The merchant's error, writ large

The National Review piece makes a pointed observation: in committing to tariffs and an Iran war together, the current administration has surrendered the very ground — economic stewardship — on which it staked its political identity. I am not surprised. These two instruments, trade restriction and military adventure abroad, have always traveled together, and they have always, in the end, arrived at the same destination: a heavier burden on the ordinary consumer and workman, and a lighter purse in the public treasury.

Consider the tariff first. I argued at length — and I will not pretend modesty about it — that duties laid on imports do not protect a nation's wealth; they redistribute it. They take from the many who buy, and give to the few who produce behind the shelter of the restriction. The merchant who lobbies for a tariff on a foreign competitor's goods is not acting for the public; he is acting for himself, and asking the sovereign to make the consumer his collecting agent. When tariffs are broad and retaliatory — as inference from the lead suggests the present ones may be — the damage compounds: trading partners restrict in return, export industries contract, and the workman in both countries loses the gains that open exchange would have delivered.

Now add the expense of war. I observed in my own time that the funded debt accumulated by European sovereigns in their military contests was a charge laid upon future generations of taxpayers and workmen who had no voice in the original quarrel. An Iran war — I cannot speak to its precise conduct, having no recollection of events after 1790, and I mark this as inference from the headline — is, by the nature of such things, a commitment of treasure, credit, and attention that a sovereign cannot easily withdraw once begun. The cost is not merely monetary. It is the diversion of the public mind, of legislative energy, and of the institutional capacity to reform what most needs reforming at home.

What strikes me as the deeper pattern is this: mercantile restriction and foreign military adventure are not merely costly in themselves — they reinforce one another. A sovereign who has already told his people that foreign commerce is a threat to be managed by force of law finds it easier to tell them that foreign states are threats to be managed by force of arms. Both moves require the same intellectual error: the belief that national wealth is a fixed stock to be defended rather than a flow to be enlarged by exchange. I called this the mercantile system, and I spent a good part of The Wealth of Nations demonstrating that it impoverished the very nations it claimed to enrich.

The institutional question, as always, is the one that matters most. What framework disciplines a sovereign who reaches simultaneously for the tariff and the cannon? In my conception, the answer was a legislature attentive to the broad public interest rather than to the narrow petitions of the merchant and the manufacturer. Whether that discipline is presently available is not for me to say with confidence. But the National Review's observation — that economic stewardship has been forfeited — suggests that the check, wherever it resides, has not yet been applied. The consumer and the workman are waiting for it.