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Economies Don’t Compete Against Each Other

Here’s a letter to my “Trump man” correspondent, Nolan McKinney:

Mr. McKinney:

You write that “The immense pride felt by all Americans when our women’s soccer team defeated all the countries we played to win the World Cup is pride which we should feel about our industries. Like our wonderful soccer team, our economy can also win! That’s what President Trump is about!”

Sigh, sir. So much misunderstanding flows through the above-quoted 48 words that I don’t know where to begin. I’ll content myself to make only two points.

First, unlike the U.S. soccer team, our economy competes with no one. It makes no more sense to talk of the U.S. economy as being involved in zero-sum contests with our trading partners – contests that produce a loser for each winner – than it makes to talk of me being in zero-sum contests with the physicians from whom I buy my medical care and the vintners from whom I buy my wine. Voluntary trade is win-win. It’s an on-going process in which success is measured by how well each person satisfies the demands of others; it’s not a game in which victory’s essence is the vanquishing of losers.

Unlike in soccer matches, we Americans grow and prosper – we ‘win’ – the more the people of other countries also ‘win’ by growing and prospering. To see why, ask how ‘victorious’ I would be at earning a living teaching economics if other people were not victorious at earning their livings at the billions of tasks at which I’m a ‘loser’ – tasks such healing the sick and injured, making wine, manufacturing clothing, growing food, supplying microchips, piloting jetliners, and on and on and on.

Second, Pres. Trump proposes to bring ‘victory’ to select American firms by imposing artificial burdens on their foreign competitors. Some “victory” that. How much pride would you now feel if the U.S. women’s soccer team had won each of its games against opponents who were forced, unlike American players, to wear sandbags around their waists and patches over their right eyes? If your answer is – as it should be – “none,” then you should oppose rather than endorse Trump’s tariffs. Such tariffs make us Americans losers.

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