Pat Buchanan

Pat Buchanan

Pat Buchanan is currently campaigning to become the Republican representative in the next U.S. Presidential election. He is credited with striking a chord amongst the main stream, blue collar sector of the country. This is because he has based his economic platform on common myths about free trade and how it is the cause of the economic problems in the U.S. His theme is that layoffs and the closing of American plants are the result of foreign companies and countries taking advantage of easy access into

U.S. markets which, in his opinion, is not being reciprocated abroad. This is how he accounts for the current trade deficit that the U.S. is running with countries like Japan. Pat's economic platform regarding trade policy can be summarized as follows:

* Impose a 10% tariff on Japanese imports and a 20% tariff on Chinese imports. This would generate, in his opinion, $20 billion in government revenue and reduce the trade deficit which could be reinvested into the American economy and help create tax cuts for small businesses.

* Impose a social tariff on Third World manufactured goods to protect U.S. workers' wage rates from the foreign laborers who are paid a fraction of what their U.S. counterparts earn. He also resents that foreign companies do not have to adhere to the strict environmental, safety, and health standards that American firms do yet get free access to the U.S. market via GATT and NAFTA.

It is evident that Pat Buchanan believes that trade deficits and trade with Third World countries are at the heart of what he perceives to be America's economic problems. He feels that through tariffs the burden of income taxes paid by U.S. workers and small businesses can be shifted onto consumers who purchase foreign goods. His underlying sentiment about his trade restrictive policies is, "This is our land; America is our country; the U.S. our market. We decide who enters here and who does not."

The basis of international trade is that their are gains to be had from partaking in it. This was proven by David Ricardo, an economist in the early 19th century, who introduced the concept of comparative advantage. His theory stated that a country's "absolute advantage (overall productivity differences between countries) should be reflected in differences in income, whereas comparative advantage (variations in productivity differences by sector) will determine the pattern of international trade.