Sunday, October 30, 2016

More Questions for Trump and Other Protectionists and Mercantilists

By Don Boudreaux

Donald Trump is a protectionist like many other politicians, save that he unfurls his vast economic ignorance more fully and more proudly than do more seasoned politicians.  I’ve more questions for Trump and his fans, and, indeed, for protectionists of all stripes, colors, and temperaments.  Such as….
– If you buy your tomatoes and okra from a stranger across town and, in response, your neighbor hires a gang of neighborhood thugs to rough you up if you don’t start buying your tomatoes and okra from him, do you regard your neighbor’s actions as just?  After all, his actions increase demand for his output and make him richer.
– If the neighborhood thugs succeed in getting you to buy fewer tomatoes and okra from the stranger across town and more from your neighbor, and if (as is indeed likely) your neighbor is enriched by this thuggery public policy for the neighborhood, do you believe that your neighbor’s increased wealth necessarily means that your neighborhood is thereby made wealthier?  Are you thereby made wealthier?
– Do you believe that the success of the neighborhood thugs in getting you to buy more of your neighbor’s tomatoes and okra will encourage your neighbor to be more attentive to your wishes as a consumer – your wishes as someone who buys tomatoes and okra?  Do you believe that the quality of the tomatoes and okra that you buy from your neighbor under these circumstances will be as high as would the quality of the tomatoes and okra that you buy were there no neighborhood thugs to rough you up whenever you purchase tomatoes and okra from outside of your neighborhood?
– Suppose that your neighbor shows you indisputably correct facts and figures that prove that you and your neighbors have for several years running bought larger dollar amounts goods and services from people who live outside of your neighborhood than people who live outside of your neighborhood bought from you and your neighbors.  Your neighbor explains that this fact – this “neighborhood trade deficit” – is reason enough for him to employ local thugs to rough you up each and every time you buy tomatoes and okra from outside of the neighborhood.  Would you excuse your neighbor?  Would you, in light of these fine facts and figures, volunteer to pay part of the salaries of the thugs who rough you up whenever you spend your money outside of the neighborhood?
– Suppose that your neighbor shows you indisputably correct facts and figures that prove that he hasn’t been working in his garden as much as he normally does, and that the reason is that there is now less-than-typical demand for the tomatoes and okra that he grows and offers for sale.  “Normally,” says your neighbor, “I’d have neither an ethical right nor a good economic justification for employing local thugs to rough you up each and every time you buy tomatoes and okra from outside of the neighborhood.  But because I’m now not working as much as I normally do in my garden, I’m now both ethically and economically justified in employing local thugs to rough you up each and every time you buy tomatoes and okra from outside of the neighborhood.”  Do you accept your neighbor’s reasoning?
– Suppose that your neighbor shows you indisputably correct facts and figures that prove that a homeowners’ association outside of your neighborhood spends part of its budget encouraging its residents to grow more tomatoes and okra.  Your neighbor explains that this fact – this “subsidization of produce by an outside-of-our-neighborhood collective-decision-making entity” – is reason enough for him to employ local thugs to rough you up each and every time you buy tomatoes and okra from outside of the neighborhood.  Would you excuse your neighbor?  Would you, in light of this revelation, volunteer to pay part of the salaries of the thugs who rough you up whenever you spend your money outside of the neighborhood?
– Suppose that you question your neighbor’s claim that subsidization of outside-of-our-neighborhood production of tomatoes and okra by an outside-of-our-neighborhood homeowners’ association justifies his use of thugs to rough you up each and every time you buy tomatoes and okra from outside of your neighborhood.  Your neighbor replies that “such use by that outside-of-our-neighborhood homeowners’ associations of its homeowners’ funds is a clever and crafty way to make that other neighborhood richer at our neighborhood’s expense!”  Do you find this explanation compelling?  Does its asserted truth justify your neighbor employing local thugs to rough you up each and every time you by tomatoes and okra from that other neighborhood?
– Suppose instead that your neighbor shows you compelling evidence that the other neighborhood has been overtaken by a gang of brutish thugs who violently extract resources from the citizens of that other neighborhood.  These brutish thugs spend these extracted resources subsidizing the production of tomatoes and okra grown in that other neighborhood and the sale outside of that neighborhood of those tomatoes and okra.  Your neighbor informs you that these thugs are thereby “strategically” enriching that other neighborhood at our neighborhood’s expense – which is why (your neighbor continues with his scholarly explanation) your neighbor is justified in “strategically” employing local thugs to rough you up each and every time you purchase tomatoes and okra from that other neighborhood.  Do you believe that the gang of brutish thugs in the other neighborhood are really making the people of that neighborhood, as a whole, more prosperous?  Regardless of your answer to the previous question, do you believe that your neighbor is justified in using local thugs to rough you up each and every time you buy tomatoes and okra from that other neighborhood?
…..
Now slightly reword each of the above questions so that “neighborhood” is replace by “country,” “thugs” replaced by “government authorities,” and “tomatoes and okra” is replace by “goods and services.”  I’m distressed, dear protectionist friends, to guess that your answers change when the questions are so reworded.  Can you explain why?
The above originally appeared at Cafe Hayek.

6 comments:

  1. Now imagine that you share the same legacy as 90+ million unemployed or under employed workers in pompous Boudreaux's nicely economically balanced USA. You have no job and consequently you have no home. Now your neighbors are all like you, they sleep under bridges and on storm grates. There are no gardens, only thugs who steal from anyone, your neighbor included. But the law of comparative advantage is nicely humming along with butterflies flying and birds chirping only to crash headlong into the law of unintended consequences.

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  2. 1. How do the protectionists know that our problems are caused by imports? How do they know they aren’t caused by our horrible schools which teach no skills? We have learned from this election that the American people don’t think, can’t think and cannot be shamed into thinking. We know that they know nothing and cannot be shamed into learning anything.

    How do the protectionists know that our problems are not caused by the Fed and its devastating busts where Main Street gets wiped out every few years?

    How do the protectionists know that our problems are not caused by the Fed and its devastating ZIRP which precludes the development of essential and irreplaceable accurate pricing of interest rates and everything else while artificially stimulating the Musical Chairs of unsustainable asset bubbles?

    Trump’s economic “White Paper” accurately points out that the US has the highest corporate tax rate in the world which must be lowered. It also explains unfair value added tax rules regarding exports and imports:

    Under WTO rules, any foreign company that manufactures domestically and exports goods to America (or elsewhere) receives a rebate on the VAT it has paid. This turns the VAT into an implicit export subsidy. At the same time, the VAT is imposed on all goods that are imported and consumed domestically so that a product exported by the US to a VAT country is subject to the VAT. This turns the VAT into an implicit tariff on US exporters over and above the US corporate income taxes they must pay. Thus, under the WTO system, American corporations suffer a “triple whammy”: foreign exports into the US market get VAT relief, US exports into foreign markets must pay the VAT, and US exporters get no relief on any US income taxes paid.

    We also have insane levels of anti-business regulation.

    2. I’ve been meaning to ask the protectionists how it is to be determined which home-grown businesses get protected and which ones do not? And who is supposed to have the knowledge, integrity and insight to make that determination including the appropriate level of protection for each relevant business. Congress? The American voter? See Paragraph 1.

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  3. [[[[[[ NOTE: Germany tried Boudreaux theory on migration on a limited
    basis let us look at what has happened ]]]]]]]]

    GERMANY 2016 2015 2014

    During the first six months of 2016, migrants committed 142,500 crimes, according to the Federal Criminal Police Office. This is equivalent to 780 crimes committed by migrants every day, an increase of nearly 40% over 2015. The data includes only those crimes in which a suspect has been caught.

    Thousands of migrants who entered the country as "asylum seekers" or "refugees" have gone missing. They are, presumably, economic migrants who entered Germany on false pretenses. Many are thought to be engaging in robbery and criminal violence.
    Local police in many parts of the country admit that they are stretched to the limit and are unable to maintain law and order.

    "Drug trafficking takes place right before our eyes. If we intervene, we are threatened, spat on, insulted. Sometimes someone whips out a knife. They are always the same people. They are ruthless, fearless and have no problems with robbing even the elderly." — Private security guard.

    According to Freddi Lohse of the German Police Union in Hamburg, many migrant offenders view the leniency of the German justice system as a green light to continue delinquent behavior. "They are used to tougher consequences in their home countries," he said. "They have no respect for us."

    "It cannot be that offenders continue to fill the police files, hurt us physically, insult us, whatever, and there are no consequences. Many cases are closed or offenders are released on probation or whatever. Yes, what is happening in the courts today is a joke." — Tania Kambouri, German police officer.

    Violent crime — including rapes, sexual and physical assaults, stabbings, home invasions, robberies, burglaries and drug trafficking — has skyrocketed in Germany since Chancellor Angela Merkel welcomed into the country more than one million mostly male migrants from Africa, Asia and the Middle East. Few, if any, of the migrants were vetted before being allowed to enter Germany.

    Migrants committed 208,344 crimes in 2015, according to a confidential police report leaked to Bild. This figure represents an 80% increase since 2014 and is equivalent to 570 crimes committed by migrants every day, or 23 crimes each hour, in 2015 alone.

    The actual number of migrant crimes is far higher, however: the report, produced by the Federal Criminal Police Office (Bundeskriminalamt, BKA), includes only crimes that have been solved (aufgeklärten Straftaten).

    According to police statistics, on average only around half of all crimes committed in Germany in any given year are solved (Aufklärungsquote). This implies that the actual number of crimes committed by migrants in Germany in 2015 may have exceeded 400,000.

    ==========================================

    German Streets Descend into Lawlessness
    "We are losing control of the streets."

    by Soeren Kern
    October 31, 2016 at 5:30 am

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  4. Has Boudreaux even mentioned immigration? Especially to a place that grants to extremely-foreign immigrants subsidies, endless welfare payments, school attendance, free medical care etc. in a nation run mostly by SJWs? As opposed to such people being specifically INVITED into a private property society which can strictly limit the terms of their presence with contractual provisions?

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  5. To the Alt-Righties:

    Mr. Wenzel has made reference over and over on this blog to “LBJ’s Grandkids”.

    http://tinyurl.com/zoqftzp

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  6. A quick perusal of Mr. Wenzel’s associated blog, Target Liberty finds these items posted there:

    http://www.targetliberty.com/2016/01/german-women-describe-being-assaulted.html

    http://www.targetliberty.com/2015/09/refugees-arrive-in-munich-whats-endgame.html

    http://www.targetliberty.com/2016/04/pope-propoganda.html

    I’ve been reading the Vox Day blog daily since June. My impression of his Alt-Rightie commenters is that they are almost as Fact Free as the SJWs.

    Also, is the use of multiple brackets [[[[[ ]]]]] related to the use of multiple parentheses (((( ))))?

    ReplyDelete