As I've commented over at 'The Economic Nationalist' site, Dr. Ravi Batra's , "The Myth of Free Trade", stands alongside Buchanan's "The Great Betrayal" as premier texts in the contemporary protectionist movement with me. I have read "The Myth of Free Trade" more than once and have copious notes in the margins such as "hurray!" and whatnot. Ravi Batra's program is domestic competitive protectionism and expends a great deal of time in all of his texts tearing the theological laissez-fairist's arguments apart quite convincingly.
But something happened to Batra from the publication of The Myth (1994) to the 21st Century and it is disappointing.
Though Batra's last two books - "Greenspan's Fraud"; "The New Golden Age" - maintain his basic economic doctrine as in The Myth of Free Trade, he no longer supports a tariff-based trade system though he remains a staunch critic of the current abortion that some call 'Free Trade'. On page 180 of The Myth, Batra writes in no uncertain terms - "Tariffs are the best way of granting protection. They are simple and easy to administer and also produce ample revenue for governments strapped by budget deficits". Then Batra writes in total contradiction to this above in 'The New Golden Age' - "These are the days of globalization, and the whole world is interlinked by trade. Tariffs would start a trade war, and immediately impoverish everybody. Besides, they are not permitted by the World Trade Organization, to which our nation is committed." (page 204).
Batra now proposes of pegging the dollar to the Yuan & Yen for a fixed-rate export price where somehow in the process(he is hardly clear) the trade deficit gets bottomed out with no inflationary costs, and China and Japan is buying Yankee made products as much as we here are buying theirs. What he doesn't write is that Chinese consumers can't afford imports anyway and neither do they want them, neither will their government ever un-protect itself(why should they?), and neither will the Japanese. We are a post-industrial country with little to export overseas anyway largely because of globalism. Without protective tariffs to earmark funds therof for re- industrialization, how can it export goods now? We have almost zero electronics , textiles to export, and our big ,huge SUVs and trucks - few humans outside the United States want them, and can't afford them if they do. Asians and Europeans like small vehicles and they have to buy small. Besides, the engineering quality of US Autos leave something to be desired for the past three decades.
Even if Batra's currency manipulation arguably 'worked', where are the US export industries?? He has an answer - raise corporate taxes. I am privy to this, but raising taxes on the Overclass alone will not get them away from high speculative financial wheeling and dealing and turn them back into the captains of industry as they used to be. Raising taxes on the Ueber-wealthy alone will only make them save a bit more of their own money, and they most likely will not use it to invest in hard capital. With tariffs and public encouragement from the revenue accumulated from them, it sends a message to the Overclass :'invest in hard industries again and we will protect you'. A high tax on the upper 10% or so should be in a sense, voluntary: "invest in hard capital or pay". To me this is a good bargain given that we all know how the wealthy would rather throw money into the ocean rather than to use it to pay taxes. But to Batra, high taxes alone will get them more economically responsible, and that is just balderdash.
Batra contradicts himself when he wrote in "The Myth" that inflationary spikes from tariffs are largely fear-mongering from the free-traders given that in the 19th Century when we had steep tariffs, prices remained relatively stable; America's biggest rises in inflation came the same year that it officially went to Free Trade, 1973. Dr. Batra spent practically an entire chapter in his "The Myth of Free Trade" documenting that high volumes of international trade naturally expends fossil fuels and increases pollution, and admonishes nations to be as regional as possible in trade for this obvious environmental reason. Tariffs, he believed then, were ecologically sound because they would have a reduction in global trade(tell that to Al Gore who is both a Free Trader and an ecological mandarin) and better jump- start countries to localize their own industries. He forgot all of this in his latest book and has joined the hand-ringers and those who think that they can manipulate currency exchanges to get balanced trade. Batra needs to remember that that is what the Bretton Woods post WW2 system attempted to do, and it crashed in on the USA in the late 60s and we have this mess now just because of an entire generation of tariff-phobic economists and the dimwit politicians who listen to them. Batra also seems to have co-opted 'comparative advantage' as well - he should know better!
I wrote Dr. Batra a cordial email, asking if he could explain his turn-around on tariffs. Even better yet, I gave him the addy to 'Left-Federalist' to comment here on the subject if he would be so kind to instruct those who read this blog, better clarify his position. I still am gaga on his plan of 'competitive domestic protectionism', but I can't conceive of it manifesting without the implementation of tariffs - something that he was once a believer in too. Plus, Batra's surrender to the global trade entanglements is quite a letdown since I have recommended him to fellow economic-nationalists before. The Myth of Free Trade remains in its present hierarchy with me, but I cannot think otherwise that Dr. Batra has become another economic -Laodicean. He is not the first economist to change his position(s),but usually when economists do so, they go into detail why they have done so(such as when John Maynard Keynes wrote his long, "The End of Laissez-Faire", explicitly explaining why he rejected Free Trade after being one of its typically British proponents). Batra neither goes into detail for his change on tariffs, and neither does he mention in his latest books that he once was a tariff-advocate. A novice reader of Batra would get confused quite soon if he/she read 'The Myth of Free Trade' after reading his latest two books.
Ravi Batra owes his readers and fans an explanation.