Tweet [1]
Mr. Wilbur Ross, Secretary
United States Department of Commerce
Mr. Ross:
Earlier this week on CNBC [2], in a discussion about NAFTA, you proclaimed that “It was a silly idea to let a lot of outside stuff in. The whole idea of a trade deal is to build a fence around participants inside and give them an advantage over the outside. So there’s a conceptual flaw in that, one of many conceptual flaws in NAFTA.”
You, sir, are the one operating with a conceptual flaw – namely, that trade is to be evaluated by how much it enhances the sales and profits of domestic producers. In reality, trade is to be evaluated by how much it enhances the purchases and well-being of domestic consumers. Your innocence of this elementary fact is appalling.
Yet despite your cockeyed viewpoint, perhaps we free traders should thank you for being so frank about the nature of your and Trump’s mercantilist schemes. In the passage quoted above you unwittingly but clearly reveal two central flaws of protectionism. One is the zany notion that people are made poorer if their government does not restrict their access to goods and services; the second is the cronyist sentiment that government’s role is to bestow special privileges on existing domestic producers.
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
…..
(I thank Bryan Riley and Ed Tower for alerting me to Ross’s ludicrousness.)