… is from page 271 of Jacob Viner‘s 1968 International Encyclopedia of the Social Sciences article “Mercantilist Thought,” as this article is reprinted in the 1991 collection, edited by Douglas A. Irwin, Jacob Viner: Essays on the Intellectual History of Economics:
Every measure restrictive of trade established a possibility of private profit from its evasion or violation, and no country was able to prevent extensive violations of the regulatory measures by smugglers, tax evaders, merchants operating illegally in restricted trades (“interlopers”), and bribed enforcement agents.
DBx: Indeed.
A too seldom mentioned downside of protective tariffs is the costs of evasion. While smugglers and their ilk generally find the private benefits of illegally evading tariffs greater than the costs, those costs are real. They consume effort and resources that would otherwise be devoted to productive uses rather than to evading government-erected barriers.
Viner here refers to illegal evasions of tariffs. But there are also legal evasions – namely, rent-seeking efforts – that are no less costly than their illegal siblings. When Tim Cook and other CEOs visit the White House to kiss His Majesty’s posterior – and, more significantly, when they spend money employing lobbyists to ensure that the posterior-kissing continues to pay off – their posterior-kissing and pleading consume resources that would otherwise be used productively.
Trump imposes tariffs a hefty share of the costs of which will ultimately be borne by American households. He then brags about enjoying the posterior-kissing he receives from corporate executives with enough clout to beg him for exemptions from these tariffs. And, distressingly, not a few of these American households believe that they are somehow enriched by Trump having arranged for various people to line up to perform in his cronyist posterior-kissing fests.
