Seekingexports offers, on this post, the following comment:
Mr. Boudreaux, Amost all of the companies on the Shanghai index are government controlled. The mercantilist policies of China along with stimulus funds going to government cronies and officials make a poweful defense of China’s industries. The effectiveness of China’s trade policies with the U.S. result in China’s share of U.S. imports of 16% but its share of of the trade deficit at 58%. Your defense of classic mercantilism helps perpetuate the myth of the benefits of trade that result in the huge losses of value-added jobs. Please help the U.S. break down barriers to U.S. Goods and Services.
This is the first time I’ve been accused of defending mercantilism (classic or otherwise)!
Of course, I defend no such thing. The whole world would be made better off – but the Chinese people especially – if Beijing took a more hands-off approach to trade (and every other economic) policy. But Americans would be made worse off if, under the pretext of ‘responding’ to Beijing’s misguided trade policy, Uncle Sam ramped up his own mercantilist policies.
I defend free trade. As a practical matter, Uncle Sam should concern himself with correcting his own mistakes rather than using the mistakes of other governments to justify even further mistakes and predations that he’s forever lured to commit — lured by greedy interest groups and widespread economic ignorance.
It’s true that Americans would be better off if Beijing pursued laissez-faire economic policies. But, practically, that’s none of our business. Understand that it’s also true that you’d be better off if your next-door neighbor saved more, for each addition to the capital stock increases worker productivity and total output. Surely, though, you would not reduce your own savings rate simply because you determine that your neighbor is saving too little. Would you?
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By the way, the 16% and 58% figures that Seekingexports offers are meaningless. “So what?” is all I can ask.
