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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."

"Protectionism Strengthens the Nation."
Gary North - November 20, 2013
This argument is big with people who call themselves nationalists. . . . keep reading
"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."
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Of all the arguments in favor of tariffs, this one is the stupidest. . . . keep reading
The Statist Propositions of Protectionism
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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?
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Oil is cruicial in modern life. Japan has none. Japan is rich. What's going on here. . . . keep reading
Tariffs As Welfare State Economics
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Guns, Trade, and Subsidies
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Should tariffs reflect geopolitical concerns? If so, how? . . . keep reading
Free Trade: The Litmus Test of Economic Reasoning
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This has been the test since at least 1752. This sorts out the hangers-on and fellow travelers. . . . keep reading
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Knee-jerk tariff advocates never change their arguments. Their arguments are always wrong. . . . keep reading
Envy, Asians, and Tariffs: How to Keep America Poorer
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It takes self-conscious effort to get envy out of our thinking. . . . keep reading
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