The Debate over Free Trade

Stephen Bell

[Reprinted from Land and Freedom, March-April 1940]

Secretary Hull's program of reciprocal trade treaties is by far the best thing the present national Administration has brought forth, although it is such a puny and inadequate proposal that it does not arouse great enthusiasm in me. Its chief value lies in the opportunity it affords for real free traders to get a nation-wide audience before which they can present the merits of full commercial freedom, and for this I am devoutly thankful.

The Con of Free Trade, by Peter D. Haley, seems to me a case of the trees obscuring the forest. Does Mr. Haley regard production as one thing and trade as another thing, instead of being merely "mentally separable parts of the same thing", the industry by which mankind gets its living from the earth? Restraint of one inevitably means restraint of the other. The freedom of both, from the artificial restraints which have been imposed upon them, is necessary in order to achieve complete economic freedom, and Mr. Haley errs in thinking that the freeing of trade in itself is valueless. Protection is an important rampart protecting land monopolization, and it must be removed before economic freedom can be attained.

In his day Henry George properly stressed the rise in the rental value of land, which was absorbing the benefits of material progress. Taxation in this country was then comparatively small only in its infancy and capitalization of the unearned increment grew rapidly. In 1879, when "Progress and Poverty" was first published, the entire revenue of the Federal government was a scant $318,000,000, and state and local taxation was also relatively small. Today the naval bill before Congress calls for more than three times that sum, while the mere interest on the national debt of about forty-five billion dollars calls for more than a billion dollars, even though present interest rates are unprecedentedly low.

Mr. Haley must know that it has been estimated by competent investigators that taxes are absorbing 25 per cent or more of the nation's earnings, that taxes on the products and processes of industry and trade constitute 25 to 30 per cent of the cost and price of the things comprising our standard of living. He should know that tariff taxes rank high among the taxes which enhance the cost and price of goods. Surely he knows that the whole vicious system of misplaced and larcenous taxes must be swept away, and the burden of the public revenue placed where it rightfully belongs on the socially created rental value of the land. Certainly, he ought to know that, however desirable it may be to get rid of the whole thievish tax system all at once, we cannot do it that way. We must attack it wherever we can, and if the opportunity presents itself to attack the tariff, we should not let it go by.