Mr. Charles Benoit
Coalition for a Prosperous America
Mr. Benoit:
In your attempt to justify punitive taxation by the U.S. government of Americans’ purchases of imports, you get much wrong, both economically and factually (“Adam Smith’s Enemy Was the East India Company, Not the Tariff of 1789,” June 12). Here, though, I address only one of your errors – namely, your insistence that Scott Lincicome erred in suggesting that Adam Smith would have opposed U.S. protectionism.
If you read – in full – Smith’s Inquiry Into the Nature and Causes of the Wealth of Nations, you’ll find that, while Smith did indeed powerfully oppose the British East India Company, his case for free trade went far beyond opposition to monopoly trading companies. Smith was an ardent free trader who would have warned against the protectionism in America that you celebrate.
This fact about Smith is perhaps best established by pointing to his four, and only four, exceptions to his case for free trade: national security; using tariffs to pressure other governments to lower their duties; ensuring that imports are taxed at the same rate as domestically produced substitutes; and sometimes removing tariffs gradually, rather than all at once, in order to ease workers’ adjustment to a free-trade regime. None of these exceptions justifies what you allege Smith would support: a permanent tariff wall around a nation.
Furthermore, the Wealth of Nations is filled with passages that are impossible to square with your attempt to portray Smith as a man who would have supported protectionism. Here’s just one example:
All systems either of preference or of restraint, therefore, being thus completely taken away, the obvious and simple system of natural liberty establishes itself of its own accord. Every man, as long as he does not violate the laws of justice, is left perfectly free to pursue his own interest his own way, and to bring both his industry and capital into competition with those of any other man, or order of men. The sovereign is completely discharged from a duty, in the attempting to perform which he must always be exposed to innumerable delusions, and for the proper performance of which no human wisdom or knowledge could ever be sufficient; the duty of superintending the industry of private people, and of directing it towards the employments most suitable to the interest of the society.
You may disagree with Smith, thinking him to have been mistaken to support free trade. But you cannot credibly assert that he would have supported American protectionism.
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
