Wednesday, March 14, 2018

Goods, Borders, and Armies

When Don Boudreaux latches onto an issue, it tends to be with a great deal of tenacity. For quite some time, that issue was the minimum wage, but lately and for obvious reasons, it has been tariffs and protectionism.

In a letter to the New York Sun published today on his blog, Boudreaux points out not just the obvious holes in the case for "national security" as a reason to put tariffs on steel and aluminum, but also notices that if the national security case was sound, the kvetching about "unfair trade practices" by other governments would be irrelevant.

I want to hit one "national security" angle that I don't think Boudreaux has touched yet. Actually, he may have, because he's been posting two or three items on tariffs/protectionism per day lately and I may have missed it. But anyway:

"When goods don't cross borders, armies will."

That saying is often attributed to Bastiat, but it's actually Otto T. Mallery.

So suppose that the US buys lots and lots of steel from, say, China. And suppose that that steel is vital to national security.

The fact that China supplies the US with all that steel is an incentive for the US to NOT go to war with China since it needs the steel, and it's an incentive to China to NOT go to war with the US since it needs the money.

I just went looking for a video clip of an old episode of The West Wing, where Toby Ziegler makes the point I'm making here ...

... and that's pretty much the case. Tariffs and protectionism are the opposite of "national security."

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