I am a little surprised that so many people are against Trump’s tariffs on foreign aluminum at a rate of 10% and a 25% rate on steel. Critics are declaring that Trump is messing with free market concepts and that utilizing an America first policy will drive up prices and harm industries needing cheap aluminum. Rather the opposite will turn out to be true, a lot of the great wealth that China has enjoyed as a communist nation is this international propping up through wealth redistribution that has been occurring for several decades now. China has enjoyed a different kind of crony capitalism that has used regulation and trade policies meant to harm American interests and transfer the wealth to recipient countries, which they of course have enjoyed tremendously. But in any situation the way to determine who will win and who will lose in these types of engagements is to understand who has the leverage position and who doesn’t.
As if we are supposed to care but The Beer Institute, a trade association and D.C. lobby firm said that a 10% increase on aluminum would cost the industry $347 million and more than 20,000 jobs. Really? People who drink beer even if the cost per can did go up like they say it will of .20 to .24 cents per can aren’t going to stop drinking the product. Ever go to an NFL game where beer is $8 a cup? People who drink beer really don’t care how much it costs so how are beer manufacturers going to lose 20,000 jobs? People just got a raise in their weekly checks. Granted, they should net a weekly profit, but if they are going to drink beer, they don’t care if the price goes up .24 cents. If anything, I would think beer consumption would increase because people’s expendable income has increased under Trump and that’s the real issue.
Obviously, the trade imbalance has been a real problem for many decades and people have come to get used to it—and accept that the United States would just get the short end of the stick. As the richest capitalist country in the world there were many jealous countries that wanted very much to ride the coattails of North America to greater prosperity for themselves—primarily China. China with even its billion people still has an economy that is behind the United States and that is due to the fact that everything is state-run. Russia has a similar problem, this past week it was released that they had some kind of invincible weapon that could attack the United States without detection. Well, why does anybody think they released that information—for the same reason that North Korea does, to scream like a child to let people know they are at the negotiating table. But they have nothing to offer, so what is there to talk about?
When we pick something up that is a material possession do we say—“hey, that was made in Russia, or China, or even North Korea. Look at that great craftsmanship?” We don’t. Russia and China occupy most of the world’s land mass together yet they are behind countries like Japan and the United States in economic output per capita and the only reason it’s never pointed out is that the stunted growth is due to the history of communism in those two places. Many in the media markets still hope that communism can find its way in the world but it never will, because the epistemological premise of economic philosophy behind communism is incorrect. The world has literally tried to fake it for most of the last century and they’ve used the United States as a way to prop up the concept with looted wealth.
I’m not anti-China, but I am very much anti-communism. China is a pretty neat country and has always been before they turned to communism in the aftermath of World War II. If China would like to adopt capitalism I think they could truly explode as an economic force around the world. The same as Russia, if they would truly become free market capitalists, they’d have a lot more to work with than the United States has had to work with.
I would recommend to anybody interested in economic matters of any kind to read the great book by Adam Smith, The Wealth of Nations. I have the older 1976 copy of its many renditions, and on page 364 paragraph 3 it states “The annual produce of the land and labour of any nation can be increased in its value by no other means, but by increasing either the number of its productive labourers, or the productive powers of those labourers who had before been employed.” For instance, if some Chinese person is making baskets and they can make three in a day by hand, the way to increase those baskets would be to either add more workers to make baskets, or to make it so that the basket maker can produce more per hour. The productive work has a measurable value and the Chinese and Russian markets have an abundance of people who want to inject more “labour” to a task, but the problem for them is that the need for that product is created by American capitalism. So the only way that there can be a global market of shared wealth in this present world where communism has destroyed much of it economically, is to have the needs for products arise in America and to have the job fulfillment going on in the communist countries. Since China has an abundance of people they can afford to throw their labour at the market demand and charge a cheaper rate—whereas in the United States the per capita output is necessarily much higher meaning the labor demand for each product garners higher value because that labor value is being divided over many market trajectories. In short, labor is cheaper in markets that have parasitic economics and that ratio has been encouraged by world leaders who still believe that the way to social fairness everywhere is through various philosophies of socialism and communism.
There isn’t going to be any trade wars with the world, not in China, not in Europe, not in Russia. China needs the food the United States produces so they’d be hurting themselves by jacking up the price for their own people. They can’t feed all their people because the incentive for work has been taken away from their economy by the state-run communism which mandates all their policies. That leaves people to do only what they must, which makes them staff all their labor needs in the most inefficient means possible. Without basic capitalist ideas like private property ownership and incentives for innovation, the cost of labour is mandated by bodies, not innovation meaning a state-run country always gets only the minimum of that effort because of the human predilection to only provide what they must since the state is the entity which collects the efforts for its own economy. Yet product is developed for those who can possess it, and that is why all the lucrative markets are still in the United States which puts all the leverage behind Trump’s tariffs.
Given all that understanding it is incorrect to artificially bring down the price of foreign goods at the expense of American wealth, because the wealth of the nation was created by the United States under the means of capitalism and that wealth has been looted to prop up the failed philosophies of tyrannical dictatorships—and that is what China has been for quite a long time. Russia is also too authoritarian which is left over from when they were one of the largest communist countries in the world. Apple has more value as a company than most of the Russian economy which is very sad considering the vast wealth that Russia has that is underutilized. When they were allowed to feel like the big kids on the block by charging NASA to fly into space and were pandered to on the world stage it made Putin look legitimate as the former KGB officer turned politician. Now under Trump all that artificial leverage has been taken away leaving him to be just another saber-rattling despot threatening global destruction if someone doesn’t give him some money. China will be the next, but the real matter on the table is that these countries can do nothing, because they don’t have the money for it. Russia barely has enough money to launch a missile, let along build a lot of them, just like North Korea doesn’t. And the best way to keep China from sneaking money into places like North Korea is to cut them off from American wealth as well. Then when they are faced with the failures of communism compared to nations that aren’t so limited will they be forced to change. They might scream and threaten in the meantime, but they are harmless, because they don’t have the gold that rules the world. America does—and it’s not because we are functioning from raw imperialism. It’s just because we adopted Adam Smith’s economic philosophy and the rest of the world hasn’t yet. But they need to.
A few years from now people will realize how brilliant Trump’s tariffs really were. They will re-establish balance around the globe for economic value without propping up communist regimes, and the truth will finally be revealed. America will of course prosper, people will still drink beer, buy cars and build things. Costs will align with the practice methods of innovative business means to combine the efforts of labour to the effect of national GDP. Some costs will go down, some may increase, but the net yield will benefit America for the better and that’s all that really matters. The parasites will have to adapt and if we really want to see an end to communism in the world and free people from its tyrannical effects, we will let the tariffs destroy it for the good of the people suppressed under it. We don’t need tanks and troops to do that—all we need to do is let market forces do their work and that is how the world will be much better and freer at the end of Trump’s four years than it ever was before. And that will be good for everyone—except the tyrants.
Sign up for Second Call Defense here: http://www.secondcalldefense.org/?affiliate=20707 Use my name to get added benefits.