… with apologies to Ptolemy, who was a far better astronomer than mercantilists were, and are, economists.
Here’s a letter to the Wall Street Journal:
In the Trans-Pacific Partnership trade negotiations, the Obama administration insists on “yarn-forward” rules of origin. These restrictions would effectively require Vietnamese and Malaysian clothing manufacturers who sell their outputs to Americans to buy their fabric from U.S. – rather than from lower-priced Chinese – textile producers. Mystified that some Americans oppose such restrictions, U.S. Trade Representative Ron Kirk declares that “It makes sense to structure a trade agreement to ensure that its participants are the primary beneficiaries of the preferences” (Letters, May 16).
Mr. Kirk’s statement is further evidence that the “Progressive” Obama administration still believes in 17th-century economic superstitions – specifically, in the mercantilist myth that a nation’s benefits from trade rise with every increase in the amount of valuable goods and services that its producers ship abroad and fall with every increase in the amount of valuable goods and services that its consumers receive in return.
Donald J. Boudreaux
Professor of Economics
George Mason University
Fairfax, VA 22030