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Open Letter to a Correspondent

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Dear Mr. M________:

Thanks for your e-mail.

You write “While free trade works when economies are fully employed, tariffs must be used when economies are depressed….  Why do you [Boudreaux] deny this necessity?”

I’m consumed now with other work, so I’ve not the time to reply as fully as I’d like.  Here, though, are two quick points:

First, economists widely agree that prolonged high unemployment rates are not caused by international trade but, instead, by poor domestic policies.  (There is, to be sure, much disagreement over just what those poor domestic policies are.)  Prescribing tariffs as a remedy for high unemployment is like prescribing LSD as a remedy for broken bones: it might create the hallucination that a remedy is in the works, but it will in fact only inflict further harm on the patient.

Second, if the premise of your argument is correct, you should not stop with obstructing cross-border trade.  You should propose also that, say, people be prevented, during recessionary downturns, from buying used cars (think of all the auto-factory jobs that would thereby be created); that people be prevented from preparing meals at home (think of all the restaurant jobs that would thereby be created); and that people be prevented from sleeping at home (think of all the hotel, motel, and B&B jobs that would thereby be created).

If (as I suspect) you believe that such additional restrictions on people’s freedoms are inappropriate, why do you suppose that restricting people’s freedom to trade with foreigners is appropriate?

Donald J. Boudreaux