≡ Menu

Protectionism is Predation, Pure and Simple

Here’s a letter to the Wall Street Journal:

What the Trump administration celebrates as its accomplishments in renegotiating NAFTA are nothing other than special privileges granted to select domestic producers that will necessarily come at the larger expense of all American consumers and of those many American producers who aren’t among the select to be favored (“Trump Hails U.S.-Mexico Trade Pact, Says ‘We’ll See’ With Canada,” August 27). It’s a damn shame that such government actions are not seen as the thuggery that they are.

Suppose that the Crips take over Westchester County. The actions that Crip leaders would take on the trade front differ in no essential respects from those that the Trump administration are taking today. In order to bestow favors on their business friends in Westchester, the Crips would threaten to slit the throats or break the knees of residents of Westchester who buy from suppliers outside of Westchester more than the Crips assert to be appropriate.

Now in order to drum up yet further business for their cronies, the Crips might try also to open markets outside of Westchester – markets into which their cronies could sell. Crip leadership would negotiate a trade agreement with, say, the Bloods who control Nassau County. And one result of any such agreement would be that the Crips would “concede” to allow those over whom they exercise their gang rule to buy more from Nassau County in exchange for the Bloods “conceding” to allow their hostages in Nassau County to buy more from Westchester.

While the outcome – greater freedom to import – is an improvement over the status quo, it falls far short of the ideal, which in each county is the complete absence of any such gang-inflicted thuggery.

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