Here’s a letter to someone who tells me that he recently began to read Cafe Hayek in order “to see what impractical libertarians think.” I’m pretty sure that the impractical one is him.
Mr. Dan Garrison
You believe that the U.S. government acts legitimately when it retaliates against what you call foreign-governments’ “market distorting trade interventions.” And you wonder why I am not led by my “libertarian principles to support our government’s endeavors to move the world further to free markets.”
While nothing would please me more than for the entire world to move further toward free markets, I have many reasons for opposing Uncle Sam ‘retaliating’ against other government’s even when the alleged justification for such ‘retaliation’ is to promote freer markets. Here are three.
First, the U.S. government has a long history of adopting policies that result in unintended ill-consequences. What reason is there to suppose that when Uncle Sam uses trade restrictions to retaliate against foreign governments that the results will generally be the good ones that are intended rather than – as is too often the case – bad ones that are unintended?
Second, it is too incredible to believe that further restricting economic freedom here at home today will lead to greater economic freedom at home and abroad tomorrow. Freedom is furthered by actually making the economy freer rather than by making it less free.
Third and more fundamentally, because the U.S. government itself routinely intervenes into markets in economically distorting ways, I can only laugh at the claim that when it intervenes in distorting ways in alleged response to foreign-government interventions that the U.S. government truly is doing so with the goal of making markets freer. To entrust the U.S. government with the power to intervene in the economy in the hope that that power will be used to eventually reduce interventions into the economy makes no more sense than to entrust an alcoholic with a case of whiskey in the hope that that whiskey will be used to eventually reduce the alcoholic’s addiction.
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