Reshore
How Tariffs Will Bring Our Jobs Home & Revive the American Dream
One of the most important books of the year, a tour de force of economic history and economic philosophy.
~Steve Bannon
Spencer Morrison makes a clear and highly persuasive case for the necessity of tariffs. Making America Great Again depends on bringing American jobs back where they belong —to America.
~Peter Navarro
As the author of ‘Free Trade Doesn’t Work’ (2010) and coauthor with Marc Fasteau of ‘Industrial Policy for the United States: Winning the Competition for Good Jobs and High-Value Industries’ (2025), I can say with great confidence that the overall message of this book is a good one. And Mr. Morrison is a capable writer and delivers it in a lively, readable style that the average voter will find highly enlightening.
~Ian Fletcher
About Spencer P. Morrison
Spencer P. Morrison is a lawyer, sessional instructor of law, and independent intellectual with a focus on applied philosophy, empirical history, and practical economics.
Author of Reshore: How Tariffs Will Bring Our Jobs Home and Revive the American Dreamand Editor-in-Chief of the National Economics Editorial. Spencer writes a weekly column with Blaze Media.
Spencer has been published by major publications including the BBC, Real Clear Politics, Blaze Media, the Daily Caller, WND, Chronicles, American Greatness, the American Thinker, and the Foundation for Economic Education.
Spencer has appeared on major news programs including Steven K. Bannon’s War Room, OAN Primetime, BBC Radio One, NTD News, and Lindell-TV.
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~EXCERPT~
Chapter 7: Against Free Trade
In 2018 I published a piece in the Journal of American Greatness defending President Donald Trump’s tariff policy and criticizing global free trade. Mainstream “conservatives” were quick to distance themselves from my heretical views. After all, Republicans stand for freedom, liberty, and the right of the Communist Party of China to huck their slave-made wares in every Walmart in America—from sea to shining sea.
Ben Shapiro, who was at the time the Editor-in-Chief of the Daily Wire, went so far as to write a vitriolic response entitled “Yes, Tariffs are Still Stupid. Here’s Why” in which he “debunked” my arguments. First and foremost, Shapiro was quick to remind his readers that “the reality is that [his] arguments on free trade have been supported by every major free market economist in history.”[i]
Ben Shapiro was right. Every major “free market” economist supports free trade. Consider that in 1993, 283 experts—including twelve Nobel Prize winners, and famous “pop” economists like Milton Friedman and James Tobin—penned an open letter to the American people in defence of NAFTA.[ii]
That said, I will remind you that just as every “free market” economist supports free trade, so too does every “Marxist economist” support socialism. Does the fact that Marxist economists support socialism prove that socialism works? No. The same is true of free market economists. Their opinions are logically irrelevant.
Ben Shapiro was engaging in sophistry—the art of persuading without evidence. More specifically, Shapiro employed the Call to Authority fallacy. This is a false argument that “proves” a point by referencing expert opinion. Although expert opinions may be rhetorically persuasive, they prove nothing. Why does 2 + 2 = 4? Because your kindergarten teacher said so? Of course not. Logical proof and empirical evidence exist independently of expert opinions, and must be evaluated independently.
Experts claim that free trade benefits America—and because the trade deficit is the result of freer global trade—the trade deficit itself must be good. This is false. We cannot trust experts simply because they have degrees, or because they are famous, or even because they won a Nobel Prize. Instead, we must evaluate their claims based on the evidence.
In Part I of this book, we surveyed America’s economic destruction. Millions of Americans are chronically unemployed, and those who are lucky enough to have jobs have not had a pay raise since 1973. Meanwhile, America’s industry has been hollowed out, and the economic dislocation has frayed the very fabric of society. In Part 2 we discovered that the trade deficit, an inevitable result of the offshoring vicious cycle, is the root cause of America’s economic problems. The data clearly and unambiguously proves the experts wrong. Free trade did not work.
When confronted by this data, many economists shrug and say something along the lines of: “Free trade did not work in practice because it was not real free trade. Free trade works in theory, but we implemented it wrong.” This deflection is wrong two reasons.
First, real free trade—much like real communism—is impossible. Different countries have different levels of economic development, legal systems, tax structures, histories, geographies, languages, cultures, and populations, all of which create market asymmetries between nations which are simply not present domestically.
At best, free traders can reduce tariffs and other invisible trade barriers, like transportation costs and legal disharmonies. America has done just that. Consider that America’s average tariff rates dropped from well over 30% in the 1800s to effectively nil today. Further, invisible barriers to trade which were present in the 1800s, like the enormous cost of transporting bulk goods overseas, have been largely eradicated by technology. America trades more freely today than at any point in history, and our economy is worse than at any point in history. This is not a coincidence.
Second, global free trade does not work in theory. In this Chapter we will cover a lot of ground. We will begin by outlining some major epistemological problems with the “science” of liberal economics. The temple of economics is built on a shaky foundation, and we have good reasons to be skeptical of what the “experts” say.
Next, I will explain theory of comparative advantage, which is the economic logic which justifies global free trade, and show that it is domain specific. In other words, comparative advantage only works in certain circumstances, and it has been inappropriately used to justify global free trade. Finally, I will show that reality is more complicated than economic models, and therefore we should be careful we do not lock ourselves in the ivory tower.
Killing Homo Economicus
Even so every good tree bringeth forth good
fruit; but a corrupt tree bringeth forth evil fruit.
~ Jesus Christ
The science of economics is based on several false presumptions. Therefore, we must be skeptical of any conclusion derived from these presumptions—this includes the theory of free trade. The first false presumption is the myth of the rational consumer.
Economists assume that consumers make rational economic choices: they weigh the relative price and utility of products, and always buy the product which maximises their relative wellbeing. For example, consumers prefer cheaper lollypops to more expensive lollypops, provided they are of equal quality. The problem is that consumers are not rational—neither individually nor in aggregate. As a result, logical deductions made from this presumption will necessarily be suspect.
Daniel Kahneman, who won the Nobel Prize in economics for his work in establishing the field of behavioral economics, which views economics through a psychological lens, has demonstrated that individual consumers do not always behave rationally. Instead, Kahneman found that humans make decisions based on two competing psychological “systems”, which he explains in his book Thinking Fast and Slow.
System 1 operates subconsciously, automatically, and instantly, and makes decisions based on prior experience. For example, System 1 localizes the source of specific sounds in the environment and solves math equations like “2 + 2 = ?”. System 2, is conscious, deliberate, and relatively slow reasoning. For example, you are likely using System 2 to understand the differences between the two systems right now. Importantly, economists assume that consumers always base their choices on System 2. This is untrue.
Human decisions are typically made by System 1, and those decisions which are made by System 2 are often colored by the psychological heuristics and biases present in System 1. For example, Kahneman ran an experiment where participates were shown either a big or a small number. A few minutes later, the participants were asked to determine reasonable prices for products. What Kahneman found is that participants who were psychologically primed, shown, the larger numbers were willing to pay more for products, and vice versa. This is irrational, as the numbers were completely unrelated.
Kahneman surmised that this was because System 1 interprets numbers according to the anchoring and adjustment heuristic. Essentially, the brain anchors to the last number with which it was primed, and then adjusts up or down from this number. Kahneman found many other heuristics and biases, mental shortcuts, used by System 1. These heuristics and biases are inherent in humanity, and therefore guarantee that individual consumers are irrational. As such, how can we trust the theory of free trade, when it is based on consumers behaving rationally? Would you trust a doctor who believes disease is caused by bad smells? Presumptions matter.
At this point, economists will admit that while individual consumers are not rational, they behave rationally in the aggregate, since individual biases and predilections are ironed-out by the group. In other words, the group balances out the individuals. This is untrue for two reasons. First, given that all individuals are irrational in the same ways—System 1 is uniformly irrational across humanity—then this irrationality will necessarily manifest in the aggregate, because there is no counterbalance. Second, groups themselves are subject to their own irrational dynamics.
In 1982 the French mathematician Benoit Mandelbrot published his landmark book The Fractal Geometry of Nature, in which he brought his pioneering work in the fields of fractal geometry and mathematics into the public consciousness. Essentially, Mandelbrot found that natural forms are often made of repeating patterns, which look similar at different levels of magnification. For example, a storm cloud is basically a large puff of cloud, and each puff is itself made up of smaller puffs of cloud. Extrapolating Mandelbrot’s thesis provides a relevant critique of economics.
Economic organization is fractal. Therefore, we must expect that if irrationality is found at one level, it will be found at all levels. For example, a traditional family consists of a husband, wife, and children. The husband made big economic decisions for the family and the wife made day-to-day decisions. Today, many young people live alone, and make their own buying decisions. In all cases, those decision are not always rational.
So too, a corporation operates similarly to a traditional household: a CEO makes the most consequential economic decisions which bind the entire corporation, and those decisions are not always rational. For example, Kathleen Kennedy’s insistence on promoting radical left-wing gender and racial ideology in Star Wars has cost Disney many hundreds of millions in lost box office revenue—and yet Disney’s quest to play politics continues. This is not economically rational.
This sort of irrationality also occurs at the state level: governors and presidents make the most consequential economic decisions, and these decisions bind entire countries. For example, Stalin’s collectivization of the USSR’s farms caused widespread famine, killing millions of people and destroying the economic output of the Ukraine. This was certainly not economically rational.
Economics assumes that the market is a collection of millions of individuals making individual decisions, and any irrational decisions are smoothed out by the group. This is not necessarily true, since consequential economic decisions at different levels of organization are made by individuals at those respective levels of organization—we rarely have the large aggregates that economics presupposes.
Further, decisions at higher levels of organization are orders of magnitude more important than decisions at lowers levels, and often make the decisions for lower levels. Simply put, there is often no aggregate market mitigating or eliminating irrationality. Instead, we have a relatively small number of people making consequential economic decisions—especially regarding the question of global free trade—and these people do not act rationally.
Lastly, groups of people do not behave rationally because they have emergent properties. Emergent properties refer to dynamics, rules, or structures which do not exist until a certain scale is reached. These emergent properties may take on characteristics which are very different from the characteristics of their individual components.
For example, in 2021 a group of “investors” started buying stock in GameStop, both to prop-up a company which gave them fond childhood memories, and to stick it to investors on Wall Street, who were short-selling the stock. As a result, Stock in GameStop exploded from roughly $3.00 to over $80.00 in the space of a few weeks.
Investing in GameStop was irrational from an individual’s economic perspective, but it made sense when looking at the group dynamics. Further, the “mob” which had coalesced was governed by emotion and spite—irrational qualities that should be impossible in a group dynamic, according to economists.
At the time of writing, GameStop is still trading at over $30.00 per share. This is not based on any improvement in the company’s fundamentals, but because the mob is punishing Wall Street short sellers, and other investors are speculating that the stock may remain profitable due to volatility. The example of GameStop shows that groups are governed by their own dynamics, and that these dynamics are not always rational.
Classical economics is based on the presumption that consumers behave rationally. This is not true. Individual consumers do not necessarily behave rationally. Likewise, groups do not behave rationally—in fact, any student of history will note that the mob is often far more irrational than any individual in the mob. As such, we must be skeptical of economic theories which are ultimately derived from the myth of the rational consumer. The theory of free trade is no exception.
Mistaking Washing Machines for Hurricanes
The second false presumption undermining classical economics is that the economy is a simple system. In reality, the economy is a complex system. A simple system is a mode of order wherein cause and effect are related in a linear, one-to-one, way. That is, if you know the starting position of each systemic element, and you know what causes applied to said system, then it is possible to predict—with certainty—the outcome.
A classic example of a simple system is a billiard’s table. There is a one-to-one relationship between the cause, the direction and speed of the cueball, and the effect, the direct and speed of the 8-ball. Because of this, it is possible for the skilled player to know the outcome of a shot before he takes it. The same is true for most artificial modes of order, be it the game of chess or the operation of a washing machine.
On the other hand, a complex system is a mode of order in which cause and effect are related in a non-linear way. That is, a single cause may have multiple effects on the system, and these effects may themselves interact with each other in novel ways. Complex systems are subject to feedback loops, and may manifest emergent properties at different scales. As such, knowing the starting position of each systemic element, and the forces applied to said system, will not allow you to predict the outcome with any certainty.
That said, it is possible to forecast the probability of various end states. A classic example of a complex system is the weather. There is a non-linear relationship between the various inputs, such as level of solar activity, humidity, wind speed, and the end result—which is a 30% chance of blue skies and a 70% chance of thunderstorms. It is not possible to know a priori what the weather will look like next week. At best, meteorologists and make and continuously-update forecasts based on the best-available data. The same is true for many organic and natural systems, be it human history or a hurricane.
The economy is a complex system. In fact, it is one of the most complex systems known to man. Consider that the causes of weather patterns are the interplay of solar radiation and water droplets. These causes are simple causes which, when isolated, operate in a linear way. These interactions are complicated, but not nearly as complicated as those in the economy.
The economy is the manifestation of countless individual choices. Often, choice is the product of System 1. However, choices made in accordance with System 2 are the result of the deliberate exercise of free will, and are an expression of human consciousness. Philosophers disagree as to whether consciousness originates with God or is an emergent property of the human brain, but all agree that the mind is perhaps the most complex organic system.
When this fact is combined with the fractal nature of economic organization—different layers make different decisions that have ripple effects between the layers—it becomes obvious that the economy is the king of complex systems. Further, the economy is subject to many complex feedback loops, like the offshoring vicious cycle, which can turn predictions on their head.
Economists are guilty of treating the economy like a simple system by acquiring “knowledge” as follows. First, economists observe the economy. Second, they notice patterns. Third, they formulate rules from these patterns. Fourth, economists combine rules into theories and models. Fifth, theories and models are used to make predictions.
In this way, economists tell us now only how the economy works, but how it will work in the future. As we have seen, prediction is simply not possible when dealing with a complex system. As a result, predictions made from these models—like free trade will create jobs and raise wages—are often completely wrong.
That said, it is possible to understand and learn from a complex system like the economy—it just requires a different methodology. Economists are right to begin by observing and noticing patterns. However, economists should be loth to develop rules from these patterns. Even a rule as basic as “demand decreases as price increases” has numerous exceptions, such as in the market for luxury goods. Likewise, individual motivations—like spite in the case of GameStop—routinely cause this rule to be violated in all sorts of unpredictable contexts. As such economic events and processes should be studied on their own terms, in the same way that historians study historical events.
Good historians seek to understand past events based on the evidence. Specific events are explained in specific terms, rather than as the inevitable results of a historical rule. In this way, we understand how and why history unfolded. Importantly, historians do not attempt to create theories or models from which they claim to predict the future. Instead, history is valuable because it provides us with examples of what could happen—and given a large enough sample size, we can even determine tentative likelihoods of different outcomes. For example, 200 years of history shows us that America prospered with high tariffs, despite the economic rules to the contrary.
As Mark Twain famously surmised: “history does not repeat itself, but it often rhymes.” The same is true of economics. Until economists approach the discipline as an art, rather than a science, they will continue to do more harm than good—both to society and to their own credibility…
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