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Quotation of the Day…

Posted By Don Boudreaux On June 17, 2013 @ 7:50 am In Complexity & Emergence,Trade | Comments Disabled

… is from page 70 of David Friedman’s 1996 book, Hidden Order [1]:

There are two ways we can produce automobiles.  We can build them in Detroit or we can grow them in Iowa.  Everyone knows how we build automobiles.  To grow automobiles, we first grow the raw material from which they are made – wheat.  We put the wheat on ships and send the ships out into the Pacific.  They come back with Hondas on them.

From our standpoint, growing Hondas is just as much a form of production – using American farmworkers instead of American autoworkers – as building them.  What happens on the other side of the Pacific is irrelevant; the effect would be just the same for us if there really were a gigantic machine sitting somewhere between Hawaii and Japan turning wheat into automobiles.  Tariffs are indeed a way of protecting American workers – from other American workers.

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[1] Hidden Order: http://www.amazon.com/Hidden-Order-Economics-Everyday-Life/dp/0887308856/ref=sr_1_1?s=books&ie=UTF8&qid=1314195951&sr=1-1

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