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May 14, 2019
The Morning Rant: Minimalist Edition![]() The current brouhaha over tariffs is amusing and unfortunately a bit embarrassing, since the idea of tariffs to strengthen the American economy has been around practically since the founding of our republic. Any student of American history will recall Henry Clay, John C. Calhoun and John Quincy Adams being supporters of "The American System," which as one of its tenets had high tariffs to protect American industry. And the British were big fans two centuries before, so it is not some new and shocking idea, whatever CNBC and the Democrat smear campaign may have us think. The only question that matters is: Is it good for America? Should we compete on a level pricing playing field when the Chinese and others use slave labor to manufacture goods that they then sell to America? Or when pricing is dictated by the governments not on the basis of economics but on the basis of geopolitics? But there is a sound argument against tariffs, and here is Cafe Hayek with a fine counter to any tariffs that disturb the relationship between supply and demand. Yet too often when buyers shift some of their patronage from domestic producers to foreign producers, domestic producers – both firm owners and workers – insist that the state is morally obliged to force buyers to continue to purchase their products and their labor without any reduction in the prices and wages charged by sellers. These producers greedily and falsely insist that it’s bad policy for the state to allow buyers to shift their patronage to other sellers. Because those other sellers happen to be located abroad – or in the case of immigrants happen not to have passports issued by the domestic sovereign – such greedy and false insistence by domestic producers and workers is remarkably seen as legitimate, despite the fact that there’s nothing remotely legitimate about such insistence.The economic argument against tariffs is clear and unambiguous and damning. It's clearly not just economics though, so the question needs to be answered holistically. Tariffs have been the catalyst for war far too often to ignore how volatile they can make foreign policy. But the use of pricing power to weaken the American economy is also unacceptable, and can be reasonably seen as the first shot in a war. My Twitter Feed | Recent Comments
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