Protectionism

Some debates keep going on forever. Does the minimum wage hurt, or help, poorly skilled workers? Do gun control laws reduce “gun violence,” or do permissive carry laws reduce violent crime? Is free trade a good or an evil?

Surprisingly, there is a lot of empirical evidence to help us evaluate these claims. As Thomas Sowell keeps pointing out, before minimum wage laws unemployment among black youth was lower than unemployment among white youth. After minimum wage laws, the opposite was true: black youth unemployment is higher than white youth unemployment. States that changed to a shall issue gun control scheme often had a reduction in violent crime.

A huge experiment in protectionism versus free trade has already taken place.

Many of the United States States have economies the size of European nation states. The US Constitution through the Commerce Clause gives exclusive jurisdiction over interstate commerce to our Federal Government. The Federal Government has never permitted States to impose tariffs against the goods of other States, but it could. Consider it a huge experiment in free trade.

At one time the US economy probably had half the World GDP, and there was a huge free trade zone comprising all of it.

What do the advocates of trade restrictions claim as benefits? They say well paying US manufacturing jobs are “exported” to low paying Mexico or China or Vietnam. Isn’t the same true of Michigan and South Carolina?

Just think, if New York put up a $ 100,000 tariff on cars imported from any other State, the automobile industry in New York would flourish. The Corzone-Trablant factory would have many high paying jobs. Only New York residents could not buy a Telsa, or a Porsche, or a BMW, or a Ford Focus.

Of course other States might, or would, impose a tariff on New York jewelry and paintings.

Could you imagine having to buy everything you buy from producers in your home State? Why limit your choice to products from producers in your home country?

The United States free trade zone has sometimes hurt individual States when they had to complete with more productive higher capital people from other States, but, all in all, it has been a blessing in capitalistic competition and productivity. Allowing the citizens of each state to produce and specialize in what they excel at has made all of us richer.

The largest experiment in free trade of all time has proved itself. No politician even advocates intrastate domestic trade barriers. Yet every claimed benefit of international trade protectionism is available on the State level. All the unheralded detriments are there also.

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