We all know the timeless account of the Salem Witch Trials. At least I believed that to be the case, along with countless other historical affirmations of what fear and ignorance can achieve with the swipe of a pen. The late 17th century town of Salem, Massachusetts devolved into authoritarian madness, not because of witches, but because of fear.
Fear is easily weaponized by cunning political authorities, legitimized through pseudoscience, and enforced through public spectacle. The trials did not purge anything but peaceful human beings. However, they did obscure the truth and silence dissent.
Salem’s leaders punished their community in the name of saving it, intellectually cannibalizing the prosperity they promised to engineer. Today, we have a new nasty old witch, one that has been accused of infecting the minds of Americans for far too long, draining their American spirit and driving the sanctity of manufacturing out of their lives: the trade deficit.
This witch, so we’ve been instructed, should be feared, denounced, and condemned with ritualistic fervor by those who aim to defend their national interest. As it was in Salem, the cost of this hysteria is not merely rhetorical, it is our economic and moral principles burning at the stake.
What we are witnessing is not an economic strategy. It is solely political theater. The strawman of the trade deficit is burned in the public square to consolidate executive power, redirect economic anxiety, and frame dissent as unpatriotic. This illusion of “protection” obscures the reality of any government’s objective: to control.
We Can’t Boom Unless They Burn
The animating fallacy behind trade deficit hysteria is the zero-sum view of wealth and opportunity. An iteration of F. A. Hayek’s poignant observation of the natural man: “The more a man indulges in the propensity to blame others or circumstances for his failures, the more disgruntled and ineffective he tends to become.”
We see this so eloquently demonstrated by the “4D chess players” that favor the view of winning at someone’s expense; both in the Executive’s wax-stamped message and the rationalization of the individuals bearing the torches and pitchforks to support it at all costs.
First and foremost, at the speedy expense of the principles that funded the demand for the grand abundance of “We The People” stickers seen on almost every middle-American highway, and beyond. Surely their abandonment out of expediency will hold true under the blue-colored regime?
With their thirst for unfaithful blood, the “America first” protectionist mob ignores the truth about the witch they so desperately despise. This thinking rejects the fundamental insight of voluntary exchange calculated by the only-knowing individual. It replaces cooperation with conquest, and markets with manipulation. It sees imports not as access to the global abundance of goods and services, but as geopolitical defeat.
Adam Smith warned, the promoted objectives of protectionist ideologies are beyond the competency of even the most enlightened ruler: “No human wisdom or knowledge could ever be sufficient for the duty of superintending the industry of private people… towards the employment most suitable to the interest of the society.” Nevertheless, today’s witch-hunters insist they can do just that. The zero-sum fallacy becomes, not just a mistake, but a tool of control.
The trade deficit is a number, an accounting identity that reflects the voluntary exchange of value. This means—innate to the economic calculation of the individual—what is being bought with US dollars provides greater value to those individuals than does the US dollar. Trade deficits have consistently aligned with periods of rising wealth, technological advancement, and consumer empowerment as the principles of comparative advantage and specialization hold true.
Proponents of the state’s trade deficit mirage justify the loss in well-being and success of their American neighbor through the state’s ensuing tax policies (tariffs), supposing their own gain can only come through the mandatory sacrifice of their neighbors’ loss.
It is the zero-sum fallacy wrapped in the comfort of their flag, a false dichotomy equally promoted by both the economic and authoritarian left. These are no different in kind from the progressive socialist ideologue who seeks to weaponize government to validate their victimhood, believing wealth is a fixed pie to be redistributed by force. But the devotion to this fallacy is not a novel delusion. Adam Smith also observed:
To hurt in any degree the interest of any one order of citizens for no other purpose but to promote that of some other, is evidently contrary to that justice and equality of treatment which the sovereign owes to all the different orders of his subjects.
The right-wing proponent of this economic fallacy—no matter how loudly they cry “freedom”—betray the liberty they claim to defend, conceding their sovereignty to the state’s power to punish the faux adversary their ruler has accused, only to become a victim of the sleight-of-hand.
They naively feed the pigs on that farm who are responsible for the stifled mechanics of a free market to begin with, misplacing their anger for the effects of bureaucratic wisdom onto the natural cooperative system that, heretofore, has sustained their well-being through those very effects. They allow the state to mask their intellectual insecurity behind tariffs and trade barriers and increase the fanning of the flames of their power.
The Strawman for Political Power
Political actors—particularly those seeking populist leverage—portray trade deficits as theft, failure, or decline on fictional leaderboards. This mischaracterization does indeed serve an orchestrated and calculated purpose: it constructs a villain that justifies greater political power.
It is easier to rile up voters against a fabricated villain than to explain the simple mechanics of trade. It is easier to claim foreign producers are “stealing” American prosperity than to confront the fact that American consumers are choosing to purchase the goods being traded as a result of prosperity. This illusion presents the opportune justification for top-down correction. A government inquisition to recalibrate commerce toward political ends, and further away from the economic merit in consumer sovereignty.
Tariffs imposed in the name of national interest strip consumers of their right to choose. Prices rise; options shrink; quality suffers. These are properties of an artificial monopoly only Uncle Sam can institute. The principle that individuals should determine market outcomes by their preferences and purchasing power is replaced with political propinquity. It is a witch’s brew of authoritarianism, cloaked in the rhetoric of patriotism.
By positioning the trade deficit as an attack on yesteryear’s quality of life, leaders attempt to frame themselves as saviors. They capture the license to pick the winners and losers that dictate domestic priorities. Surely, those who want to win at this game will play by the rules that prioritize the judge. The long-run result is a less competitive, less innovative, and more politically dependent industrial landscape.
It is policy crafted, not from principle, but from opportunism. It treats the public, not as free agents, but as emotional instruments to be played. It exploits the language of protection to impose economic vulnerability and instability to further their influence over our individual ambitions and designs.
Jean-Baptiste Say gracefully informs us, “If one individual, or one class, can call in the aid of authority to ward off the effects of competition, it acquires a privilege to the prejudice and at the cost of the whole community.”
In doing so, it aligns the populist right with the authoritarian left. Both claim the ideal social order. Both believe the most prosperous economic outcomes must be centrally planned, rejecting the spontaneous order of the individual to serve the vision of the state. They are not opponents. They are reflections of the same sophistry. Cue horseshoe theory.
As Frédéric Bastiat said, “Why are people so attached to protectionist regimes? Because freedom is bound to provide the same result for less work, this apparent reduction in work terrifies them.”
Avoiding the Stake We Help Build
In light of the flames climbing the stake, the trade deficit debate is not an argument over economics, the mercantilists took that one for the team. Rather, it is an admonition to shake ourselves free from the hypnotic perpetrators of the real witchcraft: the state.
Are we willing to destroy the principles of the pursuit of happiness in pursuit of populist illusion? The trade deficit is not a problem. The problem is with those who exploit its mere informative appearance to grow their power, at the cost of our liberty, our choices, and our future.
We must reject the scapegoating of trade partners, the denigration of consumer choice, and the economic nationalism that masks a hunger for power, for both the representative and those he represents. By definition, economic freedom cannot be selectively applied. To do otherwise is to naively participate in a modern witch hunt, a spectacle of fear, a ritual of control, and a betrayal of the freedom we claim to cherish. A witch hunt that does not preserve a nation, but will burn it.
