Mercantilism is to economics what geocentrism is to astronomy: it is thought to be obviously correct by people who obviously fail to think correctly. Here’s a letter to the Wall Street Journal:
Capping their case for restoring U.S. Export-Import Bank subsidies to politically powerful corporations, Sen. Mark Kirk (R., Ill.) and Rep. Stephen Fincher (R., Tenn.) proclaim that “[w]e want more American-made products, not less” (Letters , Oct. 26).
More American-made products are fine as long as they satisfy genuine consumer demands. But the increase in American-made products that Messrs. Kirk and Fincher seek to engineer will satisfy not the demands of consumers spending their own money but, instead, the demands of politicians and bureaucrats spending other people’s money. With more of their resources confiscated by Ex-Im in order to artificially stimulate the exports of a handful of American firms, tens of millions of American families will have less to spend on goods and services that they judge to be best for themselves. The fact that foreign customers of companies such as Boeing and Caterpillar will be better able to consume “more American-made products” does nothing to offset the reduction in U.S. household consumption that Ex-Im subsidies necessarily cause.
Donald J. Boudreaux
Professor of Economics
Martha and Nelson Getchell Chair for the Study of Free Market Capitalism at the Mercatus Center
George Mason University
Fairfax, VA 22030