Don't break the trade
On the Great Depression, wind energy, and the fragile value that keeps one-quarter of the world's economy on top
Lots of things have made the United States wealthy. Some have resulted from good luck, but many (if not most) have been the results of policy choices. We have 4% of the world’s population and 25% of its economic activity.
■ One of the key factors in America’s vast wealth is that we act like an enormous free-trade zone. Each state is free to take on its own character, and we are free to trade across borders without undue burdens.
■ Iowa produces massive amounts of pork, insurance, and wind energy. California makes movies, vegetables, and Internet services. South Carolina delivers textiles, peaches, and cars.
■ The nature of our economy assumes that everyone is able to conduct themselves freely -- not just economically, but in general. There’s the Equal Protection Clause of the 14th Amendment to see to that. Commercial success depends quite fundamentally on that freedom: Our ability to travel for work, to buy and sell goods and services across state lines, and to move to where opportunities are found all depend on a basic assumption that we are free to go about our business without being harassed -- and so are our neighbors in other states.
■ Chip away at that armor, even just a little bit, and you risk breaking everything. That would impoverish everybody -- perhaps not quite overnight, but more likely in a cascading downward spiral. Antagonism spreads like a cancer. History warns us: A collapse in global trade accelerated and severely worsened the Great Depression, leaving the whole world much poorer.
■ The US economy today is many, many times bigger than the entire global economy leading up to the Great Depression. This means we’re capable of equally self-destructive behavior as what led to that depression, even if we’re only making policy choices that seem to be only for ourselves. The economic system is quite robust, but trust is extremely fragile. And if trust is broken in ways that crack the smooth operation of our gargantuan free-trade zone, that could sink the ship.
