The American School of Economics

Email from Sue

If not the Religions of Free Trade Marketeering or Marxism/Leninism — then what?

Hawaii imports 85% of what it consumes and has embarked on a program of self-sufficiency.

I went looking for what economists think about self-sufficiency – generally expecting a negative opinion, since self-sufficiency is the opposite of the Religion of Free Trade Marketeering. Found an article in Wikipedia about the American School of Economics, which relies in part on tariffs to prevent outside compensation … Not so thrilled with tariffs, but there are other ways to prevent market predation by large corporations undercutting local producers … strengthening and expanding antitrust and unfair competition rules would be one.

The American School of Economics was the main economic policy of the US from the Civil War to the mid 20th Century. The primary policies were selective high tariffs, government investment in infrastructure, and a national bank that helped create productive businesses. It wanted the US to be “economically independent and nationally self-sufficient.”

It seems to me that self-sufficiency is vital to curing the economic and financial devastation we are experiencing. A country that produces most of what it needs is a prosperous, fully-employed, and responsible for the environmental effects of its own production. It wouldn’t remediate greed or convert me into a non-Suckist, but it would be a good first step: Let each country make most of what it needs, internally.

FYI: Sue follows the political philosphy of Suckism, which states that “merchant morality is pirate morality, so you can’t let it be unregulated.”

Countries that are self-sufficient would indeed, seems to me, be healthier and less dependent on outside forces.

The US would certainly have less wars if its imports of foriegn oil were negligble, wouldn’t it?

  • UJ

    Hm, a US economy acting independently of globalized world markets? Not sure that’s as good as it sounds. Devil’s advocate…

    #1 that seems like another form of de-regulation on a massive scale, ie one man’s “independent” is another man’s “unilateral.” There is an arguable consensus among experts that countries in this crisis have erred by acting independently in their own self interest outside of the concerns of the very real globalized economies. Now is the time to throw open the doors and work with (read:be checked and balanced by) other countries and other economies.

    #2 this could cause a collapse in the military industrial complex, heavily funded as you know by international weapons deals, throwing a wrench in the gears of US imperialism. This would be catastrophic for both our own national security (refugees from Latin America, transnational terrorists from Central Asia and the Middle East) but also for global peace and security (Piracy on the Horn of Africa, Racist populism in Eastern Europe, Unchecked ethnic rivalries along the Strait of Malacca, Chinese imperialism and the so-called Taiwan Scenario).

    #3 examples of countries isolated from the global economic order abound. They include Syria, Iran, Sudan, Lebanon, Zimbabwe, Palestine, Somalia, Yemen, or if you prefer a colder climate, North Korea.

  • DJ

    And on the other shoulder… My history prof at Santa Monica College, who leaned a wee bit Left and very openly taught Marxist political analysis, argued that no country came to economic prowess WITHOUT isolationist tariffs to protect it from stronger economies. Free trade benefits the rich. (And I doubt Adam Smith would argue with that, given his belief in progressive taxation.)

    On the other hand, UJ is correct in noticing that we have a global economy and no global checks and balances. In my view, there are only two solutions: shrink the economy, or create a government big enough to regulate and progressively tax all participants worldwide. Personally, I see the former as inevitable since I doubt we’ll see the latter in our lifetime.

  • rob

    The debate over protectionism as being effective ended in the 19th century. It was proven that real wages actually rose. The american school gave america its high living standard and its productive capacity, it worked formally from 1789-1913. It also worked partially from 1913-1971 and prospered even while the US economy had to deal with proto-keynesianism and keynesianism during that time, which basically added dead weight to the US economy. Since 1971 the american school of economics was abandoned and has been forgotten completely. All we have now is keynesianism, the chicago school and the austrian school, none of which have proven to be a success in any individual capacity.

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