Here’s a letter to the Wall Street Journal:
Editor:
Robert Rubin identifies three reasons why running a government differs from running a business (“The Limits of ‘Running Government Like a Business’,” January 18). But he misses a fourth reason, one especially important given Donald Trump’s obsession with tariffs and reducing America’s so-called ‘trade deficit’ – namely, unlike a business, a country does not succeed economically by selling to others as much as possible while buying from others as little as possible.
A business has no standard of living; it’s a tool for transforming inputs into outputs in order to raise its owners’ standard of living by increasing their ability to consume. The people of a county, in contrast to a business, do have a standard of living, and it rises as their access to goods and services for their consumption rises. America succeeds economically only insofar as her people’s standard of living rises – that is, only insofar as the value of the goods and services that we receive from those with whom we trade, domestically and abroad, is greater than the value of the goods and services that we give in exchange.
Because protectionists like Trump mistakenly think of America as a business, they try to run it in a way that we sell as many goods and services as possible to foreigners while we receive in exchange from foreigners as few as possible goods and services – folly that should be, but obviously isn’t, obvious. These protectionists don’t see that by thereby artificially reducing our access to goods and services they reduce our standard of living and make our economy less successful.
Sincerely,
Donald J. Boudreaux
Professor of Economics
and
Martha and Nelson Getchell Chair for the Study of Free Market Capitalism at the Mercatus Center
George Mason University
Fairfax, VA 22030