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Mercantilism Should Be – But, Sadly, Isn’t – Washed Up

Here’s a letter to the Toledo Blade:

You report that “[t]he Commerce Department and U.S. International Trade Commission, which work together on illegal dumping cases, are investigating a complaint filed in December by Whirlpool that alleges Samsung and LG are selling Chinese-made washing machines in the United States at massive discounts….  In dumping cases, the trade commission investigates and determines if a U.S. firm was injured” (“Ohio senators seek washer ‘dumping’ sanctions,” Oct. 29).

Horrors!  “Massive discounts“!  Good thing Uncle Sam works to end this impoverishing scourge!  Yet given the logic of Uncle Sam’s efforts to prevent consumers from acting in ways that injure U.S. firms, Uncle Sam’s current efforts are far too modest.

In addition to protecting Whirlpool from injury inflicted by consumers who selfishly buy low-priced imported washing machines, Uncle Sam should protect Whirlpool also from injury inflicted by consumers who selfishly buy used washing machines (as they do, for example, on eBay).  Clearly, consumers who buy used washers injure Whirlpool by cutting into that manufacturer’s sales of new washers.  But even prohibiting the sale of used washers won’t be enough: Uncle Sam must also outlaw, or at least punitively tax, washing-machine repairs.  After all, if fewer washing machines are repaired, Whirlpool will sell more washers and, hence, be protected from the cruel injury that it now suffers at the hands of appliance repairmen and of consumers who so greedily use these repair services.

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