In theory, the goal for all of this trade disruption was to negotiate lower tariffs. In reality, it hasn’t worked. Global tariffs have gone up. That’s a bummer for the small and midsize companies that moved production back to the United States from China before the trade dispute started. Over 50 percent of the U.S. tariffs on Chinese imports are on intermediate goods, parts and materials used to make finished U.S. products. This reality means that production costs have increased for these firms dramatically.
Blaming foreigners is a cheap and ages-old political trick, but one that too often wins political office and public applause for those who play it. Falling for this trick has ill consequences beyond relieving us of the need to take personal responsibility for our actions. Falling for this trick also further fuels unjustified fears of foreigners — fears that impoverish us by prompting us to reject opportunities for mutually beneficial trade and cooperation with foreigners.
A history book can be a historic act if, by modifying a nation’s understanding of its past, it alters future behavior. Obviously Vietnam itself was insufficiently instructive. On Page 752, the book’s concluding words are [Walter] Boomer’s: “It bothers me that we didn’t learn a lot. If we had, we would not have invaded Iraq.” Sometimes, contrary to Marx, history repeats itself, first as tragedy, then not as farce but as tragedy again.
But Mill and Sidgwick assumed that since they could not imagine a private solution, government provision of the service itself must be necessary.
And that’s not true. Markets are at least as adaptable as government, and in many cases the capacity for innovation, especially regarding local externalities, is far greater. In fact, as Candela and Geloso point out in a Public Choice paper, the range of creative responses can be remarkable. The solution is not a pure market outcome, of course, because government action and enforcement of property rights are an indispensable part of efficient market processes. The lighthouses of coastal England in 1840 were not pure market entities, but rather a kind of hybrid.
Despite its perennial appeal in coffee shops and on college campuses, socialism fails wherever it steps in to protect flabby enterprises from the lethal winnowing of competition. Legacy companies naturally act to preserve the status quo, because the past was where they flourished. Give them the protection, the special favor, of state power and they will use it to snuff out young and vigorous competitors while they have the chance.
The same is true of the so-called capitalists who seek to convince governments that they are too big to fail, and therefore require special care and favors. If granted, those advantages ultimately weaken society by stifling initiative.