Adam Smith wisely pointed out (in Book IV, Chapter 2, of The Wealth of Nations) that
What is prudence in the conduct of every private family can scarce be folly in that of a great kingdom. If a foreign country can supply us with a commodity cheaper than we ourselves can make it, better buy it of them with some part of the produce of our own industry employed in a way in which we have some advantage.
Larry Kudlow very effectively and very appropriately strikes this same theme in this op-ed appearing in today’s Washington Times. Kudlow is angry (as he should be) that politicos in D.C. — either out of ignorance or, more likely, because they themselves freely trade favors with K Street lobbyists — are working now to prevent Americans and Chinese from trading freely with each other.
Kudlow opens his op-ed with an appropriate question: "If a store is selling quality products at low prices, why would anyone want to shut it down?"
Indeed, why?
I invite Sen. Charles Schumer, Sen. Lindsey Graham, or any other protectionist to offer a compelling justification for protectionism — a justification that’s consistent with what almost every economist this side of the AFL-CIO has long known — one that deals with centuries of hard evidence showing that trade promotes prosperity and protectionism promotes poverty — one that goes beyond scaring people with ominous-sounding but virtually meaningless terms such as "bilateral trade deficit" — one that recognizes that the ultimate purpose and challenge of economic activity is not to ‘create jobs’ but to raise individuals’ standards of living — one that recognizes that trade is a positive-sum activity — and one that honestly admits a ready willingness, if not an eagerness, to inflict violence on consumers who insist on spending their money as they see fit.
