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Bonus Quotation of the Day…

… is from page 9 of Thomas Sowell’s 1974 volume, Classical Economics Reconsidered (original emphases; footnotes deleted):

The mercantilists conceived of wealth in competitive terms, as something taken from one another, as inherently differential gain, like winning a race. It was only “the demand of strangers” which could increase the wealth of a nation, according to mercantilist doctrine.

DBx: Sowell here quotes from Sir James Steuart‘s 1767 mercantilist tract, An Inquiry Into the Principles of Political Economy.

Every word about trade that comes out of Trump’s mouth reveals him to be an unreconstructed mercantilist. In remarks that I cannot now find (but which I don’t hesitate to report because they are completely consistent with all that Trump says about trade), Trump yesterday said something to the effect that the new trade deal with Canada and Mexico will enable North Americans to better compete against others.

This attitude is deeply mistaken. Countries (or regions) do not compete against other countries (or regions) in the way that businesses compete against each other. Not remotely. (Paul Krugman’s Pop Internationalism remains the single best modern debunking of the myth that countries compete against each other economically.) The point of trade policy should not be to open foreign markets for domestic producers but to clear away domestic obstacles that obstruct domestic citizens from buying as much as they want from abroad.

And so many of the provisions in the new U.S. trade deal with Canada and Mexico that many people are hailing as ‘victories’ for America are, in fact, defeats; they are higher obstacles to American imports. That these obstacles aren’t nearly as high as some worried they’d be had Trump simply blown-up Nafta does not make this new deal praiseworthy.


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