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Quotation of the Day…

… is from page 47 of the 1991 Robert Schalkenbach Foundation edition of Henry George‘s 1886 volume, Protection or Free Trade:

And since other countries are not going to deluge us with the products of their labor without demanding the products of our own labor in payment, any increase in our imports from the abolition of protection would involve a corresponding increase in exports.

DBx: In practice, yes. Foreigners sell to us only because they want stuff from us in return.*

But reducing tariffs in the United States – that is, reducing the punitive taxes that Uncle Sam now levies on Americans who purchase imports – would also in practice increase non-Americans’ investments in the U.S. Such increased investment by foreigners, of course, would cause the U.S. trade deficit to be higher than it would otherwise be. In response, economically ignorant people would complain, and assert that the rising U.S. trade deficit is evidence that we Americans are ‘losing’ at trade, that other governments are ‘taking advantage’ of us, that foreigners are ‘cheating,’ and that the trade deficit itself spells future doom for the U.S. economy.


* It truly would be wonderful for us Americans if non-Americans behaved toward us economically in the way that protectionists believe foreigners behave. It truly would be wonderful for us Americans if foreigners really did send to us the likes of automobiles, tires, sugar, blueberries, steel, aluminum, and you-name-the-American-import and demanded nothing in exchange (or demanded the equivalent of nothing, namely, pieces of paper smeared with green ink and featuring monochrome portraits of dead Americans). But non-Americans on this front are just like Americans: they don’t work for free.