Let’s approach this from another direction. Whenever I buy from them [tobacconists and other merchants], I transfer money to which I hold proper title. It wasn’t a gift, so that means I’d previously provided services to somebody. The tobacconist doesn’t buy my services, but someone else does. Meanwhile, the tobacconist spends the money I give him to buy other people’s products and services. This suggests that when we abandon barter, what looks like two-sided exchange is really triangular, even though one of the parties is absent. In fact, the emergence of triangular exchange marks the move from barter to money. (“Hey, I know what I’ll do. Even though I don’t want this rice being offered for my products, I’ll accept it in exchange because I know I can trade it to someone else for what I do want.”)
For example, if the Chinese want to subsidize particular goods, Americans can benefit by buying them at artificially low prices. In the extreme case of China giving goods away free, it takes a lot of imagination to construct a model in which this “dumping” would be bad for the U.S. overall (though it might harm some American producers).
South Dakota’s impertinent law reflects this fact: Governments often are reflexively reactionary when new technologies discomfort established interests with which the political class has comfortable relations of mutual support. The state’s sales-tax revenue have grown faster than the state’s economy even as Internet retailing has grown. Its brick-and-mortar retailing survived Sears, Roebuck, and then survived Walmart (often better than Sears, Roebuck has). Indeed, many brick-and-mortar retailers are now bricks-and-clicks enterprises, offering online shopping.
Traditional retailing will, like Walmart (which is now being challenged by Amazon), prosper or not depending on market forces, meaning Americans’ preferences. State governments should not try to prevent this wholesome churning from going where it will.