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Managing to Get a Better Understanding of Trade

In my latest column for the Pittsburgh Tribune-Review I argue that the state is no more justified in “managing” trade that crosses political borders than in “managing” trade that is purely domestic. A slice:

When I ask — as I frequently do — proponents of government management of international trade to explain why trade with foreigners differs from trade with fellow citizens, I’m usually met with looks of astonishment. The difference seems so obvious that I must be blind to miss it.

But when I press for a specific answer, the astonishment turns to uneasiness. When obliged to identify a substantive and relevant difference between international trade and purely domestic trade, no one offers a good answer.

Some people who think my question is silly will suggest that dollars spent abroad don’t “come back” to America. But then I ask: “Do non-Americans so admire the likes of Washington, Lincoln and Franklin that they want to acquire and hoard as many as possible small monochrome portraits of these dead U.S. statesmen?” Obviously not.

Foreigners do with dollars the same things Americans do with dollars: spend them or invest them in the United States.

Others who think my question to be silly point to American jobs lost when Americans buy imports. I respond by pointing to American jobs lost when Americans change their eating habits. The Atkins diet, for example, destroyed jobs in bakeries and breweries and created jobs on ranches and in slaughterhouses.

Any change in the ways people spend their money destroys some particular jobs and creates others. Buying more tomatoes from Mexico is no different on this front than is buying more beef from New Mexico.