Review: Pat Buchanan’s The Great Betrayal

By Hunter Wallace

First published in 1998, Pat Buchanan’s The Great Betrayal: How American Sovereignty and Social Justice are Being Sacrificed to the Gods of the Global Economy remains hands down one of the best books ever written on American economic nationalism.

I can honestly say that no other book has had a greater impact on my economic views. This is the book that Donald Trump should have written for this election cycle. Unfortunately, Trump can’t hold a candle next to the depth of Buchanan’s critique of free-trade and open borders. Pat Buchanan, who should have been elected president in 1992, 1996, or 2000, explains in comprehensive detail why countries like China, Japan, and Mexico are “killing us in trade.”

Take my advice: if you ever buy one book after reading the reviews on this website, this one should be it. It’s that important.

17 years and two failed presidents later, I reread this book and was disgusted to see Buchanan condemning the $40 billion dollar trade deficit with China in 1996. Instead of the US withdrawing from the WTO, China was brought into the WTO in 2001. The trade deficit with China was only $40 billion in 1996, which was outrageous, but now it is over $350 billion in 2015. The US national debt has exploded from $5.2 trillion in 1996 to almost $19 trillion in 2015.

I’ve already shown how free-trade has decimated manufacturing jobs in the South since 1994. In 1998, Buchanan was calling for the US to reverse course in light of the previous 25 years of job losses and stagnation in real wages, which has continued unabated for the last 17 years. Also, the level of US household debt in 1996 would be a major improvement over what it is now in 2015. I won’t even bother to point out how much the illegal immigration problem has grown since American voters chose Clinton, W., and Obama.

Essentially, Pat Buchanan’s The Great Betrayal is a grand tour of the economic and trade policies practiced and preached in the United States from 1789 to 1933, which are compared and contrasted with the policies the United States has practiced and preached from 1933 to 2015. The shock value of the book lies in fact that the United States became a superpower by rejecting the free-market, free-trade, laissez-faire prescriptions of classical liberal economists.

From 1816 until 1933, Americans rejected the free-trade theories of Adam Smith and his even more radical successors like David Ricardo and Jean-Baptiste Say. American policymakers didn’t think much of the “idiot savant” economists of Europe whose policies had never built a great nation and who incorrectly believed that the United States was destined to be a poor, agricultural country “like Poland.” Even Thomas Jefferson and James Madison came to see the wisdom of Hamilton’s economic program after the disastrous War of 1812. It was Madison and the Jeffersonian Congress that abandoned free-trade in 1816.

Along the way, the reader is introduced to Alexander Hamilton and the “American School of Economics,” Henry Clay’s American System which was implemented by Lincoln and his successors, and influential economists like Daniel Raymond, Friedrich List, Hezekiah Niles and Henry and Mathew Carey who have been airbrushed out of American economic history. We also meet Joseph Wharton, the founder of the Wharton School of Business at the University of Pennsylvania, whose name may ring a bell from the current presidential campaign:

“Pennsylvania steel manufacturer Joseph Wharton saw his country in a mortal struggle. “Foreign legions,” he thundered, are attacking us with “missles launched from their far-distant mines, mills, and factories … Their attack has offen devastated homes … and broken up industries as effectually as if the conquest had been effected by warlike weapons.” America had a better defense. A “tariff can defeat the foreign plunderer … better than a fort.”

Free trade, to Wharton, was “a fungus … a source of infection which healthy political organs can hardly afford to tolerate.” In National Self-Protection, Wharton argued that any price hikes due to tariffs are only transitory. Imported steel rails from England had cost $165 in gold per ton in 1864, he wrote; five years later, behind a protective tariff, a U.S. steel rail industry was producing all of America’s needs for $80 per ton. An implacable Anglophobe, Wharton “raised a clenched fist against England”:

“We shall take for ourselves, without asking her leave, the same privilege of consulting our own interests and doing our own thinking. We shall grow in strength and national completeness and independence, despite the groans of the Cobden Club, after England shall have distinctly failed at grasping at universal domination through trade. We decline to be her victim or her imitator.”

For progressive Republicans, Wharton had only contempt. “The Republican Party cannot afford to be anything but distinctly Protectionist,” he said. “Republicans who are shaky on protection are shaky all over.”

According to Donald Trump, you have to be really smart to get into the Wharton School of Business. Did Trump ever read Wharton’s National Self-Protection while moonlighting in the UPenn library?

“There is no job that is America’s God-given right anymore. We have to compete for jobs as a nation. Our competitiveness as a nation is not inevitable. It will not just happen.”

– Carly Fiorina, 2004

“This country will not and can not prosper under any system that does not recognize the difference in conditions in Europe and America. Open competition between high-paid American labor and poorly paid European labor will either drive out of existence American industry or lower American wages.”

– Future President William McKinley, 1892

“There is a transcendental philosophy of free-trade, with devotees as ardent as any of those who preach the millennium … Free trade abjures patriotism and boasts of cosmopolitanism. It regards the labor of our own people with no more favor than that of the barbarian on the Danube or the cooly on the Ganges.”

– Rep. Justin Morrill, 1860

It was the economics of Hamilton, Clay, Lincoln, Raymond, Carey, Morrill and McKinley that made the northeastern quadrant of the United States – the area from Missouri to Massachussets, north of the Ohio River – into America’s industrial heartland. That’s what made the United States the wealthiest, most powerful nation in the world in 1945.

The story of its downfall traces back to President Woodrow Wilson and FDR’s Secretary of State Cordell Hull, who more than any other figure, was responsible for America’s shift to free-trade. Wilson’s Fourteen Points envisioned the globalist utopian world order of the classical liberal economists that was created in a series of stages after the Second World War, but it was shot down by Republicans in Congress who defeated the League of Nations and International Trade Organization.

The second liberal world order (Britain had led the previous one from 1860 to 1932) was built and implemented by the United States after the Second World War. By the Eisenhower administration, the free-market, free-trade laissez-faire doctrine had become orthodoxy in both political parties. More than anything else, this was due to American leadership of the “free world” and the strategic use of trade policy for geopolitical reasons to contain and fight the Soviet Union and its allies.

By the time The Great Betrayal was published in 1998, GATT had evolved through the Kennedy Round and Uruguay Round into the WTO. NAFTA was passed, went into effect in 1994, and was already starting to bear its bitter fruit. None of Buchanan’s proposed reforms ever saw the light of day and 17 years later the Republican Congress granted “fast track authority” to Barack Obama which reversed the lone protectionist victory during the Gingrich era.

17 years later, we are still trying to build Richard Cobden’s world of global free-trade with the Trans-Pacific Partnership. As the economic distress of America’s middle class and working class continues to mount, the issues raised by Buchanan in this book warrant a new hearing.

17 Comments

  1. I never before read or heard anyone affix blame for this alleged economic disaster to Cordel Hull. This seems odd, but gives me something new to look up.

    Trump vs. Pat Buchannan presents a false paradigm. Trump is a businessman with a complex career, but one not atypical of businessmen in our capitalist paradise. Buchannan may be an ideologue, but is also an intellectual.

    I can assist you with an aspect of your analysis. Wharton is a business school that almost never has any relevance to an undergraduate at Penn. I am told by one of my children- who knows since they attended an Ivy League School, the misuse of “Wharton” is an especial pet peeve by those at the other seven Ivies. This goes along with their general disdain of mere “Penn” and “Brown” as being the bottom rung of the Ivy League. Of course, that bottom rung is still looking up from pretty much anywhere I ever studied.

    Further helpful note. If you put your ear to the Ivy League ground you will now hear even louder than before the cries of Trump not being a “real” Ivy Leaguer. I refer to the fact he transferred to Penn after two years at another college. Fordham, I think. Whether or not this sounds like some monkish clerical dispute, it that world it has real meaning. In one of the Ivy League schools most detested by Brad, Columbia University, Obama is NOT viewed as a genuine alum because of his transfer in from the (to them) rather pedestrian Occidental. In another of life’s little oddities, amongst the rarified liberal atmosphere of Columbia you will hear statements and theories about Obama’s time at Columbia not entirely dissimilar from an OD blog run!

    Nice place up there in Morningside Heights. At least nice these days. Personally, I lean towards the safety of Hanover. And you gals would love the color, LOL!

  2. Nice review. You’ve got enough material on OD at this point for 3 or 4 books yourself.

    I agree that on an intellectual level Trump is no where close to Pat’s league. Pat of course was destroyed by the same forces going after Trump right. The cuckservatives of that era.

    • On that point I think we find common ground.

      Let me provide a sincerely polite addition. In my experience the only thing taught at MBA programs is that making lots of money is a positive end unto itself. I am sure studying for a PhD in economics would offer an entirely different perspective, but I think Brad and I are in accord that learning in American business schools centers around going out to make enough money to keep the prestige of the B school as high as possible.

      • Brad. Be careful lest your admirers and fellow travelers learn about the attitudes of our Founding Fathers and Hebrews.

      • Brad:

        May I hit one into your ballpark?

        One of my principal criticisms of Capitalism, lawyers, tax laws, accounting principles can be found in the following paragraph out of (I think) the WSJ:

        “For example, when Burger King bought Tim Horton’s last year and created Restaurant Brands International , it borrowed $3 billion from Warren Buffett at a seemingly high interest rate of 9%. But because Buffett’s financing was consigned as preferred equity, it was able to keep the debt off its balance sheet, such that its debt came in at 5 times its debt-to-EBITDA ratio, lower than the 7 times it otherwise would have been…”

        I understand the abbreviations, but not so much the law. What I do get as issue spotting is that a situation that in real life (all things being equal stuff) ought to be very negative and fundamentally unsound is altered by tax regs and other statutes into a positive. Yes, the purpose of tax regs is often to do this & often for laudatory or at least “good” purposes. But this only works if everything throughout is punctiliously maintained on an even playing field. An alteration can devastate the economic situation.

        An example that comes to mind in the limited experiences I can really grasp was when in the 1980’s significant changes were passed that changed the benefit of most single asset limited partnerships. Investments that made sense overnight became anchors. The losers were not the limited partners who enjoyed tax benefits and shelters. The losers were people who, e.g., lived in so-so apartment complexes that were no longer of use to the Partnership.

        Your view?

        [To your compadres: Tim Hortons is a fast food chain in the Great White North. My first discussion with a late, bagpipe playing wrestler was in a Tim Hortons. In fact, my first conversation with about two dozen pro wrestlers was in Calgary area Tim Hortons! Most, not all nice guys. I do feel sorry for one of the truly “not nice” ones. He scared me. But I digress.]

  3. Since your present research seems to include a look at the East Asian economies, I’ll say you might want to look at the following:

    https://books.google.com/books?id=60tHAQAAMAAJ&printsec=frontcover&dq=Must+we+Fight+Japan?&hl=en&sa=X&ved=0ahUKEwiS1Zuvhs7JAhUDYiYKHSSXD78QuwUIIDAA#v=onepage&q=Must%20we%20Fight%20Japan%3F&f=false

    That’s MUST WE FIGHT JAPAN?, a 1921 book by an American named Walter B. Pitkin. I myself have read only its first two hundred or so pages, but those were enough to impress me with the clarity and detail of Pitkin’s understanding of Japanese and American conflicts of interest, two decades before Pearl Harbor.

    Wikipedia’s (brief) entry about Pitkin is at the following:

    https://en.wikipedia.org/wiki/Walter_B._Pitkin

    The book appears to have been prompted by problems that culminated in the California Alien Land Law of 1920. Wikipedia treats that at the following:

    https://en.wikipedia.org/wiki/California_Alien_Land_Law_of_1913

    Historically related to that is the Gentlemen’s Agreement of 1907, which Wikipedia treats at the following:

    https://en.wikipedia.org/wiki/Gentlemen%27s_Agreement_of_1907

    All of this might be off-topic, re your project, but I thought I’d mention it.

  4. The Jew Mayor of St Petersburg FL just banned Donald Trump from entering St Petersburg, FL – an American city – on behalf of brown Muslim invading Jihadis. It’s the Moorish invasion of Spain all over again!

    • Denises. I vehemently object to your use of “Moor”. I’ve always preferred Saracen(s). I believe it was also more widely used, as well as being useful to stoke the (false) Crusader trope. False in that it has been absurdly misstated by Muslims and ignorant Westerners.

      You know, but for Saladin I bet the Third Crusade could have kicked butt.

  5. Denise
    ‘The Jew Mayor of St Petersburg FL just banned Donald Trump from entering St Petersburg, FL – an American city – on behalf of brown Muslim invading Jihadis.’

    He should schedule a campaign rally in St. Petersburg at a location near the Mayor’s office.

    It would be a yuge event.

  6. The value of Free Trade has always been dubious. And the idea that the United States of America with its giant landmass and ample resources requires trade at all is dubious. The best economic time that America had was when after WWII the men returned to industry and the women went home to have babies. With the rest of the Western style countries bombed out and in ruin, America was able to grow its industrial base to provide for the needs of virtually the Entire World. This shows we need no trade at all. If America can supply the Entire World with goods by itself we need zero goods from other countries. Anyone who implies trade makes us any friends should notice China still does not consider us its friend.

  7. Pat Buchanan would have been the best president this country had in a century. The best men are not allowed to get elected.

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