Saturday, February 3, 2018

on free trade vs. protectionism

A few thoughts:
-It's generally a good thing to expand opportunities for voluntary, mutually-beneficial trade.
-We impose trade restrictions when we're trying to harm other parties-- e.g., boycotts, blockades, embargos, sanctions. So, when we impose restrictions on ourselves, we're imposing net costs on ourselves.
-If other countries impose costs on themselves, it's not wisdom to kick ourselves in the shorts.
-If trade restrictions are a net good for our country, then they should be good for Kentucky...and Jefferson County...and...
-There are a handful of non-economic arguments for restricting trade-- most notably, national defense-- where we might accept economic inefficiency to reach other policy goals.
-The most common arguments are to protect jobs-- and it may be a good thing to help a few folks, but only if it's understood that the restrictions necessarily shrink the economic pie overall.
-We can see that arguments for protectionism are oversold in that "free trade agreements" are hundreds or thousands of pages long. A true "free trade agreement" would take a paragraph or two. The length implies that interest groups are able to wield legislation in their favor in a decidedly non-free manner.


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