Sunday, April 9, 2017

Just Shoot Me

A Don Boudreaux letter to a first-time correspondent:
Mr. Vic Smith
Mr. Smith:
Thanks for your e-mail.  After reading my most-recent missive against the U.S. Export-Import Bank, you object to what you call my “na├»ve willingness to unilaterally disarm us in our trade war with China.”
With respect, what you (and many others) call a trade war is quite the opposite of war.  It’s peaceful trade.  And through such trade we Americans are made better off the less we export in exchange for what we import.  So to the extent that the Ex-Im Bank succeeds in its mission to artificially increase American exports, it makes us worse off by arranging for us to sacrifice for the imports we receive an unnecessarily larger amount of exports.  Put differently, the Ex-Im Bank obliges us to work harder to maintain and improve our standard of living.  How are we enriched by such an outcome?  In what universe is such an outcome a victory rather than a defeat?
Yet if you insist on using inapt military analogies, here’s a more fitting one.  The Chinese government, by using its own export-subsidizing agencies, is daily bazookaing the Chinese people.  What you propose is that the U.S. government arm itself equally well and recommence its daily bazookaing of the American people and that Uncle Sam continue to bazooka us as long as Beijing continues to bazooka the Chinese.
Politicians and bureaucrats in Washington undoubtedly profit by inflicting economic harm on the American people.  And they’ll undoubtedly continue to do so.  But at least you should stop gluing a big, bright target to your wallet while holding it up high and eagerly pleading for these officials to shoot their weapons at it.
Donald J. Boudreaux
Professor of Economics
Martha and Nelson Getchell Chair for the Study of Free Market Capitalism at the Mercatus Center
George Mason University
Fairfax, VA  22030
The above originally appeared at Cafe Hayek


  1. Mercantilists will always misconstrue decisions made by consumers not in their favor as 'warfare',as an act of aggression against them. Never mind it's ot their money to begin with, they still feel entitled to it. They're thieves, except more cowardly, for thieves at least accept the risk which comes with their activities. Mercantilists want the consumers to hand them over their wallets while making patriotic exhortations.

    1. the Government wants factories and your capital on hand to use for its own interests

  2. And on both sides of this intellectual argument we have people who have never made a product in the USA or China but think they know what is best. It's all theoretical to them.

    From both these sides we have a bad deal for people in the USA who actually are involved in making product for living. Sure China's policies work great for economists and financial people who are far removed from how stuff is made because the stuff they buy costs them less however this benefit is from their personal perspective. Their salaries and jobs aren't tied to it. There is benefit but no cost. For those that do cheap Chinese made products are little comfort when there is less/no work. They would be more than willing to live without various low priced Chinese made items if it meant the work they need for their essentials. On the other hand maybe we can retrain them to be economists and financial advisers and fund managers and such?

    Many products are coming from China so cheaply directly because of subsidy to capture market share, not labor cost. Labor is often a very small portion of modern products.

    Now tariffs and domestic cronyism in response to China's government policies and subsidy certainly are not the answers but it is a political problem that does need to be addressed in some manner.

    1. Oh cry me a river. "My industry is just too competitive so I need the government to fix that".

    2. Such a display of a typically statist attitude of using government to live at the expense of others. Why don't you just write "I love the low prices government and central banking provide me at cost to others"?

      Don't worry about me, I compete just fine. Doesn't matter to my salary where its made. Aggravation level yes, salary, no.