Applied to protectionism
On his Cafehayek -Blog today, Don Boudreaux gave a great quote From a book by William Graham Sumner. The book is entitled Protectionism: the ‘ISM that teaches that waste makes richness. You have free access to that book on the Liberty Fund site here.
Here it is quote:
If it was now possible to come up with a schedule of legislation that, according to protectionist ideas, should be exactly the right tax jacket that fits in this country today, How long would it fit? Not a week. Here are 55 million people on 3½ million square miles of land. New communication lines are opened every day, new discoveries are made, new inventions produced, new processes applied and the result is that the industrial system is constantly moving and changing. How, if a correct system of protective taxes at any time was a feasible thing, the congress could keep track of the changes and instructions that would be necessary. The idea is ridiculous and it is a monstrous matter.
That insight reminded me of a part of Robert Nozick’s Anarchy, state and utopia entitled “How liberty dumping sets patterns.” Nozick points out that if the distributionists get their way, so that everyone has the ideal amount that he or she should have (ideal based on their standards), this will not last long. Some people will spend money on seeing, say, want to play Chamberlain, basketball. In fact, many people will do this. As a result, Chamberlain wants to be rich and he does not have the first distribution he was allowed: he will have more. And some people who pay to see him play basketball will have less than the first ideal distribution.
In short, Liberty disrupts patterns.
Similarly, let’s say that Trump gets his way, whatever that is, and we get the ideal trade balance with every country. (That is a huge assumption, because Trump seems to want a zero commercial balance with every country, which would necessarily lead to a reduction of foreign investments in the United States or an increase in American investments in other countries. But let’s assume.)
Now someone in the United States decides that he wants to buy more clothing from Vietnam. He wears it and other people notice it and want to buy more. Within a few months the trade balance with Vietnam will become negative. We buy more from them than buying them from us.
That’s no problem. But for life channels such as Donald Trump it is a problem.
Liberty disrupts patterns, including trade vi.