Tuesday, October 31, 2017

The Trumpista Pickpockets


By Robert Higgs
Since NAFTA went into effect in 1994, U.S. imports of goods from Mexico have grown from about $4 billion per year to about $28 billion (annual rate as of March 2017). Americans have also purchased a lot more services, not counted in this measure, from Mexicans during the past two decades (e.g., tourist services such as entertainment, transportation, and the occupancy of hotel rooms for Americans visiting Mexico). These are goods and services that Americans wanted enough to voluntarily pay for them. These imports represent what trade is for—namely, getting possession of goods and services that foreigners offer for sale on relatively attractive terms. Much of the growth in the volume of imports from Mexico can be attributed to reductions in trade restrictions embedded in NAFTA, which the U.S. government is now trying to scrap or drastically revamp. If NAFTA were such a bad deal, why did Americans voluntarily agree to pay Mexicans for more and more of these goods?
Yes, I know, in some cases these transactions occurred because
Americans purchased goods from Mexicans that they had previously purchased from Americans or might otherwise have bought from Americans. So what? The Acme Corporation doesn’t possess a right to have anyone continue to buy its products. Every seller is constantly at risk of losing out to competitors, foreign or domestic. If I can’t compete with others who supply the same things that I supply—which for me is manifestly the case—-do I have a just right to penalize those who choose to buy from my competitors rather than from me or to send the government to do the dirty work on my behalf?
The so-called protectionism being touted by President Trump and his supporters is little more than picking the pockets of U.S. consumers. Note, however, that much of the goods imported from Mexico consists not of immediately consumable goods, but of producer goods (e.g., petroleum, automobile parts and components of a vast array of other manufactured goods) that help to make U.S. goods better and cheaper than they otherwise would be. The Trumpistas suppose that exports are a benefit and imports a regrettable thing ought to be reduced as much as possible. In this regard, they have matters upside down: imports are what Americans value; exports are directly or indirectly only a means of importing the valuable goods. If you doubt this claim, simply imagine what would be the case if Americans regularly sent vast quantities of goods abroad and got back no goods at all. This situation would give rise to an infinitely positive balance of trade—and amount to an economic disaster. Sad to say, the Trump forces have infused new life into mercantilist fallacies that were debunked centuries ago by Adam Smith, David Ricardo, and a host of economists since their day. It is sad to contemplate how many voters prefer picking their neighbors’ pockets to honestly earning their own way in open competitive markets.
The above originally appeared at the Independent Institute.

15 comments:

  1. Protectionists behave just like how leftist do in they think they know whats good for me more than me

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  2. For Americans a million jobs lost and real wages lowered by 20%.

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    Replies
    1. What Is Seen and What Is Not Seen?

      I have read similar stats about job loss and decrease in wages due to NAFTA but also read that net are exaggerated at best and the decline for blue collar workers have been offset by white collar jobs.

      Factor in that there have been other causes for blue collar decline, that this shift from blue to white collar is part of a maturing economy and the benefits of free trade, overall free trade is economically beneficial.

      One of the benefits of free trade is freedom. Nobody should have the power to dictate who associates with who.

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    2. Re: Alex Zougle,

      --- Nobody should have the power to dictate who associates with who. ---

      Trumpistas operate under the delusion that they get to dictate with whom you associate because the "electorate" chose Trump or something.

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    3. Gotta love democracy. Or in this case a democratic republic that leads to more and more tyranny.

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    4. Maybe those same people should've you know actually learned new skills in order to keep themselves competitive in the job market place

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    5. That's very NY Cynical of you. What we really need is guaranteed income.

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  3. How do we know all these goods got cheaper and stayed that way? Where are the numbers and specific goods? Anyway, let us make America great by deporting every damn illegal immigrant and the legal one's to.

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    1. Hey I know: maybe if you post this another thousand times, someone will deport them for you.

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    2. If we hadn't imported saifullo saipov, 8 Americans would still be alive.

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    3. Re: PH,

      Perhaps instead of leaving such things to anti-market programs suchvas 'lotteries' and leave it to actual gawd-damned people to being in whoever strikes their fancy, then perhaps those victims wouod still be alive.

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    4. Immigration policies today are another example of government dictating associations.

      But lets say Saipov made it to what we call the USA under a PPS. Would the property owner that allowed him in have some culpability in his crimes?

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    5. Re: Alex Zougle,

      --- But lets say Saipov made it to what we call the USA under a PPS. Would the property owner that allowed him in have some culpability in his crimes? ---

      The victims or the families can try and sue the property owner even under a PPS. That doesn't necessarily mean they will prevail. Even so it doesn't mean he's criminally liable, unless he's an accomplice to the act.

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    6. @Alex Zougle

      Absent a contract, it seems that the victim would have to prove negligence on the part of the property owner in order to make him liable for a crime committed on his premises by a 3rd party.

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    7. That all makes sense. So if we turn this back to reality. What is the liability of the US government in the Saipov case? If it can be proved that the governments vetting process was inadequate and admitted a dangerous person, what is the government’s liability? What restitution can the victim’s receive from the government (really from taxpayers)?

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