Tuesday, December 21, 2004

Trade and Defense

One of the arguments given by students this semester in answers to questions dealing with whether or not there should be restrictions on trade involved the national defense argument.

While generally acknowledging the logic of free trade protection of jobs and national defense were often put forward as reasons to give up the benefits of free trade.

However, this is not a very good reason as, historically, nations have imported the weapons and other material needed to wage war. During the American Revolution the Continental Congress sent Benjamin Franklin, Thomas Jefferson and others to Europe to negotiate loans from foreign banks and governments and then used the proceeds to purchase weapons to fight the British. Franklin obtained from France the ship, renamed the Bonhomme Richard, in which John Paul Jones took on and defeated the British ship Serapis, in a battle that is celebrated by the U.S. Navy to this day. The U.S. loaned England and France money to purchase weapons, food and other material to fight the Germans in World War I and the U.S. eventually entered the war partly as a result of German submarines trying to stop the U.S. trade with England by sinking our ships. In World War II it was trade, including large amounts of weapons, with the U.S. that kept England from being overrun by Germany. We also kept the Soviet Union supplied with weapons, food and other supplies that enabled them to continue fighting the Germans during World War II.

In recent years armaments have been a major U.S. export (also a major export for other countries like England, France, Russia, Brazil, Israel, etc.). The weapons used by Saddam Hussein against our recent invasion of Iraq were all obtained by trade with other nations and part of the current ill feelings between the U.S. and France and Russia is our belief that they opposed us in the U.N. Security Council is because they stood to lose Iraq as a customer for their weapons if we overthrew Hussein.

One of the reasons given for the Japanese attack on Pearl Harbor was our government's ban on the selling of scrap metal to Japan. But ironically, while Japan went to war against us because we cut off a resource needed for their war effort, the lack of scrap metal from the U.S. is never given as a reason for their losing the war. Similarly, the Japanese cut off our access to rubber (needed for tires for planes and military vehicles) and silk (needed for parachutes) two goods we could not produce but needed for our military. To make up for the loss of these natural products we invented synthetic rubber and nylon a synthetic substitute for silk.

So, while there is a certain surface logic to the idea of being self sufficient in defense production, the reality is that most nations obtain large amounts of war material during war time via foreign trade rather than via domestic production.

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