Opinion from a Libertarian ViewPoint

Protectionism Is Immoral, Unjust, and Corrupt | Mises Wire

Posted by M. C. on November 4, 2021

All trade barriers rest upon the moral premise that it is fairer for the US government to effectively force an American citizen to buy from an American company than to allow him to voluntarily make a purchase from a foreign company. US trade policy assumes that the moral difference between an American company and a foreign company is greater than the difference between coercion and voluntary agreement. The choice of fair trade versus free trade is largely one of When is coercion fairer than voluntary agreement?

James Bovard

Protectionism is reviving in Washington on both sides of the political aisle. Democrats are cheering proposals to restrict trade to benefit labor unions and save the environment while some Republicans are reviving Smoot-Hawley style salvation schemes. Protectionist advocates routinely seize the moral high ground—at least as it is scored in Washington—by promising that restricting imports will magically produce fair trade.

Thirty years ago, in my book The Fair Trade Fraud (St. Martin’s Press), I sought to drive a wooden stake into both the intellectual and moral pretenses of American protectionism. Obviously, that wooden stake “didn’t take.” So here’s a recap of why government cannot make trade more fair by making it less free.

Protectionism produces political corruption, economic stagnation, and international conflict. Yet many people will insist that even though protectionism hinders a nation’s ability to feed, clothe, and house itself, the moral gains from protectionism are greater than the economic losses. But what is the moral core of protectionism? What is the ethical basis for fair trade as it is practiced?

American trade law is dedicated to the pursuit of the just price—but only for imports. Medieval theologian Duns Scotus declared that a price was just when “the owners of things…. preserve equality of value in the things exchanged, according to right reason judging of the nature of the thing exchanged in relation to its human use.” US trade law assumes that imported goods have an objective value in themselves which can be determined in a bureaucratic vacuum thousands of miles from the market where the product is exchanged. The soul of American trade law is that bureaucrats and politicians, not buyers and sellers, are the proper judges of fair value. All the absurdities, biases, and scholastic methods of the US dumping law follow from this principle.

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