≡ Menu

Quotation of the Day…

… is from pages 199-200 of Douglas Irwin’s 2017 volume, Clashing Over Commerce:

Of course, the [antebellum U.S.] tariff on imported iron harmed other domestic industries, particularly iron-using industries, and raised the cost of bridges and other infrastructure projects, farm implements, and railroad construction.

DBx: Those who would “Make America Great Again” with protective tariffs should – but do not – confront this inconvenient fact: because tariffs invariably raise the cost of many inputs used in domestic production – including in the construction of infrastructure – protective tariffs reduce output and employment in domestic industries and projects that do not compete directly with foreign producers.  (Note: a credible case can be made that nearly all imports are inputs in domestic production.)

Protectionists are simply blind to all consequences of trade restrictions – economic, ethical, and political – that occur after the first and most-obvious consequences.  Intellectually and ethically, protectionism is a train wreck.