Thursday, January 26, 2017

Cynical Protectionism May Be Good Politics, But It Will Never Make America Great Again

By by Jeff Jacoby

Donald Trump ran for office as an unabashed protectionist — it is one of the few political positions on which he never wavered — and hostility to free trade was a central message of his inaugural address.

"We must protect our borders from the ravages of other countries making our products, stealing our companies, and destroying our jobs," he declared. "Protection will lead to great prosperity and strength. . . . We will follow two simple rules: buy American, and hire American."

Cheering in the crowd as Trump spoke, reported Reuters, were numerous supporters wearing his signature "Make America Great Again" baseball caps — many of which were imported from China, Vietnam, and Bangladesh. Made-in-America Trump hats were available for purchase on the official Trump campaign website, where they sold for up to $30 apiece. But as Reuters noted, the imported versions being offered by street vendors in Washington cost only $20 — one-third less.

What distinguished the cheering onlookers rocking a domestic "Make America Great Again" hat from those wearing an imported one? Only one thing: Those who bought the US-manufactured product for $30 ended up with $10 less of purchasing power than those who spent $20 to buy an import. Trump supporters whose caps came from overseas had money left over to spend on other purchases from other vendors.

There, in a nutshell, is the folly of "Buy American."

Of course, everyone who bought a cap did so voluntarily. Those who opted for the "100% American" style from Trump's website may have gladly paid the higher price. But protectionism deprives consumers of their right to choose. When "Buy American" is mandated by law, it forces individuals and businesses to spend more for goods and services than they otherwise would have had to. It leaves them with fewer resources, and fewer resources means less growth, less affluence, less investment.

"Protection will lead to great prosperity," intoned Trump. But that's just what protection won't do. If Congress enacts Trump's protectionist proposals and makes "Buy American" mandatory, whether through higher quotas, import quotas, or procurement restrictions, what follows? The price of baseball caps — and sneakers and cellphones and cars and grapes and lumber — will rise. As a result, fewer people will buy baseball caps (sneakers/cellphones/cars/grapes/lumber). Or they'll buy them less often. Or they'll buy less of other merchandise — including merchandise made in America by American workers whose jobs will be endangered by declining sales.

Protectionism amounts to the claim that everyone benefits when choices go down and prices go up. The only reason more Americans don't dismiss that claim as self-evident crackpottery is because it comes cloaked in the language of nationalistic resentment. Such as Trump denouncing "the ravages of other countries making our products" and urging patriots to support him in "rebuilding our country with American hands and American labor."

Read the rest here.


  1. Bastiat taught us this 150 years ago. It keeps happening because the Seen have State guns, and the Unseen do not.

  2. Don't think your comparison necessarily holds water. I imagine the $30 hats on the Trump Store Site likely had a contribution component attached to them. Whereas the MIC hats did not. I don't know who is a more somber group of people: The butt hurt SJW or all the libertarian faux economist squawking about protectionism and comparative advantage. Despite the fact you think his ideas on trade are whacked out, he WON with them. Get over yourselves.