The various, original thirteen colonies had differing reasons for rebelling against the

British. Within each colony, there were those — many historians say as many as there
were rebels — who did not want to rebel. Indeed, at least in the beginning of the
revolution, there were as many colonists fighting for the crown as there were those
fighting against it.

Just as each colony had its particular reasons for rebelling, the individual, both for and
against revolution, no doubt had his or her own particular reasons for the choice he or she
made. In many cases the choice hinged upon the economic status of the chooser and the
means of achieving that status. I cannot say with certainty how prevalent this particular
reason for choosing one side or the other may have been, only that it was a significant
factor for many.

In private letters and diaries, as well as in public pronouncements, many of our Founding
Fathers listed the economic restrictions imposed by Great Britain, as well as tax matters
and other considerations, as evidence of the mother country’s tyranny. Whether these
economic issues emanated from the requirement that finished goods be purchased from
the mother country, even if they originated elsewhere, or that trade be funneled through
the mother country, limiting the trade contacts of domestic merchants and traders, or that
raw material be sold exclusively to British wholesalers or manufacturers, limiting
available markets, or any of a host of other economic and trade restrictions were
paramount in the hearts of the Founders, it is clear the limitations placed upon trade and
manufacturing commerce rankled.

In modern times the steady adherence to an export replacement policy by the federal
government of the United States, and the attendant, massive national debt, is leading the
United States into a long term colonial, economic relationship with the giant, emerging
producer nations of the Far East. Just as the British tried to enforce a colonial relationship
with the original thirteen states, the producer giants and creditor giants of Asia will soon
be in position, not through laws but through trade and credit codicils, to dictate and
restrict trade choices in this country.

This de facto regulatory arrangement will be far more effective and lasting than the
misguided attempts by the British to regulate by statute. This new arrangement will be,
not with a central government, but spread throughout the entire business spectrum by
individual agreements between importing and exporting entities. It will be made possible
by the coming devaluation of the dollar and the migration away from the dollar as the
effective world exchange currency.

Constant export replacement by a nation over long periods of time, without insuring the
exports surrendered are replaced by new exports of equal or greater value, is the path to
colonial status. Yet, this is precisely the policy the Unites States is following and has for
almost a century.

Milton Friedman once replied to this criticism of his belief in “free trade” by pointing out
that we, the industrialized West, were exchanging paper currency, a commodity very
inexpensive to manufacture, for goods and services of great material worth. How, he
would ask, can that be a poor exchange for the West?

Well, of course, it is not a bad trade if the “West” intends to default on the implied
promise to pay that paper currency represents. The people selling us goods and services
except dollars in return because they believe this promise, they believe the dollar has
value. If the day comes when that belief is no longer tenable then the power in the
relationship between East and West flips.

That is what has been the fatal flaw in free trade all along. It depends, if a wealthy nation
is to remain so, upon the constant replacement of any export goods and services lost to
other nations by new export goods and services developed by that nation. The
development of those goods and services is entirely dependent upon one of two things.

First, we can replace them with goods and services that emerge from higher up the
technology chain. This is what we have traditionally depended upon. This type of export
replacement is entirely dependent upon creativity and education. Creativity is dependent
upon freedom of thought and expression. Education is dependent upon both public and
private support in the form of money.

Ironically, the political right in the United States, foremost proponents of the notion of
free trade, was captured by the “supply side” theorists and neoconservatives who
advocated drastic reductions in federal, state and local tax rates and an expansionist
military policy at the same time the right made its “Devil’s bargain” with the radical
social conservatives displaced from the left by that political wing’s notions of personal
freedom. The marriage of the social and economic conservatives set the nation on an anti-
intellectual course at the same time export replacement came into full flower as the
nation’s primary foreign policy goal.

The result of this Devil’s bargain has been the slow destruction of the California public
school system, once the pride of the nation, the retrenchment of the excellent public
universities throughout the west and midwest of our nation and severe cultural criticism
of free expression. In short, the right has mounted a dual attack on the two elements
required to create and develop export replacements further up the technology chain.

The second potential source of exports to replace those lost are those produced from
older, familiar technologies. However, these replacement exports are, generally, labor
intensive and require inexpensive labor. They frequently require very low operational
costs because, being low on the technology chain, the required knowledge is now widely
disseminated throughout the world and competition can be fierce. To compete effectively
a society must lower wages and must relax other laws and regulations that increase
production costs.

When a nation arrives at a point where wages and the manner in which it regulates itself
are, de facto, imposed by external forces beyond its control, that nation has achieved
colonial status. When that day comes for us, our nation’s unwavering allegiance to export
replacement and its continued willingness to placate the economic and social
conservatives with the Devil’s bargain will severely limit our options to deal with the
future.