The great Arthur Laffer is unyielding in his support for open borders to foreign goods. Years ago, around 2003, Laffer explained the genius of open markets to an audience mixed with skeptics and true believers.
Laffer asked those in attendance to imagine a crucial cancer cure that’s come to market overseas. Would anyone in the audience reject such an advance solely because of where it’s made? The question answered itself, and some skeptics were converted.
Some will say Laffer was shooting fish in a barrel by using cancer as the example, and he would likely nod his head. What shoots fish instructs. And it instructed well with Laffer’s example precisely because it was and is easily transferrable to every good and service in existence, along with those on the way.
Laffer’s underlying point was that imports improve us. It’s sad that something so basic requires stating, but it’s true. If you’re a worker you’re an importer, and you’re improved the more that you have talented people around the world competing to enhance your lot.
Thinking about this through an American prism, Los Angeles-based billionaire Patrick Soon-Shiong’s source of immense wealth is among other things rooted in his development of the drug Abraxane. The latter hasn’t solved the killer that is pancreatic cancer, but it’s seemingly given those afflicted more of a fighting chance.
And since pancreatic cancer knows no country borders, can anyone imagine people around the world refusing that which might save them solely because it was developed in the U.S.? Would people from China refuse the drug?
Interesting is that Soon-Shiong was born in China. That he was should soften the rhetoric of Americans eager to shut down exchange between the U.S. and China, along with supply lines that make all manner of brilliant plenty possible. The only closed economy is the world economy as Robert Mundell long ago observed, and talented people whose genius will lift all of us come from everywhere. Abraxane is an “American” innovation, but then Americans aren’t a race; rather they’re an ideal. A free ideal that includes openness to genius regardless of its origins. Assuming Soon-Shiong had stayed in China all this time, would Americans facing a death sentence refuse what would instead be a “Chinese” innovation?
All of which brings us to Peter Navarro, assistant to President Trump for trade and manufacturing, plus coordinator of the Defense Production Act policy. To say he personifies “never let a crisis go to waste” is to give this most limited of thinkers way too much credit.
Navarro can’t distinguish crisis or normalcy. For him, we’re always in crisis, and the latter is always a consequence of U.S. producers cooperating with producers around the world, and U.S. consumers importing from around the world. Translated, Navarro aims to weaken U.S. producers and consumers by forcing autarky on the U.S. Yes, people like him still exist. In the White House….
Stepping back for a second, in a recent opinion piece for USA Today, Navarro noted that the Trump administration is “moving swiftly” to “address a significant shortage” of ventilators necessary to help those hit hardest by the spread of Covid-19.
On its own, what perhaps reads as an innocuous statement speaks to how far the policy discussion has drifted in the wrong direction. Lest readers forget, they have supercomputers in their pockets that not too long ago would have cost millions, they have 4K UHD flat screen TVs they purchased for a few hundred dollars that retailed for $25,000+ just a few years ago, plus they can summon drivers at the tap of a button. These three isolated examples are but just a microscopic few of the many amazing advances brought to us by the profit-motivated. Not very many years ago all three were not only scarce, but they realistically didn’t exist at all.
That they didn’t hopefully opens the minds of readers up to how very much Navarro and the Trump administration’s efforts to “address a significant shortage” of ventilators is a non sequitur. Private, profit-motivated individuals erase shortages all the time. That’s how they profit. In that case, why insert someone of such miniature mind and thoughts as Navarro into the manufacture of that which is necessary to save lives? Don’t worry, it gets worse.
To Navarro, the answer to every question is always and everywhere erecting barriers to the production of others. To say he amazingly believes something is to pretend a lot of thinking informs what he says. Probably not. Needless to say, Navarro ties what he deems a ventilator shortage to his view that “America is too dependent on foreign nations and the global supply chain for essential medicines,” and his solution is more government force whereby we’ll be required to “buy American, secure our borders and build a strong manufacturing base.”
To help readers unpack Navarro’s solution, he’d like those empowered by government to author the U.S.’s economic retreat to work last done by Americans 50+ years ago; work that presently pays the equivalent of a Starbucks latte per day in overseas markets. But since Americans would never work in the factories that Navarro fantasizes about for anything close to latte wages, the cost of U.S.-based innovation would skyrocket. Of course, the costs alluded to would only grow with the imposition of “Buy American.” Stating the obvious, everything produced by “Americans” is a consequence of global cooperation; cooperation that Navarro would prefer cease so that the U.S. could rush toward always impoverishing border closures to global production.
It cannot be stressed enough that what Navarro calls for is about decline, about impoverishment, and because it’s about decline and impoverishment, it’s all about the exit from the U.S. of the investors whose capital commitments enable the experimentation that drives progress, and yes, cures for all manner of diseases and viruses. If sickness and death is the worry, then forced impoverishment of the kind Navarro champions amounts to raising the white flag.
Wealth creation is the greatest enemy of disease and death, and nothing else comes close. Yet Navarro persists in promoting a retreat from a global division of labor that has enabled enormous specialization, and with specialization, staggering advances that continue to improve our wealth, health and overall wellbeing.
Precisely because we potentially face viruses with the capacity to kill us, we want the greatest minds in the world working and producing together in order to arrive at cures as quickly as possible. Navarro seeks a retreat from that which drives progress, simply because he rejects the labor division that is the embodiment of same. No, we need innovation regardless of origin. Period. We need what Navarro rejects.
And we need much less of Navarro. His layoff amid all the sad ones that are a consequence of the political force he endorses would be rather welcome.
This previously appeared at RealClearMarkets