Monday, May 27, 2019

Interview: Dave Nalle says free trade "really only requires confidence in the forces of the market"

Editor's note: This interview was originally published in March 2017.

Story by Joseph Ford Cotto

“Long on the fringes of American politics, small-government conservatives were closer than ever to mainstream acceptance,” Politico Magazine’s Tim Alberta wrote in a recent story. “Then two things happened: Donald Trump and Jihadi John.”

Alberta went on to mention that “(t)here are areas, certainly, in which Trumpism and libertarianism will peacefully co-exist; school choice …. is one example. Deregulation is another. But by and large, they cannot be reconciled. Where libertarians champion the flow of people and capital across international borders, Trump aims to slow, or even stop, both. Where libertarians advocate drug legalization and criminal justice reform, Trump and his attorney general, Jeff Sessions, seek a return to law-and-order policies. Where libertarians push to protect the First and Fourth Amendments, Trump pushes back with threats of banning Muslims and expanding the surveillance state.”

Is our new president really so adverse to libertarian ideals? If this is the case, he is in marked disagreement with one fellow he has spoken highly of on several occasions.

“If you analyze it I believe the very heart and soul of conservatism is libertarianism,” President-to-be Ronald Reagan told Reason’s Manuel Klausner in 1975. “I think conservatism is really a misnomer just as liberalism is a misnomer for the liberals—if we were back in the days of the Revolution, so-called conservatives today would be the Liberals and the liberals would be the Tories. The basis of conservatism is a desire for less government interference or less centralized authority or more individual freedom and this is a pretty general description also of what libertarianism is.”

Within the Republican ranks, one group stands unabashedly to oppose not only the Donald, but any other politico who discards libertarianism.

“The Republican Liberty Caucus is a 527 voluntary grassroots membership organization dedicated to working within the Republican Party to advance the principles of individual rights, limited government and free markets,” the RLC declares on its website. “Founded in 1991, it is the oldest continuously-operating organization within the Liberty Republican movement.”

Dave Nalle is the former vice chairman of this caucus. He stepped down to be a regional director late last year because of the RLC’s internal disputes over public support for Trump -- or lack thereof. Nalle, who backed Libertarian Party nominee Gary Johnson, the former two-term New Mexico governor, has always had a strong independent streak. I saw this firsthand when he was my section co-editor at Blogcritics Magazine several years ago.

Nalle has also built a career in the business world. The founder and owner of Scriptorium Fonts, he might be to thank for the style of text you often see in advertisements or use in a word processing program.

I recently spoke with Nalle about many issues relative to libertarian Republican politics. Some of our conversation is included below.


Joseph Ford Cotto: Prominent economists and politicians often say that free trade will benefit America in the long run. Many Americans disagree strongly. What is your take on this situation?

Dave Nalle: Have we ever had truly free trade? In situations when we have "freer trade" we see prosperity grow.  Many people don't trust free trade because they think that it involves trust in other nations and they rightly assume that other nations have their own interests and they don't match ours.  But it really only requires confidence in the forces of the market.  

Nations which take punitive measures against other countries invariably suffer as much or more themselves. Every transaction is a two-way deal and there are opportunities to profit for both parties if we allow them to take advantage of them.  What Adam Smith described as the "invisible hand" is a powerful force.  It is the aggregate economic interests of all of the elements in the economy from consumers on up and it can guide you to success if you let it or slap you down hard if you try to go against it.

Cotto: Libertarian economic theorists tend to believe that trade deficits are of minimal importance. Do these deficits really have a great impact on America's economy?

Nalle: If you have a deficit in trade that means you are doing more buying than selling as a nation.  But we make profit on goods we buy as well as on goods we sell.  In a complex international economy profit is being made all along the way in the manufacturing and distribution chain.  People think of it like a household budget where if you spend more than you make you have a problem, but it's really nothing like that.  

If we import more goods then there is profit being made in transportation, marketing, sales and support for those goods and you get a lower price for consumers who have more buying power.  The American economy has always been a consumer driven economy and there is really nothing wrong with that. Consumers rule the market and consumption is the engine that drives it.

Cotto: Since it went into effect during late 1995, the North American Free Trade Agreement has formed a trilateral commerce bloc between Canada, the United States, and Mexico. From your research, has this proven to be of benefit to our country?

Nalle: Yes.  It has lowered prices for consumers and given us access to new markets.  In addition by helping the economies of our partner nations it has strengthened their economies and made them better trading partners, created jobs across the board and lowered prices for consumers.  It has increased the volume of regional trade enormously and regional trade is more efficient than trade outside the region.  In about 20 years NAFTA is estimated to have quadrupled the amount of trade between the partner nations, far more than the rate of general economic growth in that period.  

A lot of libertarians won't agree with me on this because NAFTA is not really free trade, but there is a tendency to make the perfect the enemy of the good.  Would true free trade be better?  Absolutely.  But NAFTA is considerably better than nothing and it is in place and it works.