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Protectionists’ Greed is Blinding – and Abominable

Pasted below is a letter in response to a commenter on my most-recent AIER essay. (This commenter – with the bizarrely appropriate nom de plume “Bureau of Censorship” – sounds suspiciously like a long-time but recently departed Cafe Hayek commenter.)

Mr. or Ms. Censorship:

Commenting critically on my essay “Trade Has No Losers,” you complain that your “real estate development business attempted to import $1 billion of willing and able Chinese capital into my U.S. projects, which could not be achieved because of the Chinese government’s capital restrictions.” From this personal experience you conclude that I’m in an “academic bubble” in which I “play semantics with language” rather than “look at the real world.”

You misunderstand the point of my essay and the case for a policy of free trade.

I don’t doubt – and I’ve never denied – that the Chinese government interferes massively with its citizens’ freedom of commerce. Nor do I question either the reality of your experience or the fact that your net wealth would be higher were Beijing to behave differently. But your experience does nothing to undermine the case for a policy of free trade.

Nothing in your experience is uniquely connected to trade. The U.S. government itself massively diverts capital away from more-productive to less-productive uses. It does so in many ways that have little or no connection to trade, including housing subsidies, the Small Business Administration, and boondoggle infrastructure projects. Governments worldwide routinely harm their countries’ economies in these ways. Beijing is hardly alone here.

Your complaint – because you imagine that punitive American tariffs might prompt Beijing to change its behavior – is connectedly to trade only superficially. In substance you’re complaining about how the Chinese government treats its people. I agree that this treatment is shoddy. But the harm you suffer is merely collateral; the main victims are the Chinese people. As long as we live in a world in which governments are regarded as sovereign, it’s up to the Chinese people to change their governments’ policies. It is no business of yours or of Uncle Sam’s.

And were Uncle Sam to grant your demand for punitive tariffs, it – and you – would commit an ethical offense against Americans that differs in no relevant way from the ethical offense that you complain that Beijing commits against its citizens.

I say the following with all due respect: the very fact that you apparently condone tariffs and other trade restrictions through which the U.S. government mistreats your fellow citizens in the same way that Beijing mistreats Chinese citizens reveals that it is you who resides in a bubble – a bubble of your own narrow self-interest, one that severely distorts your vision of the real world.

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