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Protectionism Is An Unjust Assault On Fellow Citizens

In my latest column for AIER I explain that protectionism protects the politically influential not so much from imports or foreign competitors but, rather, from fellow citizens peacefully spending their own money. A slice:

American consumers often take advantage of attractive bargains offered by producers located outside of the United States. American producers who compete with those foreign producers too often respond by doing what producers have done for centuries – namely, cowardly cajole and bribe government officials for protection from consumers.

Of course, the resulting protectionist measures are commonly described as providing not protection from consumers but “protection from imports,” or “protection from foreign producers.” But this language misleads. Imports are lifeless; they don’t act under their own volition. Nor are imports created and offered for sale by non-human forces. The ultimate source of the ‘harm’ that American producers complain of isn’t imports; it isn’t even the foreign producers who offer their wares for sale to Americans. The ultimate source of this ‘harm’ is American consumers. If American consumers choose not to buy imports, no foreign-based producers would spend scarce resources producing goods for sale in America, and no imports would arrive on American shores. American-based producers are ‘harmed’ by imports only because and insofar as these goods are chosen to be purchased by American consumers.

This matter isn’t one of ‘mere semantics.’ Saying that imports and foreign producers inflict harm on American workers, or on the American economy, creates the false impression of America being invaded by hostile forces. Yet in reality imports are invited by American consumers as a means of improving their lives. To recognize this reality is to recognize that the ultimate target of tariffs and other protectionist measures is not a collection of inanimate objects. Nor is this target a cabal of foreigners seeking to profit at Americans’ expense. The ultimate target of protectionism is fellow citizens peacefully spending their own money. These fellow citizens are treated as enemies whose voluntary actions must be curtailed.

But obviously, demonizing fellow citizens who do nothing more than peacefully seek to satisfy their legitimate wants in ways they judge most efficacious is unlikely to work. So the demonization must be of the means that these fellow citizens use to satisfy their wants. And when these means include the efforts of foreigners, demagoguery is too easy. “Oh look!” cries the protectionist. “The sale here in America of imports destroys some American jobs and businesses. We’re being harmed by foreigners stealing our markets! For the good of our country, stop them!”

No such demagogic outburst would work if it were more honestly expressed as “Oh look! The spending by our fellow citizens of their own money as they choose destroys some American jobs and businesses. We’re being harmed by fellow citizens’ peacefully satisfying their wants! For the good of our country, stop them!”

In the previous paragraph I write “more honestly” rather than simply “honestly.” The reason is that the destruction of particular jobs and businesses caused by voluntary changes in the ways that consumers spend their money does not harm the economy. Quite the opposite. Our modern prosperity exists only insofar as consumers are free to spend their money in whatever peaceful ways they choose. It is this freedom that enables consumers to reveal which particular goods and services they want eagerly enough to justify being produced. The further this freedom is restricted, the more meager is the knowledge about how resources can best be used. Such restrictions cause this knowledge to become narrower and blurrier. Resource waste intensifies. Some human wants that could be satisfied remain unsatisfied.

The freedom of consumers to spend their money as they peacefully choose is called “consumer sovereignty.” It’s an indispensable feature of a prosperous economy.

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