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Jack Heart’s Conversations from the porch, Tariffs – Episode 67

Jack Heart’s Conversations from the porch, Tariffs – Episode 67

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 Excerpted From The Bormann Faction Part II by Jack Heart & OrageWestern history, the part that’s indisputable, begins when marauding Conquistadors aligned themselves with the papacy and overran what we now call the “New World,” slaughtering the native inhabitants by the millions. Tons of plundered gold and silver would flood Spain and within less than fifty years collapse its economy like a wet taco. Its people faced famine. You cannot eat gold and silver and when all is said and done their just another commodity, the more you have, the less their worth. Spain’s economy proved unable to sustain the infusion of all that gold and silver and “Spanish kings were continuously in debt and forced to declare bankruptcy in 1560, 1575, 1596, 1607, 1627, 1647 and 1653.” (47)Europe learned a basic law of economics the hard way. A strong economy is insured when you maximize your exports while minimizing your imports. Adam Smith would later dub this practice mercantilism.Sweden would be ruined in its war with Russia and using this system the French and British, along with the Dutch whose populace was vastly outnumbered by the other two competing nations and only won their independence from Spain in 1581 but compensated for these handicaps with “a strong work ethic, a restraint from conspicuous consumption, and a vigorous trade regiment,” would become the preeminent economic powers of Europe. The first one to set down the rules for the as of yet unnamed practice of mercantilism was Englishman Sir Thomas Mun, whose evaluation of the Dutch was just quoted.Mun was the Director of the East India Company. He would promulgate the doctrines and practices that would give rise to the most powerful company the world had ever known. He wrote two books A Discourse of Trade from England Unto the East Indies in 1621 and England’s Treasure by Foreign Trade in 1628 where he chastised his countryman for not being as thrifty as the Dutch. Mun laid out a list of policies which he urged England to follow.In his book, England’s Treasure by Foreign Trade Mun urged the British to ban all imports that can be produced within England. To convince English people they wanted English luxury goods. Mun advised the monarchy to lower taxes and tariffs on businesses producing goods for export and charge more money on goods for which England had a monopoly on the production. Mun advised England to cultivate her unused real estate to avoid having to import goods and increase her own production, along with this he wanted all imports to be completed by British shipping.(3)Mun would die in 1641and ten years later Thomas Hobbs would justify every atrocity that was ever committed in the name of British imperialism when he wrote the dehumanizing bible; Leviathan. In France Jean-Baptiste Colbert under the auspices of the Jesuits would rise to the pinnacle of power in the court of the Sun King Louis XIV. While Colbert’s benefactor Cardinal Mazarin “became the richest man in the world” and Louie amused himself fighting war upon war, otherwise immersing himself in the dark scandal that was “L’affaire des poisons,” (48) Colbert ran France.As Louie’s Comptroller-General of Finances Colbert would work tirelessly for over twenty years to increase the states hold on the economy until finally expiring in 1683. Colbert’s basic premise was to maintain a ‘favorable balance of trade’ in which products were exported for gold and to guard against an ‘unfavorable balance of trade’ where gold would flow out by using the power of government to strictly regulate French trade.Colbert tried to undermine the Dutch wherever possible and stressed higher quality for French products, levying fines on those that produced shoddy merchandise. He closely regulated the manufacture of every conceivable product and built a strong merchant fleet to carry those products to the rest of the world. To the dismay of independent entrepreneurs he encouraged trade coalitions and cartels, organized under his own central bureaucracy, to which he extended monopoly privileges.Although Colbert built France into an economic powerhouse eventually his system, dubbed Colbertism by economists, would leave France stranded in the seventeenth century. France was unable to keep up with the nimbler freer enterprise systems of the English and Dutch and its people, now starving in the streets, would overthrow the monarchy in the late eighteenth century. Astoundingly enough around the same time the French were beheading King Louis XVI for it Alexander Hamilton with his Report on the Subject of Manufactures was making a case for Colbertism in the fledgling American republic.France would reinstitute a form Colbertism after WW II called Dirigisme from the French word diriger, meaning to direct. For thirty years the French economy was the envy of the world but by 1975 France was once again lagging behind her competitors in technology. China currently practices a form of ...

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