Gary North on current economic affairs and investment marketsGary North -- Specific Answers
HomeContact MeTell a FriendText SizeSearchMember Area
Gain immediate access to all of our current articles, the question-and-answer forums, dozens of free books, and article archives. Click here for details on how to join.

About This Site
Academic Gaps
Articles
Capitalism and the Bible
Clichés of Protectionism
College Finances
Debt Management
Ellen Brown: Critique
Federal Reserve Charts
Gary North's Free Books
Get Published Here!
Gold Price & My Report
Keynes Project
Price Index (U.S.A.)
Questions for Jim Wallis
Remnant Review
Social Security/Medicare
Study Habits
Sustained Revival
Tea Party Economist
U.S. Debt Clock
Yield Curve
Your YouTube Channel
Gary North's Miscellany
Advertising
Blogging
Budgeting for Wealth
Business Start-Up
Career Advancement
Education That Works
Evernote: Free Notes
Federal Reserve Policy
Fireproof Your Job
Goal-Setting for Success
Great Default
Inheritance Strategies
Insurance
International Investing
Investment Basics
Job and Calling
Leadership
Marketing Case Studies
Obamanomics
Peak Oil
Precious Metals
Real Estate
Retirement
Safe Places
State of the Economy
Stocks and Bonds
Test
Video Channel Profits
War With Iran
Join Now
Members' Free Manuals
Our Products
Contact Me
Help
Tell a Friend
Text Size
Your Account
My 100% Guarantee
Privacy Policy
Terms of Use


home | Clichés of Protectionism
 

Whenever you hear any of these arguments against free trade, you will have answers.

The arguments against free-trade all have this in common: they rely on coercion by the government. All of them rely on a concept of the legitimacy of government agents with badges and guns who have the moral authority and legal right to stick a gun in the belly of one or more people who want to make a voluntary transaction. The government tells these people that they do not have the moral right or the legal authority to make such a transaction.

Think of two men: Jones and Smith. Jones wants to make a voluntary transaction with Smith. Brown is in competition against Smith. He does not want Jones to have a legal right to buy from Smith, because Smith offers lower prices, better quality, or some other advantage which Brown either does not want to offer or is not in a position to offer.

Brown goes to the government and demands that Smith not be allowed to make this offer to Jones. He does so in the name of national prosperity. He persuades the government that any price-competitive offer from Smith to Jones will reduce the wealth of the nation. Therefore, he insists, the government has to send out someone with a badge and a gun to stop this kind of trade.

There is one other factor: an invisible line, called a border, which separates Jones and Smith. It is a legal border. It regulates who gets into the country, or who has a right to vote in the country, or who has the right to stay in the country.

In this case, Jones lives in the United States. So does Brown. Smith lives in Canada.

Certain borders in the United States and in most countries have no economic relevance to trade. Borders between counties have little or no economic relevance. Borders between states have little or no economic relevance. In fact, the Constitution of the United States was written by a group of participants who specifically had been assembled in Philadelphia in order to deal with the question of tariff barriers between states. The 1786 Annapolis Convention had been called to deal with this. It had failed. The Philadelphia Convention was the follow-up meeting. This is why the Constitution prohibits any tariffs established by state governments. The United States is a gigantic free-trade zone. It is unconstitutional for any state to impose tariffs against the imports from other states.

The only state border that is guarded is California's, and the justification for this is the protection of California agriculture from fruit flies and other bugs that might be attached to agricultural products that people carry in their cars into the state. This justification is entirely bogus. The border patrol system is the remnant of an illegal restriction on people from other states coming into the state during the Great Depression in the mid-1930s. The Supreme Court declared these restrictions unconstitutional. But, once the border patrol set up the restrictive barriers, it did not want to take them down. Those people wanted to keep their jobs. So, the legislature invented a new excuse for restricting entry into the state: fruit flies. The border patrol people all kept their jobs. The bureaucracy still exists 80 years later -- a welfare program.

Tariff barriers and other import quotas that are established for any purposes other than revenue generation assume that the invisible line known as the national border is completely different, economically speaking, from all of the other invisible lines, also called borders, that exist inside the nation. No one accepts any of the arguments for restricting trade across the internal borders. Yet they accept these arguments with respect to national borders.

These articles detail the economic reasons why arguments in favor of restrictions on voluntary trade across the invisible lines known as borders are invalid from an economic point of view. These pro-tariff arguments are deceptive. They lead to policies which reduce most people's freedom, and most people's wealth.

Most of these arguments have been around for well over two centuries. Most of the arguments in favor of restrictions on trade have been around in the West for over 300 years. They promote a system called mercantilism.

Adam Smith became famous in 1776 for his arguments against mercantilism. His book, The Wealth of Nations, is a treatise against tariffs and import quotas. Nevertheless, millions of people who claim to be defenders of the free market, and who think they are followers of Adam Smith, hold exactly the positions that Adam Smith wrote his book to refute. It is one more case of self-interest and bad economic logic combining to confuse millions of voters.

Still, on the whole, the arguments in favor of free trade since 1960 have been persuasive in the United States. Most of the tariff barriers have come down. Most of the import quotas have come down. Democrats and Republicans have generally agreed that free trade is better for America than managed trade, at least with respect to imports.

Congressmen believe in mercantilism with respect to government subsidies for exports. This is completely illogical economically, given the case for free trade.

There is still managed trade by international bureaucracies, most notably the World Trade Organization. Another one is NAFTA. These organizations are not in favor of free trade. They are in favor of bureaucratically managed trade. I am not a defender of these organizations.

If you think you have an argument in favor of tariffs, send it to me. I will use it to write another article. There are always more bad arguments against free trade that I have failed to cover. But most of them are variations of a handful. They all boil down to this: "Government agents with badges and guns make us richer by restricting our choices."

"The Government Protects Union Members Through Tariffs."
Gary North - February 21, 2013
Union members believe this. Union members are dupes. . . . keep reading
"A Slowly Depreciating Dollar Is Good for the Economy."
Gary North - February 08, 2013
Why do people believe this about the nation, but not about themselves? . . . keep reading
"A Trade Surplus Benefits the Nation."
Gary North - January 31, 2013
It all depends on how many IOUs from foreigners that domestic residents want to own. . . . keep reading
"Workers Need Protection Against Slave Labor."
Gary North
Of all the arguments in favor of tariffs, this one is the stupidest. . . . keep reading
The Statist Propositions of Protectionism
Gary North
The issue of tariffs forces people to face up to their presuppositions about economic reality. . . . keep reading
Japan Has No Oil. Japan Is Rich. How Is This Possible?
Gary North
Oil is cruicial in modern life. Japan has none. Japan is rich. What's going on here. . . . keep reading
Tariffs As Welfare State Economics
Gary North
If you oppose the welfare state, then you should also oppose tariffs. . . . keep reading
Guns, Trade, and Subsidies
Gary North
Should tariffs reflect geopolitical concerns? If so, how? . . . keep reading
Free Trade: The Litmus Test of Economic Reasoning
Gary North
This has been the test since at least 1752. This sorts out the hangers-on and fellow travelers. . . . keep reading
Tax-Loving Conservatives
Gary North
Too many Tea Party members are closet Keynesians. Here is a litmus test for identifying them. . . . keep reading
How to Win a Tariff War
Gary North
Knee-jerk tariff advocates never change their arguments. Their arguments are always wrong. . . . keep reading
Envy, Asians, and Tariffs: How to Keep America Poorer
Gary North
It takes self-conscious effort to get envy out of our thinking. . . . keep reading
Illegal Aliens and Unemployment: Causes and Effects
Gary North
When you know the cause, you can find the solution. . . . keep reading
The Twin Deficits: Funded by Fiat Money
Gary North
Blame the Federal Reserve. Blame its clones. . . . keep reading
These Threats Will Not Collapse America's Economy
Gary North
Some things are not worrying about. Here is a list. . . . keep reading
China: Trapped by Mercantism
Gary North
There are two forms of mercantilism today: Asian and Western. They work together to make most people poorer. . . . keep reading
More HeadlinesMore Headlines
 Tip of the Week
Sign up for my free
Tip of the Week
Verification Characters:
Type    U P E J M   
here  


Tip of the week archives
RSS Feed for GaryNorth.com
On what this icon
means, and how it
can help you,
click here
 Q & A Forums
General Q&A Forum
Advertising and Resumés
American History Topics
Backyard Food Gardening
Banking and Politics
Blog Sites and Web Sites
Bumper Sticker Slogans
Business Forum
Buying Smart
Christian Service Forum
College -- The Cheap Way
Copywriting
Education Alternatives
Food Storage
For Women Only
Gold and Silver
Great Default Forum
Health and Diet
Health Insurance
Homeschooling
Investments Forum
Iran War
Job, Calling, and Career
Leadership Development
Legacy Building
Less Dependent Living
Local Political Action
Non-Retirement Forum
One Good Idea
Privacy
Public Speaking
Real Estate Forum
Remnant Review Forum
Safe Places Forum
Typographical Errors
Video Production Basics

 Archives
Reality Check
 Discussion Forum
Search Discussion


Recent Forum Posts
• Foreign Currency Revaluation
• Foreign Currency Revaluation
• Clear out of the market or stay put?
• Shorting the S&P500
• Can a company get a list of who's shorting stock?
• Physical Gold vs. Paper Gold
• Best Use Annual Dated Sets Coin Collections?
• Coin collection
• Self Directed 401-k
• Operation Twist and inflation worries
• Which coin is best and why?
• Peter Schiff Sounds the Alarm on CNBC
• Internet income in times of inflation
• A Dry Demo investing
• GTU-GLD Arbitrage Opportunity - A TESTIMONIAL
• non recourse loans
• Out of Town Seller
• Rent-to-price ratio
• Any advice for a real estate agent in training?
• Investing in notes - Eddie Speed NoteSchool
• Should I Start a Commercial Brokerage?
• Property management Question
• Beware of Section 8
• Flooring question
• Should I start a foreclosure clean out business?
• Vacation rental
• termite problems
• Location location location!
• Living in House then Renting
• Planned Communities
• Some Ammo Available
• Homeland Security Trucks
• Key Words for Safe-Place Searches
• Water Well on Property Article
• Search City-data.com by crime index
• Race War in the United States: How Serious a Threa
• Don't worry,DHS trains to keep us safe...
• Well that's a relief ...
• " police state imposed on an armed population
• Use existing webcam as security cam for free
• Johnson City TN Relocation
• Prepping for a solar storm?
• Bang Bang
• Eliminating Latin American "bolt holes"
• Skousen_massacre s
• YP ad design questions
• My local Yellow Pages is shrinking - why?
• Follow up marketing
• possible headline for previous thread
• offers in a Yellow Pages ad
• Timing with Yellow Pages-deadline approaching
• Developing a USP for Yellow Pages ad
• Estimating additional cost?
• Are you willing to expand this to copywriting pls?
• What is & how to find an Independent specialist?
• What is this forum?
• 401k strategy
• Can I Avoid Medicare Entirely?
• Looking for a Financial Planner/CPA
• How to calculate retirement needs
• Two IRA questions:
• Rentals
• Why?
• Teaching in non-retirement
• How will Employers Respond to Extended Retirement?
• When should one enroll in Medicare?
• SONG IN MY HEART
• Cashing out of 401k plan???
• How some oldsters will respond...
• life insurance from buyer's point of view
• Social Security… It’s not so bankrupt!
• Where to begin?
• Peak Oil Question
• Non insurance
• The DOW and Excess Reserves
• Nonrecourse loan referenced in Velocity of Money
• How much money needed to suppress gold price?
• Sustained Revival
• neighborhood bully
• New Business Idea
• How Can I Ship a Shotgun?
• Pushing Big Iron
• The Mogambu Guru - Keynesian Phrenology
• App lets U Boycott Monsanto w/ scan
• Am I overly conspiracy minded?
• Is the Dollar Getting Close to Getting in Trouble?
• My membership site plan
• Direct Mailing Advertising.
• Air duct cleaning marketing.
• American Business Alliance
• asking for opinions on blog content
• Business identifier distinctions.
• Free Family Member Assistance?
• Marketing Case Study Coincidence
• "Snowballin g" Entrepr eneurship Strategy
• RE: Are You Ready to be self Employed - Bly
• Wedding Videography/Photobooth business
• Gauge Market Demand
• Borrowing to start business?
• Trucking?
• Big Private School Acquisition, need advice!
• What kind of Aloe Vera Juice?
• Aloe Vera JUICE!
• You got bird flu?
• Legal Issues (Are your supplements at risk?)
• ?Status of Avian or H1N1 risk in 2010-2011?
• skin use
• Air Force Strategic Plan
• Swine Flu Mexico to NYC
• When Pigs Fly.....
• China warns of grim fight.
• English Breakfast Tea good for anthrax
• why I do NOT use colloidal silver
• Is bird flu the biggest hype of the year?
• did bird flu die?
• IV vitamin C and hydrogen peroxide?