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… is from page 200 of a 1961 edition of James Boswell’s 1791 The Life of Samuel Johnson as this passage is found on the back cover of the December 1992 issue of the Journal of Political Economy:

I mentioned Dr. Adam Smith’s book on the “Wealth of Nations” which was just published, and that Sir John Pringle had observed to me, that Dr. Smith, who had never been in trade, could not be expected to write well on that subject any more than a lawyer upon physick. JOHNSON. “He is mistaken, Sir; a man who has never been engaged in trade himself may undoubtedly write well upon trade, and there is nothing which requires more to be illustrated by philosophy than trade does. As to mere wealth, that is to say, money, it is clear that one nation or individual cannot increase its store but by making another poorer: but trade procures what is more valuable, the reciprocation of the particular advantages of different countries. A merchant seldom thinks but of his own particular trade. To write a good book upon it, a man must have extensive views. It is not necessary to have practised, to write well upon a subject.”

DBx: It’s worth noting that the tory Samuel Johnson (pictured here) and the liberal Adam Smith were not deep admirers of each other, although there was mutual respect.

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Here’s a letter to a new correspondent.

Mr. K__:

Thanks for your latest email. You write:

I am not an economist so pardon my ignorance, but I don’t follow your and John Lott’s disagreement.

I appreciate the opportunity to clarify my last post.

Almost all economists from Adam Smith forward have staunchly opposed tariffs. Yet – and here’s the crucial point – it’s more accurate to describe that opposition as being to protectionism. This opposition is to the widespread notion that the general populace of a country can be enriched by protecting domestic producers from foreign competition. It’s opposition to the popular belief that protecting domestic producers from competition increases domestic employment, raises domestic wages, fuels domestic economic growth, and is necessary to ensure an appropriate “balance of trade.”

The case against protectionism as a means of improving the economy is so powerful, both theoretically and empirically, that protectionism can be dismissed as a sound economic policy as a matter of principle.

But because tariffs have been, and remain, the dominant means of protection, opposition to protectionism is commonly expressed as being opposition to tariffs. This wording would present no problem if tariffs’ only function were protection. Tariffs, however, can be used for purposes other than protection, especially to raise revenue.

Because John Lott is correct to observe that all taxes distort private economic decision-making, there’s no reason in principle to dismiss the possibility that taxing imports can be part of a system of raising revenue in the least-distorting way possible. Although, as economist Brian Albrecht explains, tariffs have many shortcomings even as a revenue-raising device, the opposition to tariffs for which economists are famous is opposition to protective tariffs, not to what are called “revenue tariffs.”

It’s true that Trump and his supporters – having to do P.R. for a harmful policy that Donald Trump has been obsessed with for at least 40 years – sometimes mention revenue, national security, Brazilian internal legal issues, and other non-protectionist goals to justify the administration’s tariffs. But these non-protectionist goals are not the main purpose. Protectionism is.

I urge you to read the vast bulk of what Trump has said about trade over the decades – and the vast bulk of what he says today; consult his 2017 inaugural address; scour the case for tariffs made by Peter Navarro, Robert Lighthizer, Stephen Miran, and other of Trump’s close trade advisors; sample some of the many books, essays, and tweets by Oren Cass and other “National Conservatives” who generally support Trump’s trade policies. What you’ll discover is that they are consumed with fear that America’s economy has been “hollowed out” by free trade (it hasn’t) and that U.S. trade deficits are a calamity (they’re not). Their solution to these (imaginary) problems is protective tariffs. And it’s to this protectionist “solution” that I and other serious economists object and continue to believe, with good reason, will do damage to the American economy.

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

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Here’s a letter to the New York Post

Editor:

John Lott’s attempt to shield Trump’s tariffs from the criticisms of economists misses the mark (“Hey, experts — admit what you got so wrong on Trump’s tariffs,” August 7, 2025). I and other economists oppose these tariffs because, in both intent and effect, they are protectionist. These levies are meant to restructure the U.S. economy and eliminate trade deficits by dramatically reducing imports. It is this protectionist effort that we oppose, and that we predict will inflict economic harm on ordinary Americans.

Mr. Lott, however, inexplicably treats the debate as if it’s not about protectionism but, rather, about the best way to raise revenue, ensure national security, and pry open foreign markets.

Nearly every economist, including me, admits that tariffs might well have a role to play as part of the mix of taxes to raise revenue, as well as to achieve narrowly targeted national-security goals.

As for the claim that these tariffs pried open foreign markets, much of this is exaggerated. Worse, because U.S. tariff rates are now multiple times higher than before Trump took office – a fact consistent with these tariffs’ protectionist intent – we Americans are paying higher prices and the allocation of American resources is distorted, just as economics predicts.

Only by ignoring the main, protectionist purpose of the president’s tariffs is Mr. Lott able to paint economists as clueless ideologues whose objections to these tariffs have allegedly been proven wrong by Mr. Trump.

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

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Phil Magness and Alberto Mingardi, writing in the Wall Street Journal, decry Trump’s elimination of the de minimis exemption of small mail- and on-line order purchases from abroad; now, even small purchases from abroad will be tariffed. A slice:

Proponents of tax increases on others seldom like to pay them personally. Tariffs are no different. The White House claims its tariff revenue is coming from foreign countries, but Americans will soon pay new levies on small packages from abroad because of an executive order President Trump signed last week.

On Aug. 29, the U.S. will end its de minimis exemption, which grants Americans a tax break for small mail-order purchases from abroad. For the first time since 1938, international packages will arrive with a tariff bill to be paid by the recipient. That means your next eBay purchase from Europe will incur a 15% tax. Your online coffee order from Brazil will face a 50% markup. And everyday purchases from Amazon Haul, or its Chinese competitor Temu, will come with a surcharge matching the tariff on its origin country. If a postal carrier isn’t equipped to calculate the fee according to Mr. Trump’s ever-changing tariff schedule, the new tax is a minimum $80 flat rate per package. In total, Mr. Trump’s order will put tariffs on the estimated 1.36 billion packages that Americans receive every year from online purchases that were previously tax-exempt.

Tax hikes are seldom rewarded at the ballot box. That’s why the White House is trying to justify its order by saying the de minimis exemption is abused to send fentanyl and other synthetic opioids undetected. The vast majority of fentanyl smuggled into the U.S. comes from one country: Mexico. But Mr. Trump is ending the de minimis exemption for packages from all countries. Although fentanyl is a deadly drug, there’s no evidence that taxing worldwide e-commerce will stop drugs from entering the U.S.

Also from Phil Magness is this essay at Law & Liberty in which he offers a credible explanation for the relative reserve (so far) of other governments in retaliating against Trump’s tariffs. A slice:

Trump may be playing with fewer cards than he realizes when he attempts to negotiate tariff deals. The EU and other governments know that time is on their side with both the tariff lawsuits and the US political climate. And that recognition changes the dynamics of their strategies by shifting them away from retaliation. Consider the possible scenarios.

The biggest risk to Trump right now is that the appellate and Supreme Courts both strike down his IEEPA tariff orders, and with them every “deal” he has secured to date. Courtroom outcomes are never guaranteed, and they tend to operate on the judges’ own schedules, but this outcome could conceivably occur in a matter of months. If that’s the case, then the EU has every incentive to take the 15 percent tariff “deal” and just wait it out until the courts make their determination.

Suppose that the Supreme Court punts on the case for procedural reasons, or finds a rationale for upholding the tariff policies. Even in this scenario, waiting may still be the more prudent strategy for the EU and other trading partners abroad. They may be banking on Trump losing one or both houses of Congress in the 2026 midterms, as often happens to the incumbent president’s party. If the Democrats regain the majority, they will almost certainly remove a procedural rule that Republican Speaker Mike Johnson imposed back in April to prevent floor challenges to Trump’s IEEPA tariffs (Johnson adopted this rule because he currently lacks the votes to defeat a direct challenge if a handful of free-trade Republicans break ranks and vote with the Democrats). An opposition Congress would make it more difficult for Trump to enact tariffs by executive decree, thereby limiting his ability to use them as leverage for his “deals.”

David Hebert explains that “tariffs tanked GDP, not imports.” A slice:

GDP is meant to measure the amount of production that happens in a country. Since “production” is difficult to measure in and of itself, the Bureau of Economic Analysis instead measures “expenditures.” This makes sense because, if we think about it, any time we spend money on a good, someone else must have produced that good that we bought.

But what about people who buy American-made products who do not actually live in America? Clearly, we should count that spending, too. Lo and behold, we do, which is why we add exports to American spending totals, reflecting the production that happened here despite the spending happening elsewhere.

Because the BEA, however, tallies all the spending that Americans do in a given period, and Americans also spend money on imported goods, that spending on imports would also be included in this expenditure method. To fix this, the BEA simply subtracts the value of all the goods that we import from other countries.

Caleb Petitt reviews the legal briefs against Trump’s “Liberation Day” tariffs.

My Mercatus Center colleague Jack Salmon makes clear that Trump’s trade ‘deal’ hurt Americans. Two slices:

Behind the fanfare lies a stunning truth: these so-called “trade deals” are actually a massive tax hike on American consumers and businesses. The White House may call it market access, but what we’re really getting is market restriction.

Rather than negotiating mutually beneficial tariff reductions, these agreements have instead carved out politically targeted protections for select sectors while hiking duties on a wide array of imports.

…..

The administration’s messaging is clear: these agreements will “open” foreign markets to U.S. businesses. But let’s be honest, Japan, the U.K., and Vietnam have long been major trading partners with relatively open markets. The true effect of these deals is to make imports more expensive for Americans by replacing lower tariffs with much higher ones.

This is not trade liberalization. Its protectionism rebranded. And it contradicts decades of economic understanding about the benefits of free trade. If anything, these moves are more about serving narrow political interests than promoting prosperity.

Former Speaker of the U.S. House Paul Ryan (R-WI) is correct about Trump’s tariffs:

They justified tariffs based on trade deficit… But then they threw a tariff on Brazil at 50%, and we have a trade surplus with Brazil. There’s no rationale for this other than the president wanting to raise tariffs based upon his whims, his opinions.

GMU Econ alum Dominic Pino reviews Ezra Klein’s and Derek Thompson’s Abundance. Three slices:

In Abundance, authors Ezra Klein and Derek Thompson clearly state their thesis in the introduction: “To have the future we want, we need to build and invent more of what we need. That’s it.” And that’s the problem. Their thesis doesn’t make sense because they fail to consistently define the word that appears three times in that statement: “we.”

Klein and Thompson see their book as a missive to the American left and an antidote to the “degrowth” ideology that has taken hold in parts of it. Their vision for “abundance liberalism” is more about a shift in focus and emphasis than an entire ideological overhaul for the left. It has spurred debate within the left about whether it presents an opportunity to correct some of the mistakes that cost Kamala Harris the 2024 election or is merely a “neoliberal” wolf in sheep’s clothing.

It is neither. People who are more favorable to free markets may be tempted to applaud left-wing authors, conceding that government isn’t always the answer, but Klein and Thompson still don’t understand the role of individualism and markets in creating the abundance they desire.

…..

They are clear about what they want. Their vision of the future involves a lot of green energy, mass transit, housing construction, and research and development investment. They want vertical farming, lab-grown meat, automated technology, and supersonic airplanes.

Some of this vision sounds attractive to me. Some of it does not. That’s fine, and it’s true of all visions of the future. But they assert that this vision is the future that “we” want. I should be included in “we,” but I am not.

…..

Individuals are the ultimate decision-makers in a society. They are naturally part of groups (families) and often choose to organize themselves into other groups (corporations, governments, religious institutions, etc.) in ways that are healthy and beneficial. But individuals in the end have to choose to show up to work, use their brains to come up with new ideas, and persuade others that those ideas are worth developing.

One reliable way to get other people to do things for you is to allow them to make money from doing it. And there is already a mechanism by which that happens: markets. People get paid for coming up with good ideas and providing goods and services that make other people’s lives better. The development and expansion of markets around the world have delivered more abundance than thousands of years’ worth of human thought possible.

One reason markets work is that they do not need there to be “a single set of answers.” They work with decentralized information spread throughout society that is possessed and used by different individuals. That information condenses into a price, which is a signal to others that informs their decisions. They allow for the appearance of top-down coordination where none exists, and they perform better than attempts at top-down coordination because they incorporate information that top-down planners cannot access.

The answer Klein and Thompson are yearning for is markets. But they are respected American liberals, and respected American liberals can’t run around referencing Adam Smith or F. A. Hayek or Milton Friedman. So they’re just lost, aimlessly writing about stuff they want other people to do for them.

George Will wonders how much longer humanity’s luck will continue to protect us from the devastation of nuclear war. Here’s his conclusion:

Thucydides said three things cause wars: honor, fear and interest. Come Wednesday, 29,220 days will have passed since the first use of a nuclear weapon, and 29,217 since the second. What in humanity’s carnage-strewn history of honor-driven angers, rational and irrational fears, and ideologically defined interests suggests there will not be a third, and then others?

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… is from page 180 of Gordon Wood’s great 1991 book, The Radicalism of the American Revolution:

Independence, declared David Ramsey in a memorable Fourth of July oration in 1778, would free Americans from that monarchial world where “favor is the source of preferment,” and where “he that can best please his superiors, by the low arts of fawning and adulation, is most likely to obtain favor.”

DBx: And yet here we Americans are in 2025 with a national government that, with abandon, doles out favors such as tariffs and subsidies – and threatens punishments, such as are delivered with the hammers and tongs of the regulatory state and through lawfare.

Blame belongs both to Democrats and Republicans. For more than a century now the Constitutional architecture has been rearranged to give the government generally – and the executive branch in particular – ever-greater discretionary power. The naive belief (and no belief can be more naive) is that as long as those persons wielding power hold their offices through some connection to the results of majority-rule elections, the power-wielders will pursue ‘the will of the people’ which, being vox populi is as near as possible to vox dei. And these power-wielders, being invested by their democratic elevation with superhuman knowledge, wisdom, and goodness, it would not pay the venal amongst us to petition or plead with them for special favors.

Far too many Americans – always obsessed with achieving, by whatever means, the political object du jour– over the past century-plus have increasingly abandoned the noble, liberal ideas of America’s Founders.

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Here’s a letter to a new correspondent.

Mr. K__:

Thanks for your email.

You write:

What’s wrong with the story of America’s economy growing because of tariffs? I was taught that it produced the great advance in the 1800s and never heard any different until my brother recommended your blog.

You’re hardly the only person to have been taught this fable, but it is, in fact, a fable.

First, the historical evidence from 19^th-century America contradicts this protectionist account. See the work, among others, of Dartmouth economist Douglas Irwin as well as that of Phil Magness. The impressive growth of the U.S. economy in the 19^th century was real, but it occurred despite, rather than because of, protective tariffs. Indeed, on page 284 of Clashing Over Commerce, his 2017 magisterial history of U.S. trade policy, Irwin argues that

import duties may have detracted from US economic performance…. [T]ariffs on capital goods made investment spending more costly and less efficient. The high cost of basic iron and steel hampered the development of downstream industries, such as tinplate, and raised the cost of construction and transportation projects. In addition, protection tended to encourage the survival of smaller, less efficient firms in a given industry rather than larger, more efficient enterprises, thereby reducing an industry’s average productivity.

Second, this protectionist thesis is at odds with historical evidence more generally, which shows that the freer is trade, the faster is economic growth. If protectionism fuels economic growth, India would have boomed under the protectionism imposed on it by the Nehru government, and Cuba would have boomed under the protectionism imposed on it by the U.S. government.

Third, protectionism is the theory that to subtract is to add – that less creates more – that people’s access to goods and services is increased by restricting people’s access to goods and services. If greater abundance really is produced by artificially restricting our access to goods and services, why should the government restrict our access only to goods and services that happen to be supplied from outside of our political borders?

Were the protectionist fable of 19^th-century America true, the U.S. government ill-served Americans by not thinking and acting with sufficient boldness. In addition to restricting Americans’ access to imports, Washington should have ordered each state to restrict its citizens’ trade with citizens of other states. The national government ought also to have imposed punitive taxes on any and all innovations that improved economic productivity: After all, when, say, Carnegie Steel increased through innovation the amount of steel its factories produced in a week, the resulting lower price of steel affected other American steel producers – and American aluminum producers – in exactly the same way as would an increase in steel imports.

Unless you believe that America’s economy would have boomed even better had the government obstructed Americans from accessing not only imports, but also the additional goods and services that flowed forth from rising domestic economic productivity, you should reject the idea that America’s economic growth was fueled by 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

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GMU Econ alum Agustin Forzani writes at National Review about some of “the hidden costs of Trump’s tariffs.” A slice:

Tariffs trigger extensive governmental petitioning by competing groups — a process that’s detrimental to the U.S. economy. Domestic producers eagerly lobby officials for higher tariffs on their particular products, knowing this will allow them to sell more or raise prices without facing overseas competition. But other groups pressure the government in the opposite direction: Consumers and manufacturers want products they normally buy or use as inputs to be exempted from tariffs to avoid higher costs.

These groups could spend substantial time and valuable resources lobbying for tariff increases or exemptions, up to the net present value of all future money these tariffs represent. Crucially, all these resources could be used for something more productive than, say, dining with government officials to secure tariff adjustments. As Tullock observed, “These expenditures, which may simply offset each other to some extent, are purely wasteful from the standpoint of society as a whole; they are spent not in increasing wealth, but in attempts to transfer or resist transfer of wealth.”

Examples of this process are already unfolding. The lobbying sector is experiencing significant growth this year. While few industries will publicly demand higher tariffs on their own products, steel and aluminum producers plainly benefit from protection and have every reason to press for it. Meanwhile, automobile, pharmaceutical, energy, and semiconductor companies are all requesting exceptions for their inputs. Even fireworks retailers, who rely on Chinese imports, are petitioning for exclusions from these tariffs.

Holman Jenkins doesn’t think much of Trump’s erratic trade ‘policy.’ A slice:

The real question is why. Why have this trade war? Why not just enact a consumption or import tax as part of the Big Beautiful Bill?

If one answer is that Mr. Trump wanted a show, the other is that he imagined U.S. law afforded him a show, granting unhindered presidential authority to impose tariffs willy-nilly on the nation’s foreign trade. Get ready for fresh chaos when this legal conceit goes poof in the courts.

If he wanted a show, he also wanted a line outside his White House door of CEOs and lobbyists and foreign leaders pleading for relief. Net result: a meaningful increase in “the swamp.”

This is activity for activity’s sake. If the economy stays good, Mr. Trump will claim credit, never mind that a good economy will have been good despite his trade turmoil. If it falters, get ready for more acts like firing the government’s chief labor-market statistician followed by a new Trump-emceed drama when Democrats reclaim the House and fire up the impeachment machinery.

Jacob Sullum reports on the Federal Circuit’s skeptical reception of the Trump administration’s assertion of the executive branch’s judicially unchecked power to impose tariffs punitive taxes on Americans’ purchases of imports and import-competing products.

National Review‘s Dominic Pino exposes a recent effort by Treasury secretary Scott Bessent to use data to create a false impression.

Peter Earle dives with learning and good judgment into the revisions in the Bureau of Labor Statistics jobs numbers that ignited the Trump fuse that fired the BLS commissioner. Here’s his conclusion:

In short, while the 258,000 revision in July 2025 is undeniably large, it is not an aberration in the true statistical sense. It is an emphatic example of a structural feature of the data — and a call for caution in applying oversimplified models to complex empirical realities. Ironically, casting statistically unusual or politically inconvenient data as conspiratorial will only serve to undermine trust in future releases, rendering them more — not less — politically charged.

This letter in the Wall Street Journal by Naval Postgraduate School economics professor François Melese is excellent:

Last week’s dismal labor market report sent shock waves through U.S. markets. In “Trump Claims the Jobs Report Was Rigged. Was It?” (Life Science, Aug. 4), Allysia Finley describes how President Trump accused the Bureau of Labor Statistics of publishing “rigged” numbers and fired its well-respected commissioner, Erika McEntarfer.

The bureau reported that only 73,000 nonfarm jobs were added in July, well below expectations. It also revised May and June numbers, erasing a combined 258,000 jobs from earlier employment estimates—the biggest downward revision since the pandemic.

Rather than search for economic explanations, the president’s response was to punish the messenger.

The true source of slow job growth is widespread uncertainty as companies are whiplashed by Mr. Trump’s tariff policies. Meanwhile, the large revisions are partly the result of steep budget and staffing cuts the BLS suffered earlier this year. The 2026 budget proposes cutting staff another 8%, from 2,175 to 1,999 full-time-equivalent employees.

Cuts have consequences. Official U.S. unemployment and inflation data are under threat. Going forward, markets should expect greater errors and revisions as the bureau is forced to shrink sample sizes, conduct more limited surveys and issue less frequent updates.

The greater danger lies in bureau employees being afraid to report accurate figures after witnessing the firing of their commissioner.

Greg Mankiw and Cecilia Rouse warn that Trump’s firing of the BLS director will come back to haunt him – and us. A slice:

Politicians spin — it is what they do. But when their spin undermines the integrity of the numbers we have come to rely on, the consequences are real. We will all pay the price.

Missouri farmer Blake Hurst isn’t buying MAGA claims that tighter immigration restrictions won’t reduce the supply of farm workers. A slice:

Until now, we’ve filled our labor shortage with foreign workers, though not without challenges. Still, they show up every Sunday to keep the plants alive and load Monday morning’s deliveries.

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… is from pages 475-476 of the 2015 5th edition of Thomas Sowell’s Basic Economics [original emphasis]:

As for jobs, before the NAFTA free-trade agreement among the United States, Canada, and Mexico went into effect, there were dire predictions of “a giant sucking sound” as jobs would be sucked out of the United States to Mexico because of Mexico’s lower wage rates. In reality, the number of American jobs increased after the agreement, and the unemployment rate in the United States fell over the next seven years from more than seven percent down to four percent, the lowest level seen in decades. In Canada, the unemployment rate fell from 11 percent to 7 percent over the same seven years.

Why was what happened so radically different from what was predicted? Let’s go back to square one. What happens when a given country, in isolation, becomes more prosperous? It tends to buy more because it has more to buy with. And what happens when it buys more? There are more jobs created for workers producing the additional goods and services.

Make that two countries and the principle remains the same. Indeed, make it any number of countries and the principle remains the same.

DBx: One minor clarification: The effect of greater prosperity isn’t so much on the number of jobs – that is largely unaffected by trade – but, instead, it’s on the quality of the jobs. The freer is trade, not only does the number of jobs not fall, the real wages workers rise over time.

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Here’s a letter to Real Clear Policy. (For alerting me to this piece by Jahncke, I thank George Leef.)

Editor:

Attempting to find revolutionary genius in Trump’s 17^th-century mercantilist policies, Red Jahncke repeats familiar fallacies, such as that today’s capital mobility results in low-wage China draining investments away from high-wage United States (“Trump’s Tariffs: Rewriting Economic Thinking About Free Trade,” August 2). In reality, in 2024 net inward foreign direct investment in the U.S. was $388.0 billion while in China it was $18.6 billion, or a mere 4.8 percent of what was invested in the U.S. (On a per-capita basis, net FDI in China was a measly 1.1 percent of that of the U.S.) Indeed, last year almost one in every three dollars of global net foreign direct investment was done in the U.S.)

It’s no surprise, then, that U.S. industrial capacity is today at an all-time high.

Another fallacy served up by Mr. Jahncke is the notion that (in his words) “comparative advantage assumes some minimal level of parity between trading partners.” Using David Ricardo’s famous example of England trading cloth to Portugal in exchange for wine, he writes:

Comparative advantage assumes some minimal level of parity between trading partners, that both have effective production capability – cloth and wine in England and Portugal in David Ricardo’s famous example. Portugal had an absolute advantage in both – but only 10% in cloth versus 50% in wine. So, both countries benefited if Portugal ceded cloth to England and produced only wine.

However, what if Portugal had a 75% advantage in both? Portugal’s huge absolute advantage would have put England out of business.

Mr. Jahncke doesn’t understand comparative advantage.

First of all, in the second quoted paragraph he simply assumes comparative advantage away. By writing that Portugal has “a 75% advantage in both,” he assumes away the one condition that is required for comparative advantage to exist, namely, that one country’s efficiency at producing (say) cloth relative to (say) wine differs from the other country’s efficiency at producing cloth relative to wine. (This move by Mr. Jahncke springs, no doubt, from his ignorance of economics rather than from any intention to hoodwink your readers.)

Second, contrary to the thrust of Mr. Jahncke’s point, the existence of comparative advantage doesn’t in the least depend upon two economies being relatively similar to each other in overall productivity. It’s true that Americans and Canadians both gain by trading with each other according to comparative advantage, but it’s equally true that Americans and the Chinese both gain by trading with each other according to comparative advantage

The irony of Mr. Jahncke’s mistaken argument is that, if it were correct, no tariffs would be necessary to prevent Americans from trading with the Chinese because, to paraphrase Mr. Jahncke, “America’s huge absolute advantage would have put China out of business” (as a trader with the U.S., although not literally). After all, American workers are vastly more productive than are Chinese workers: In 2019, American workers on average produced 6.3 times more output per hour than did Chinese workers.

It’s easy to make a case for protectionism by ignoring economic theory and economic facts. But once these realities are taken into account, the case for protectionism crumbles.

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