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.