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More of the Same Mercantilism

Believing that Beijing’s mercantilist trade practices reduce the prices we Americans pay for Chinese goods, Washington Post columnist Robert Samuelson asserts that “To do nothing about China’s trade policies is to encourage more of the same.”

Why, pray tell, should we not welcome “more of the same”?  What’s wrong with the Chinese offering to sell us more goods at lower prices?

Samuelson would likely respond by noting that Beijing’s policies harm American producers.  But this response fails.  First, American producers would be no less harmed if the falling prices of Chinese goods resulted exclusively from improved market efficiencies – efficiencies that Samuelson would reject as a justification for U.S. protectionism.

Second, Samuelson forgets Adam Smith’s insight that “Consumption is the sole end and purpose of all production; and the interest of the producer ought to be attended to only so far as it may be necessary for promoting that of the consumer.”  Denying American consumers the opportunity to benefit from Beijing’s foolish trade policies is to attend to the interest of the producer in a way that harms, rather than promotes, that of the consumer.