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Self-imposed sanctions

Posted By Russ Roberts On December 3, 2007 @ 1:39 pm In Trade | Comments Disabled

Joan Robinson once said (anyone out there have a source?), just because your neighbor puts rocks in his harbors to keep out your boats, that doesn’t mean it makes sense for you to do the same. Charles Wheelan makes a similar point [1] about embargoes—if you support trade embargos to punish our enemies, you can’t be a protectionist at the same time (HT: Dan Kennedy):

Sanctions are a potent weapon because they can impose serious
economic harm on the target country. Gaza has been enduring a "deep
economic depression" since the economic blockade was imposed. The
Christian Science Monitor reports that tougher sanctions on Iran "would
hit the ruling mullahs hard by raising Iran’s already high
unemployment, and perhaps force trickle-up regime change."

A Self-Inflicted Embargo

So
here’s what I don’t understand: Why do so many of our presidential
candidates, and a surprising proportion of the American population,
believe that we should impose trade sanctions on ourselves?

After
all, if you believe that the United States should trade less with the
world (or if you oppose the expansion of trade), then you’re
essentially calling for a self-imposed economic embargo — sanctions on
ourselves. If curtailing global trade is bad for Gaza and Iran, how
could it possibly be good for us? The answer is that it’s not.

Yes,
I’ve made the pro-trade argument before. But reading about the effect
of sanctions in Gaza — the opposite of free trade — made me see the
issue in a new light. The best way to understand why expanded trade is
good for the United States is to look at why cutting off trade is so
devastating in a place like Gaza.

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[1] Charles Wheelan makes a similar point: http://finance.yahoo.com/expert/article/economist/55241

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