QOTD: Newt

shiver ....

“I basically agree with Trump’s speech on trade."

In sharp contrast to the approval of Clinton's economic package last summer, which was passed without the vote of a single House Republican, Minority Whip Newt Gingrich (Ga.), usually a confrontational leader, rallied House Republicans to support NAFTA. "This is a vote for history, larger than politics, larger than reelection, larger than personal ego," said Gingrich, who is to be his party's House leader in 1995.

INTERVIEWER: Philosophically speaking, what was the wellspring of your ideas? Were you influenced by people like Friedman or Hayek?  

NEWT GINGRICH: No, I think I was influenced more by Adam Smith and by the founding fathers -- Jefferson, Adams, Madison, Hamilton, Washington -- and to some extent by the Whig historians of the 19th century. I was very much influenced by Goldwater's "Conscience of a Conservative" and by Reagan's speeches starting with "A Time for Choosing" in October of 1964. I actually came to Hayek backwards through Reagan, rather than the other way. In my mind, at least, what you had was a clear overdevelopment of the state in the 20th century as a vehicle for humans to organize their lives, so you needed a party of freedom that was committed, almost in the British 19th-century liberal tradition, to argue for personal choice for markets, for private property rights, and for taking Bismarck's insurance state and transferring it into a personal insurance system, as we're trying to do now on social security. 

What I saw was a deviation from the long 18th- and 19th-century rise of freedom in the Whig tradition with four different patterns: the regulatory state in response to industrialization, where Theodore Roosevelt is probably the leading American developer of it; Fabian socialism with its British class warfare style, which never fit America, but the underlying anti-wealth, anti-achievement patterns did, [such as the] distrust of private property and private activity; third was Bismarck's insurance state, which gradually spread across the industrial world and which is essentially right if you can organize it so that people are insuring themselves rather than as a paternalistic bureaucracy trying to take care of you; and then finally, with Ludendorff's war economy in Germany in 1917, you really get what shapes John Kenneth Galbraith and a whole generation of younger economists, including Keynes, and that is the power of the state for a very short time to mobilize power and wealth remarkably. What they didn't realize was that while you can do that for about the length of the second world war, which in the American experience is not quite four years, if you do it much longer than that, it creates its own internal distortions. [This] is exactly what Hayek writes about it and what Smith understood: that a combination of politics, bureaucracy, [and] the distortion of power in the long run is radically less effective than the market as a place to allocate resources. So you had, from 1917, compounded by Leninism and then by Maoism, this affection of the left for the state as an organizing system, which when I was a young person in the late '50s was really close to its peak. There was a sense [that] this is the intelligent, sophisticated future, and those of you who favor free markets and private property represent this obsolete past. What all of us who believed in freedom felt was that in the long run centralized commanding control systems decay and collapse, and that's a historic pattern. You have to concede at least that Reagan was far more right than most of his left-wing critics in his understanding of the Soviet empire and the fact that in the end it just couldn't keep functioning. 

INTERVIEWER: Do you make a connection between free markets and personal freedom, personal liberty? 

NEWT GINGRICH: Absolutely. In fact, so did all the founding fathers. That goes back to the English Civil War, which is really the wellspring from which the American model of freedom emerges. It is the English Civil War and the effort of people to protect themselves from judges who are instruments of the state, not instruments of justice, to protect themselves from troops in their houses, to protect themselves from the king's right to kill you. And it's out of that English Civil War that you begin to have the rise of what we now call freedom, [the] first truly mass democratic societies in history, even more than the Roman republic. I think it's inextricable if you read Locke, if you read Jefferson, if you read the founding fathers, it is inextricable that if you don't have the right to private property, if you don't have the right to trial by jury, if you don't have the right to vote and fire the people to whom you loan power, you don't have freedom. The idea of a socialist free society in the long run, as Hayek points out, is an impossibility. 

INTERVIEWER: How did you deal with conservatives in your party who opposed NAFTA? 

NEWT GINGRICH: It wasn't necessarily conservatives. It was more protectionist versus free market. Many of the most conservative members of our party are very free market and were Reaganites, and so they were for it. Our big problem was to try to narrow down the number of folks who [were against it] either because they had textiles or they had something [like] tomatoes in Florida. There were a number of very specific problems, and what we tried to do was either find [a] solution or sweet-talk them. You didn't always win, but we were able to with tremendous help from the business community, an effort that was led by Ken Cole at Allied Signal, there was just a brilliant grass-roots effort and really the most effective I'd worked with, frankly, in Congress. We were able to get across the notion that in the long run you were going to have lower prices in the U.S., more jobs in the U.S., and that if you're going to have overseas production, it's better to have it overseas in Mexico than have it overseas in Thailand or China.

INTERVIEWER: Why?

NEWT GINGRICH: Because it increases the wealth of your nearest neighbor, and it's very much to America's interest to have a healthy, productive Mexico with a very high standard of living. Any time you have 100 million people next door, if you have the level of income differential we now have, you have to expect ultimately for a quarter of Mexico to move north. On the other hand, if they are earning a very good living, if they're your customers, if they're enjoying stability and freedom and safety, then you have a natural migration both ways -- Americans who may retire to Mexico or may go to work in Mexico, or who may teach in Mexico; Mexicans who come here. But it's a much healthier relationship, just like living in a neighborhood where you'd like to have neighbors who are able to come over for dinner and you're able to go to their place for dinner and the gap isn't so wide that there's any hostility.

INTERVIEWER: Does globalization make that kind of protectionist impulse irrelevant?

NEWT GINGRICH: No, it's not irrelevant. You always have the right to rule in your country, and there are a number of cases in history where countries have been ruined by their political leaders. It's amazing what Perón, for example, did to Argentina -- lowered its standard of living dramatically compared to most of the other countries around. Look at Russia: Bad economic policy in Russia [was made] at the expense of every other Russian for a decade. So I wouldn't say that it's inevitable, but I do think the argument for a worldwide market and the argument for the ability to buy and sell worldwide is that more people will be wealthier, the environment will be safer and healthier, and the health of the human race will be better. There is no sound intellectual argument against that.