Here’s a letter to the New York Times:
Alan Tonelson complains that the Chinese demand from us Americans too few of our exports in exchange for the imports that we receive from China (Letters , Dec. 21).
To remedy this situation, a simple two-step solution is available. First, Uncle Sam should mandate that American producers double the amount of goods they ship to China. Second, because the Chinese won’t accept such a large volume of American outputs, Uncle Sam should mandate also that captains of freighters en route from the U.S. to China dump half of their cargoes overboard in the middle of the Pacific.
Problem solved: Americans will – if Mr. Tonelson’s economics is correct – become richer by producing more outputs for export to China without receiving more impoverishing imports in return.
The economic effects on Americans of my proposal are identical to those promised by more typical proposals (such as punitively taxing Americans who buy foreign-made goods) aimed at increasing the amount of exports Americans pay for imports.
Donald J. Boudreaux
Professor of Economics
George Mason University
Fairfax, VA 22030
Of course, Uncle Sam could achieve the same allegedly wealth-enhancing results by instead mandating that freighters en route from China to the U.S. dump half of their cargoes – cargoes meant as imports to America – into the Pacific.
Tonelson’s proposed economic policy is nothing more than mercantilist economic policy, as described here by Doug Irwin, on page 44 of his 1996 book Against the Tide :
In terms of commercial policy, what we have in the end from the mercantilist literature is the simple employment argument for protection combined with the promotion of economic development through manufacturing, similar to the import-substitution policies proposed for developing countries in the 1950s.