You live on a block on Elm St. which has two other households: the Joneses and the Jacksons. Suppose your neighbor Jones puts a knife to your throat and threatens to kill you unless you either buy your tomatoes from him or, if you insist on buying tomatoes from a grower across town, pay him a fine for each across-town tomato that you buy. You immediately understand that Jones is violating your rights; you immediately understand that Jones is a thug, pure and simple. No amount of philosophy, economics, political science, or theology will change your assessment.
Now let Jones secure Jackson’s approval for his actions. Jackson expresses his approval not only of Jones obstructing your freedom to buy across-town tomatoes, Jackson also approves of Jones taking some of your money directly to help Jones pay for the employment, arming, and dressing up in fancy costumes of a street gang who will do the actual dirty work of caging or killing you if you refuse to abide by the tomato-buying terms that Jones imposes on you.
When you object to the injustice of Jones’s actions, he reminds you that you had a vote in this matter. But being outvoted 2 to 1, this majority outcome, by some mystical process, transforms Jones’s pure and simple thuggery into perfectly acceptable – even noble – “trade policy” the violation of which would make you the anti-social criminal.
Further, Jones, to his delight, discovers that Jackson has been hard at work on a treatise that details the many dangers of allowing you to buy your tomatoes without obstruction from across town. Jackson’s treatise even has empirical data on the number of tomatoes and labor hours that would no longer be grown and and worked on your Elm St. block if you are left free to buy your tomatoes unobstructed. Combined with criticisms of “simple-minded” defenses of free trade and with explanations that tomatoes grown across town are sold at unfairly low prices, Jackson’s treatise rids Jones of the few qualms that Jones’s threats of violence against you caused him to suffer from time to time
Thus is “trade policy.”
Don Boudreaux, “Quotation of the Day…”, Café Hayek, 2017-10-23.
November 15, 2019
QotD: Understanding trade policy
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This kind of simplistic argument makes libertarians look silly. Of course tariffs and trade policy are based on the threat of violence- so is every action by government. Every single law and regulation is a restriction on individual freedom and requires a cost to those who must observe it. Even financial incentives are based on the power to tax, a kind of legal extortion that is almost universally accepted.
Tariffs are a recognition that the playing fields between countries should be leveled. If one country has child labor laws and environmental regulations and another does not, the freer country has an advantage. Of course, being free to employ children and pollute the environment is not necessarily a good thing.
A healthy economy is not just low prices at Walmart.
Comment by Craig Hamilton — November 15, 2019 @ 14:08