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Protectionists Never Level With You

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In my latest essay for AIER, I argue that free trade is fair trade [2]. Tariffs imposed in the home county – regardless of actual or ostensible reason – tilt the playing field in the home country unfairly against the many and in favor of the politically powerful few. A slice:

Nearly all protectionists today express support for free trade. But there’s always a “but,” as in “but it must also be fair trade.” Appearing to be an unobjectionable qualification to the case for free trade, such a “but” is in fact not only a wholesale rejection of the case for free trade, it is also a stealthy endorsement of unfair trade.

Protectionists typically pull off this deception by inappropriately using the metaphor of the level playing field. Protectionists assume that, just as a football game is played ultimately for the benefit of the players and for the pride of each team’s fans, economic competition is carried out ultimately for the benefit of the producers and for the pride of each country’s citizens.

If this protectionist assumption were correct, then it would indeed be true that the imposition by country A of tariffs on imports it receives from country B would unfairly tilt the playing field in favor of country A. It would also be true that fairness would be served — the playing field would be leveled — if country B retaliated by imposing tariffs on imports from country A.

But the protectionists’ assumption is invalid. Economic activity and the competition it sparks are not contests carried out for the benefit of producers or to discover which country will win and which will lose on the merits. Instead, economic activity is a process whereby all people try as best as they can to improve their and their families’ standards of living.

It’s true, of course, that in this process producers compete against each other to assist consumers in their efforts. It’s true also that this competitive process means continually discovering which producers have the appropriate talent and game plan to excel and which don’t. But unlike in a sporting event, enabling these discoveries is not among the ultimate purposes of the competition. Discovering which producers best serve consumers is merely a byproduct of consumers’ striving to improve their living standards and producers’ competing to be of the greatest possible assistance to consumers.

To grasp this reality is to understand that tariffs imposed by, say, the Chinese government on imports into China are not unfair to Americans. Yes, Chinese tariffs and other trade restrictions do make it more difficult for some American producers to sell in China. But these tariffs have almost no effect on what ultimately matters to Americans — namely, the ability of American consumers to improve their living standards.

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