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Economic Ignorance Fertilizes All Sorts of Nonsense

Here’s a letter to Moneyweb; the author of the piece to which my letter is a response is – unsurprisingly – assistant professor of Development Studies at the University of Cambridge:


With his “The free trade myth” (June 23), Jostein Hauge will win no prizes for his economic sagacity. But economic naïveté is one thing, blatant illogic is another. Prof. Hauge first accuses the U.S. of having for years pressed for lower global tariffs to help “large corporations based in the US … expand their dominance in the world economy. Limiting protectionism, especially in developing countries, has enabled US-based corporations to grow their control.” But he then pirouettes into a criticism of the Biden administration for raising tariffs. What gives?

Higher American tariffs will reduce American imports. And reduced American imports, by shrinking non-Americans’ dollar earnings, translate into reduced American exports. Given Prof. Hauge’s belief that these exports harm developing countries, he should applaud Joe Biden – and Donald Trump – for taking steps to diminish US corporations’ ability to peddle their wares, and to exert “control,” in poor countries. In effect, higher American tariffs provide the protectionism to developing countries that Prof. Hauge seems convinced is in their best interest.

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

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