If there were no trade deficits, there would be no loss of jobs overseas. But by allowing America to export fiat money in lieu of actual goods or services, the Federal Reserve has made workers unnecessary.
Listen to this post: Twilight Patriot - 27 March 2019
A lot of
Americans hold some form of the opinion that the Chinese, or foreigners in
general, are taking away their jobs. The common reaction, at least among the
more unthinking portion of the population, is to demand restrictions on trade
so that the United States can stop losing in the trade war.
Hence the
burst of popularity that Mr. Trump experienced when he declared “I am a Tariff
Man.” Trump has won the support of millions of American workers by promising
not to let foreign workers replace them.
But while
this voting bloc at least has more sense than the conservative intellectuals of
yesteryear who saw the trade deficit as a good thing, they have not, for the
most part, asked the question that really matters, which is: Why do we have a
trade deficit in the first place?
The basic
idea behind trade is that one party gives up something for another thing of
equal value. If such a principle were followed in international commerce, one
country’s workers would never find themselves replaced by another’s, since any
imports would have to be paid for by an equal value in exports. Any jobs lost to
competition with imports would be made up for by growth in export sectors.
And that
was indeed how trade once worked, back in the days of gold and silver currency
when the balance sheets had to balance, and no country could run a trade deficit. But now, in the days of fiat money, America
can get away with running up a $900 billion trade deficit. Our country avoids
paying for its imports with an equal amount of exported goods, and it does this
by exporting fiat money instead.
The
Chinese are not to blame. It is the Federal Reserve that has replaced the
American worker.
China,
and other foreign nations, aren’t so much beating us at a trade war as they are
lending us the money to buy their own products. And it’s a strategy that won’t
last forever.
Foreign
workers are exchanging the fruits of their labours, not for an equal value of our goods and services, but for debt
that will probably never be repaid. The dollar-denominated securities that they
getting in exchange are in high demand at the moment, but eventually America
will cease to be the world’s dominant economy, and the dollar will lose a lot
of its value.
In the
long run, foreign workers stand to lose just as much as American workers. And
ultimately the blame for this lays at the feet of an economic system which has
taken the power to create wealth away from workers – namely, gold and silver
miners and the other laborers who create things for which gold and silver can
be exchanged – and put that power into the hands of central banks.
Workers
in foreign countries are being taken advantage of by the Federal Reserve. And
workers in America itself are becoming
increasingly unnecessary, because bankers can create fiat money to be exported
in lieu of actual industrial or agricultural products.
American
workers don’t need a Tariff Man to advocate for their cause. Free trade is
beneficial to everyone so long as hard money forces both sides to offer goods
of equal value. The ideas of Ron Paul offer a way out of this mess, but at the
cost of changes that neither party’s mainstream is willing to make.
The status
quo, with America as a pirate state which loots other countries’ wealth by
exporting its worthless fiat currency, is appealing to the monied interests which
control the Federal Reserve, and which own most of Congress. But remember,
pirates who live off of loot have no need for honest workers.
The choice, for the
American working man, is to either support the cause of sound money, or else
accept his replacement by the Federal Reserve.
