There is a fundamental misconception of international trade. Under various disguises and confusion, it is that the collective state, instead of persons and trade in private organizations. Recent illustrations are worth reporting.
At his so -called ‘mutual rates’, President Trump said (‘Trump’s next rates round – 25% on steel and aluminum – was not so easily averted” Wall Street JournalFebruary 9, 2025):
Very simple, they charge us, we bring them up.
Translating the grandiosis “we” into the real reality, what he says is: “Very simple, a foreign state rates rates about American exports, the American state charged with exports of the foreign state to America.” Students from the university economy know that a rate is a tax that is charged for importers when a good enters the country and that this tax is generally transferred to domestic consumers through an equivalent price increase. So what Trump really says is: “Very simple, a foreign state charges a tax on its inhabitants, my own state will charge an equivalent tax to our own residents.” Your tribe or collective damages itself, the tribe or the collective that I will run its members an equivalent damage; It’s that simple.
The basic economic theory not only shows this conclusion, but it is constantly confirmed by experience to the point at which the mere announcement or expectation of domestic rates starts to push the price of the imported goods And replacement domestic goods. In the Wall Street JournalGreg IP writes (“Inflation helped Trump chosen. Now it’s his problem“February 13, 2025):
This week, [Trump] announced 25% rates for all imported steel and aluminum and said that mutual rates on a wider range of products and countries are in the making.
Importers and suppliers are already responding. Steel companies have already increased prices. Since Trump’s rate announcement, futures contracts have risen by around 6%to an index of steel prices of midwest.
Instead of “steel companies have already raised prices”, it would be more precisely to say that the buyers of domestic steel all offer the price of steel in the expectation of stricter quantities on the domestic market.
Another recent case is perhaps even more revealing from the collectivist character of protectionism. (Let’s not be afraid of the word ‘collectivist’. Communist countries, including the old Soviet Union, claim the collectivist label precisely to emphasize the primacy of collective choices about individual and private choices; but it is still collectivism when the degree of degrees of Scope of the supremacy of the collective is smaller.President Donald J. Trump imposes rates for import from Canada, Mexico and ChinaIn which we read:
Access to the American market is a privilege.
What does that mean? Foreign Affairs of an American citizen, or one in which he has shares, cannot export his true to Americans living in America without the permission of the US government? An American who lives in America cannot import what he wants without conditions that have been freely agreed with a foreign producer or even an American who produces abroad? A foreign producer may not offer Americans to what they want to buy? In other words, certain trading activities are, for foreigners and Americans, a privilege that is granted by the collective (or his representative) that can also require a reduction (a rate) on trade. This is a fairly extraordinary and shameless explanation.
Trade is exchange. What about the American market for friendship or dating? Is access to this (even virtual) market a privilege for foreigners?
As we can see, the basic error to come up with international trade is carried out as a trade carried out by ‘countries’. The normative dimension of this error is that the freedom to act does not have to be with individuals and their private organizations, but in a collective law controlled by the state. This is not compatible with a free society, a society of free individuals.
Via two private parties voluntarily and indeed mutual Acting with each other – say, a poor American in Appalachia and a much poor employee in Thailand or Vietnam – who exchanges American dollars against a textile product through an intermediary such as Walmart. We can say: the man (both men) is freedom! The woman (both women) is freedom! Compare this situation with the power of politicians to decide whether or under what conditions the exchange may continue. It is not pejorative but admirative (we can open our mouths with awe) that Howard Lutnick, now secretary of the trade, spoke about Donald Trump (“‘He is Power’: billionaires stand in line for the inauguration of Donald Trump” Financial timesJanuary 20, 2025):
“The man is power,” said Lutnick van Trump in a speech on Monday in the Capital One Arena, where the president’s supporters gathered to see that he was being sworn in. “He is power.”
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Brave New World: Exchange two collectives