Here’s a letter to Barron’s:
Errors aplenty permeate Matthew Klein’s argument that Chinese protectionism is “aggression” against the U.S. and, thus, poses a danger to us (“The People’s Republic of Protectionism,” May 5). One prominent error is Mr. Klein’s failure to note that any resources artificially diverted by Beijing into Chinese industries A and B are diverted away from Chinese industries C and D – thus making these latter industries, and the Chinese economy at large, artificially weaker.
A second and even more fundamental mistake is Mr. Klein’s presumption that Beijing rips off the rest of the world to the extent that it succeeds in arranging for the Chinese people to export more and to receive fewer imports in return. Such thinking has matters backwards. Just as you are made richer rather than poorer if your grocer gives you more groceries in exchange for less money, the Chinese make us Americans richer rather than poorer if they give to us more of what they export in exchange for less of what we export.
Thus, while Beijing’s protectionism is indeed “aggression,” it is not aggression against Americans. Beijing’s protectionism is aggression against the Chinese people, for it is they – not us – whose living standards are artificially reduced by Beijing’s policies that oblige them to produce more for us Americans and to receive artificially less from us in return.
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
