Ms. Clinton:
In your most-recent debate against Donald Trump you effectively expressed agreement with his ignorant notion that international trade is a zero-sum game. You did so by promising to prosecute Chinese steel makers who dare to sell to us steel at prices that you, or some bureaucrats, deem to be too low.
Nothing that I or any other economist can say today to challenge your and Mr. Trump’s economic illiteracy is new. It’s all been said before, countless times – and irrefutably to any and all who think soundly about the matter. So I content myself here to quote from a speech delivered in 1904 by Winston Churchill at Free Trade Hall in Manchester, England. I add, in brackets, only a couple of changes to show that Churchill’s words spoken in England more than a century ago remain relevant to the here and now:
Another important source of Lancashire [American] wealth is the manufacture of machinery and the high-grade manufacture of iron and steel of all kinds. You will see for yourselves without any elaboration how necessary a supply of cheap steel is to all those who are engaged in the manufacture of machinery. But Mr. Chamberlain [Ms. Clinton, like Mr. Trump] proposes to shut out the cheap steel that comes in from abroad, and mind you, the cheap steel that comes in from abroad not only comes in itself cheap but it reduces the price of the steel at home, and if you shut out the supplies of cheap steel from abroad you cannot fail to hinder our trade in machinery. And observe that in the iron and steel trade much the most profitable part is the trade in machinery, because it is in the complicated manufactures of iron and steel that labour is most generously rewarded and most varied, and it is in the higher-grade industries that it is most important for an old country like ours to obtain and maintain commercial leadership.
I don’t for a moment expect Churchill’s words to cause you to rethink your hostility to free trade; you crave power, not truth. But I do want you to know that you and Mr. Trump are merely the latest drum majors in a long, shameful parade of charlatans and scammers who absurdly promise the masses that greater prosperity is to be had if only they’ll agree to pay higher prices for the goods and services they consume.
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 22030
…..
(Ignore Churchill’s closing bit about “commercial leadership”; it’s an economically meaningless term and concept.)
