MCViewPoint

Opinion from a Libertarian ViewPoint

The Dumbest Thing Ever Said about Trade – LewRockwell

Posted by M. C. Fox on September 4, 2018

Trade fosters peace and goodwill.

The only battlefield we should be worrying about is the marketplace.

https://www.lewrockwell.com/2018/09/laurence-m-vance/the-dumbest-thing-ever-said-about-trade/

By 

Just recently, on the South Lawn of the White House, Trump spoke about the U.S. economy after the Bureau of Economic Analysis released the latest GDP figures. Naturally, since Trump is an economic nationalist with a mercantilist mindset, and his ignorance and incoherence on trade know no bounds, he made these statements:

Perhaps one of the biggest wins in the report, and it is indeed a big one, is that the trade deficit—very dear to my heart, because we’ve been ripped off by the world—has dropped by more than $50 billion. $52 billion, to be exact. It’s dropped by more than fifty. Think of that. The trade deficit has dropped by more than $50 billion.

At the same time, we are finally cracking down on decades of abusive foreign trade practice. We were abused by companies. We were abused by the companies within countries. But in particular, we were abused by countries themselves, including allies. Abused like no nation has ever been abused on trade before. Because we had nobody watching. They stole our jobs and they plundered our wealth. But that ended.

Trump makes America sound like a helpless, abused stepchild.

Perhaps the dumbest thing that Trump has ever said about trade (see the opening and last quotes) is that via trade, other countries can come in and steal the wealth of America.

Trump completely misunderstands the nature of trade.

Trade is voluntary commercial exchange, usually of a good or service for cash. Although trade is properly just engaging in commerce, it is commonly what we call international commerce. Free trade is just commercial freedom from government interference.

That trade takes place between entities residing in two different countries is of no consequence. Exports are not preferable to imports. Manufacturers who export should not hold a protected position in a nation’s economy. Merchants who import should not be penalized for doing so.

Trade is not a national game in which some countries are winners and some are losers. Trade is not a zero-sum game in which one side gains at the expense of the other. And neither does trade take place between an “exploiter” and an “exploited.”

Trade is always a win-win proposition. In every exchange, each party gives up something it values less for something it values more. Each party to a transaction values differently the goods or services being exchanged. Each party anticipates a gain from the exchange or it wouldn’t engage in commerce with the other party. And each party will repeat the exchange again if its estimated gain has proved to be satisfactory.

Trade promotes efficiency in production and utilization of resources. Trade gives consumers a wider variety of choices and contributes to price stability. Trade leads to innovation and investment. Trade fosters peace and goodwill….

Be seeing you

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