Here’s a letter to a new correspondent.
Mr. K__:
You write:
Life is much more than money. It is community, stability, family and neighbors. Who cares if tariffs slow economic growth or even stop it? If they fortify communities they are worthwhile. Period and end of story. The rust belt stands as a warning against “free trade” given how it was destroyed by blind veneration of Milton Friedman economics. I only hope that Pres. Trump’s tariffs are in time to salvage what remains of America.
With respect, I disagree.
First, your complaint isn’t ultimately about trade; it’s about economic growth and change. International trade is only one source of such growth and change. Growth and change occur whenever new technologies are introduced – whenever people’s tastes change – whenever new raw materials are discovered – whenever population expands and sparks new types of labor specialization. Do you really want the government to try to freeze in place all existing patterns of economic activity so that no one suffers the discomfort of change?
And do you think it to have been a mistake that the government in 1925 didn’t impose the draconian measures that would have been necessary to attempt to preserve 1925-vintage economic activities and jobs? Had it successfully done so, the half of our households in 2025 that would have an automobile would drive the equivalent of Model T Fords. A quarter of us would toil on farms and ranches. Half of us would live in households without electricity and indoor plumbing, two-thirds of us would not have telephones, 80 percent of us wouldn’t have radios, and nearly all of us would be without air-conditioning. None of us would have access to antibiotics and the surgeries that antibiotics make possible.
Our life expectancy would be more than 20 years shorter.
What gives us the right today to deny not only to each other, but to our children and grandchildren, the fruits of economic growth that we today take for granted and – I’m quite confident – that even you would be desperate to recover if they were stripped away from you?
Second, your assessment of the fate of the rust belt, while common, is mistaken. As the economist Lee Ohanian found in a 2014 study,
the decline of the heavy manufacturing industry in the American “Rust Belt” is often thought to have begun in the late 1970s, when the United States suffered a significant recession. But theory suggests, and data support, that the Rust Belt’s decline started in the 1950s when the region’s dominant industries faced virtually no product or labor competition and therefore had little incentive to innovate or become more productive.
The rust-belt’s problems were caused not by its industries’ and workers’ confrontation with economic competition but, instead, from their insulation from competition – the same sort of insulation that you now wish the government to impose nationwide. Far from fortifying communities, the tariffs that you and Pres. Trump champion will undermine them and impoverish us all.
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
UPDATE: Thanks to Jon Murphy for reminding me of this superb 2025 study by Jeremy Horpedahl that shows that the rust belt is now doing pretty well.
