With friends like this, who needs an enemy?

Some presidents like Donald Trump have covered their protectionism with American flags. But all recent presidents have maintained a long line of protectionist policies, and Joe Biden is clearly on that list.

These national policies are at least based on the idea that “good” American producers should treat “bad” foreign producers for the good of our country. But that leaves an important group out of the political equation – the American consumers. And our common interest as consumers is what we have in common. As a result, as Leonard Reed puts it, “consumer interests are the basis on which all economic reasoning should proceed,” and since “my interest is gradually served by the proliferation of products and services voluntarily obtained in exchange for my offer … as a consumer, I I like freedom. ”

Unfortunately, the story of patriotic protectionism confuses the friends and foes of American consumers. Our so-called enemies, the foreign producers, are actually our friends, and our supposed friends, the domestic producers and the US government, are actually our enemies.

How is it that domestic producers are so often the enemy of domestic consumers? It is in their interest to limit competition for consumer patronage, to increase their prices and profits, to the detriment of consumers. Adam Smith is famously noted in it Wealth of Nations“People in the same trade rarely get together … but the conversation ends with a conspiracy against the public or some conspiracy to raise prices.” This is why Smith advocated market competition, criticizing the behavior of traders who were in favor of limiting it. Open competition for everyone’s voluntary offers weakens the business’s ability to abuse its consumers.

In contrast, consumers are the only clear friends who offer a better combination of their price and product. By improving the offers of others, they further the interest of the buyers. Yet domestic producers often use those consumer benefactors as bitter enemies.

Significantly, however, history has shown that effective collusion against competitors is difficult to form and sustain, as it is difficult to establish and maintain agreements on a number of policies and activities, controlling members’ incentives to “cheat” on such agreements and excluding entrants. Who will compete with them. Merchants, leaving only their devices, often fail in such endeavors.

This is why when our government formulates or maintains protectionist policies, it is also the enemy of domestic consumers. The government can solve the problems faced by such brokers more successfully against the consumer interest because it can use force. It can support anti-competition efforts through regulations (e.g., agricultural marketing orders and crop price support) and government barriers to entry and competition (e.g., licensing restrictions), as well as import duties, quotas and other restrictions (e.g., protectionist policies). Which pretends to protect health and safety), to limit foreign competition.

Another way to put it is, “With a friend like that, who needs an enemy?” Which Yale Book of Quotations The qualities of comedian Joe Adams.

Fortunately, the bad guys in the story of patriotic protectionism, the foreign producers, are actually friends of American consumers. The reason is that their only way to persuade Americans to buy from them is to offer them a good deal that is available internally. In other words, their only way is to advance their own interests Law As friends of American consumers, unlike those of American producers who are targeting them, they are persuaded by the government.

The story of the American producer vs. the foreign producer, where patriotism presumably directs us to favor “our” producers over “their” producers, eliminates the central problem. The essence of protectionism is that our producers are conspiring with our government to harm our consumers. And when we consider the adverse effects on domestic consumers, it destroys the patriotic protectionist story, because patriotism does not mean that our government will help our producers beg our consumers in a negative-aggregate asset-transfer game.

False patriotic protectionism is aided by a distorted view of the pitch trade deficit and surplus, which sees the outflow of financial demands with the trade deficit of nations as evidence of the loss of their citizens. That view is false.

For each person involved, each trade provides a surplus value compared to the cost. As long as it is voluntary and does not involve coercion or fraud, all participants value what they receive more than what they give up. If a country has a trade deficit, it does not change that fact at all, as my trade surplus with my employer and my trade deficit with the supermarket chains do not make me worse. So, if everyone is involved with the benefit in their own eyes, how can Americans be unjustly harmed? As Henry George put it Protection or free trade? (1886): “Trade is … mutual consent and satisfaction … free trade is simply allowing people to buy and sell as they please … protection … to keep people from doing what they want … What can be done for ourselves in peacetime? Enemies want to be with us in war. “

Unfortunately, the protectionist “solution” to trade deficits, by limiting imports, is to reduce mutually beneficial measures. This removes profits (the “surplus” of benefits over costs) Americans get from imports that offer better deals. That is, “fixing” a trade deficit in this way reduces the price surplus that domestic consumers receive from their international exchange.

While patriotism has a general relationship with protectionism, we would do well to remember with Samuel Johnson that this kind of “patriotism” could be “the last refuge of a scoundrel.” True patriotism supports free trade, because foreign producers cooperate with domestic consumers in providing low-cost and high-quality products. As Thomas Payne, the speaker of our revolution, wrote, free trade policies can be excluded from “the basis on which government should be established”, while protectionism represents “the greedy hand of government, pushing itself into every corner and crack,” against some Americans and others.

No rhetorical gameplay denies the fact that trade restrictions are an attack on the well-being of Americans by native producers, as enabled by our government, while free trade only allows us to maintain our freedom to choose who we will associate with in a productive way and how artificial we are. Arrange those associations without restrictions. This kind of protectionism undermines our freedom and our well-being. This is a rejection of American patriotism, not its application.

Gary M. Gals

Gary M. Gals

Dr. Gary Galles is a professor of economics at Pepperdine.

His research focuses on the role of independence, including public finance, public choice, firm theory, industry organization, and the views of many classical liberals and American founders.

His books are included The path to policy failure, Defective premises, Bad policy, Messenger of peaceAnd Line of Liberty.

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