs on my fellow citizens five times higher than the benefit I gain? The answer to that seems to be a clear no to me. Just as “a man of true benevolence wants his partners to be better off with him than without him,” a man motivated by mutual loyalty, too, wants his fellow citizens to be better off with him than without him. Benefitting one’s self at a greater expense being forcibly imposed on your fellow citizens is not upholding mutual loyalty. It’s simply taking advantage of them for personal gain. And anyone who wants to honor bonds of mutual loyalty among citizens should reject such behavior.
