Tariffs and National Self-Sufficiency

tions is found in the conflict between our foreign aid program and our tariff policy. On the one hand, we give vast sums of money to a nation to help it "get on its feet" and produce for export-to alleviate its "dollar shortage." On the other hand, we raise barriers in .the form of tariffs and other trade restrictions to prevent the importation of their products to our country. Loans by individuals or firms in this country to for eign industries are an entirely different matter. In such cases, individuals may appraise the risks they wish to take with their own money. And all this, of course, has nothing to do ~ith private charitable gifts which Amer ican citizens may wish to make to people of foreign nations. Tariffs and National Self-Sufficiency It will readily be recognized that the topics under which tariffs are here being discussed are not entirely exclusive of one another and overlap to a considerable extent. The argument for self-sufficiencyis closely allied to the level-of-living argument, and it will also be dis cussed later as an important part of the national de fense argument.

National self-sufficiency is sometimes expressed as "economic nationalism," "isolationism," or the "keep the money at home" idea. The argument is that we would be better off, as a nation, if we did not trade with other nations. We would develop our own resources more fully; we would encourage domestic employment; and we 53 would not become dependent on other nations for goods and services. On the question of dependency, it should be recalled again that trade is a two-way project. For example, if we gear our industry to the use of imported lead, we are, of course, dependent on foreign production of lead. But the foreign producer is just as dependent on our market for whatever he receives in trade· for his lead. It is not a one-way street. One might as well argue that the automobile worker in Detroit should not be dependent on the farmer for his food, nor the farmer dependent on the Detroit worker for his automobile. The farmer is as dependent on the automobile worker for his market as the automobile worker is dependent on the farmer for food. It is as logical to argue self-sufficiency for an individual as for a nation. As a matter of fact, the type of dependence engendered by free trade between individuals is a whole some thing. So long as it is voluntary trade, friendships develop. Such trade is not a battle between opposing forces, as is sometimes claimed. Witness the friendships between the customers and the tradespeople in a small community.

We have already seen that a farmer, or a small group of people, may approach self-sufficiency, though at a very low level of living. But self-sufficiency is incom patible with technology, division of labor, and specializa tion in modern society. It is possible for a nation to follow a "keep the money at home" policy, but the level of living of the nation will 54 suffer as a consequence of thus rejecting opportunities. The principle of comparative advantage cannot be wished away by means of international trade barriers. Few areas are as favorably adapted as the United States to a relatively high degree of self-subsistence. We have the agricultural resources to support a large popu lation. In addition, we have iron, coal, oil, and other resources with which to develop our industries. But still we feel we must buy industrial diamonds, tin, tungsten, and many other products not found here.