Here’s a letter to my good friend (and fellow New Orleans native) Roger Brown:
Mr. Roger Brown
Dear Roger:
You ask, in response to my case for free trade, “[b]ut what if the imported items benefit from government support, such as AirBus planes or Chinese steel? In other words, should tariffs be used to level the playing field?”
No. The reason is that trade is not a sporting event whose ultimate purpose is to entertain fans who enjoy watching rivals play against each other all under the same rules. Instead, trade is an activity meant to expand as much as possible the range of goods and services made affordable to consumers. And so if some producers help to expand this range by offering gifts to consumers, other producers have no moral right to prevent such gift-giving.
Suppose that for years I bought my pies from baker Brown. Then one day a new neighbor – who loves to bake and to share her pies with friends – moves in next door to me. I start getting all of my pies, free of charge, from this generous neighbor. (We can say that I get subsidized pies from my neighbor.) Baker Brown is furious. So he hires a gang of street thugs to surround my home and demand that I pay to them a fee for every pie that I get as a gift from my neighbor. The thugs’ leader smirkingly tells me that this fee “levels the playing field for baker Brown.”
Do I have a right to receive gifts? Of course. And if I have a right to receive gifts, no one has a right to obstruct my gift-getting – not even people who suffer economically from my gift-getting, and not even if these people employ (as they often do) inappropriate sports metaphors to justify their obstruction.
More generally, because I am under no ethical obligation to purchase any of Baker’s products, no instance of my choosing to stop buying from Baker gives Baker or his agents the right to force me to buy Baker’s goods or to inflict harm on me if I refuse to buy, or to continue to buy, Baker’s goods.
Sincerely,
Donald J. Boudreaux
Professor of Economics
and
Martha and Nelson Getchell Chair for the Study of Free Market Capitalism at the Mercatus Center
George Mason University
Fairfax, VA 22030P.S. In your example, taxpayers and consumers in Europe and China certainly have a legitimate gripe about such government subsidies. But, again, American producers do not.
It’s important never to lose sight of the fact that trade is always between flesh and blood individuals – and that trade restrictions are always imposed by other flesh and blood individuals issuing threats of violence against those individuals whose only ‘offense’ is their wish to trade unimpeded with whomever they please.
