President Ronald Reagan on trade and the free market

We all have our favorite president. For me, it’s Ronald Reagan. My admiration of the Gipper began as a young child. You can imagine the impact that receiving a personalized letter from the President can have on a grade schooler. After watching the Challenger tragedy unfold live on TV in 1986, I wrote President Reagan to tell him I was sorry about the Space Shuttle.

Reagan wrote back saying:

“Thank you for your message and for thinking of me. Hearing from my young friends across the nation is always a source of encouragement . . . Perhaps the best way to honor Christa and the other crew members would be to work hard in school and in your community so that someday you will reach your goals and dreams as she wished you would. God bless you.”

As I grew and learned more about the role of America in the world and the importance of a free market, low tax and regulatory burden, and a light touch of government on our lives, I came to appreciate the wit and wisdom of Reagan even more.

While trying to absorb the news that the current President has unilaterally imposed one of the largest tax increase (tariffs) on U.S. consumers in history, I reached for the Reagan quote book on my desk and found this gem about the importance of avoiding protectionism from a radio address to the nation he gave in 1982.

President Reagan told Americans:

“We're reminding the world that, yes, we all have serious problems. But our economic system—based on individual freedom, private initiative, and free trade—has produced more human progress than any other in history. It is in all of our interests to preserve it, protect it, and strengthen it.

We are reminding our trading partners that preserving individual freedom and restoring prosperity also requires free and fair trade in the marketplace. The United States took the lead after World War II in creating an international trading and financial system that limited governments' ability to disrupt free trade across borders. We did this because history had taught us an important lesson: Free trade serves the cause of economic progress, and it serves the cause of world peace.

When governments get too involved in trade, economic costs increase and political disputes multiply. Peace is threatened. In the 1930s, the world experienced an ugly specter—protectionism and trade wars and, eventually, real wars and unprecedented suffering and loss of life.”

Reagan continued:

“I'm old enough and, hopefully, wise enough not to forget the lessons of those unhappy years. The world must never live through such a nightmare again. We're in the same boat with our trading partners. If one partner shoots a hole in the boat, does it make sense for the other one to shoot another hole in the boat? Some say, yes, and call that getting tough. Well, I call it stupid. We shouldn't be shooting holes; we should be working together to plug them up. We must strengthen the boat of free markets and fair trade so it can lead the world to economic recovery and greater political stability.”

Noting the importance of free markets, President Reagan said:

“That is the way of free markets and free trade. We must resist protectionism because it can only lead to fewer jobs for them and fewer jobs for us . . . Either free world countries go forward and sustain the drive toward more open markets, or they risk sliding back toward the mistakes of the 1930s and succumbing to the evils of more and more government intervention. And this is really no choice at all.”

A good reminder for our current leaders.

While President Reagan was addressing the global policy of trade and free markets, the current debate about the massive tariffs just imposed on consumers is also a good reminder about the use of emergency powers and the proper way to enact policy under our form of government.

Whether tariffs are good or bad economic policy (I believe they aren't the right tool), the fact remains that policy, especially tax increases, should be introduced, debated and voted on by Congress. Major policies of any kind should not be imposed by one person unilaterally. This type of ruling by emergency order was wrong by governors during COVID, and it is wrong now.

Let’s make America the “shining city upon a hill” again, that is focused on free markets, individual liberty, limited government intervention in our lives and economy, and governed by the checks and balances wisely created by our founders.