Justifying Government Steeling for Cronies

by Don Boudreaux on August 5, 2013

in Crony Capitalism, Trade

Here’s a letter to the New York Times:

Peter Navarro offers up a dog’s breakfast of poor excuses for infringing Americans’ freedom to buy steel made in China (“The Price of ‘Made in China’,” August 5).  Especially weak is his assertion that “every job China gains by dumping steel into American markets is an American job lost.”

Mr. Navarro naively ignores the jobs created in America by the additional spending made possible from the savings we Americans enjoy by buying less-costly steel from China.  More fundamentally, his thesis justifies government obstruction of all activities that threaten the jobs of any particular group of American workers.  For example, no less than do ‘cheap’ imports of steel, improvements in techniques for recycling steel ‘destroy’ some American steelworkers’ jobs.  Likewise for advances in the production of carbon-fiber.  Likewise for new bauxite discoveries, which lower the price of aluminum.

Unless Mr. Navarro can make a persuasive case for protecting American steelworkers’ jobs by punitively taxing research that improves metals recycling, or for punitively taxing the production of carbon-fiber sheets, or for punitively taxing the exploration for new deposits of bauxite, his case for protecting American steelworkers’ jobs by punitively taxing Americans’ purchases of Chinese-made steel deserves to be ridiculed as the slice of antediluvian economic ignorance that it is.

Sincerely,
Donald J. Boudreaux
Professor of Economics
and
Martha and Nelson Getchell Chair for the Study of Free Market Capitalism at the Mercatus Center
George Mason University
Fairfax, VA  22030

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