In the median industry … over $42 is transferred from consumers to producers for every $1 in efficiency costs caused by the tariff.Oh look, tariffs are a way of creating monopoly, stealing from consumers, and giving to producers, all in the guise of protecting domestic industry. And that's 4000%?
Saturday, October 15, 2011
Required Reading
Robin Hanson finds it:
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9 comments:
I'm skeptical of the 42/1 ratio. The numbers weren't adding up from the cited studies when I ran out of article.
To just mindlessly lower trade barriers doesn't look like a good long term strategy. A trade policy should serve a people, not vice versa.
Trade policy, like all government action, is slang for we'll shoot you if you do what's good for you instead of what we tell you to do.
Any two people trade because it's good (by their judgement) for every person involved in the trade.
Trade policy is when other people NOT involved point guns and say "if you trade, we will take some of your money."
We have a trade policy because big corporations make huge dollars off local consumers when we have a trade policy...and they can't steal so much money without such a line.
Part of this is the trade in radioactive isotopes, dangerous organisms (micro and otherwise), unstable chemical explosives, etc.
You assume the "market" will manage this stuff. I'm not so sure.
The parts of government we should keep revolve around collective action for the greater good.
RSF,
1. I will grant that my opposition to government interference with dangerous activities is among my craziest positions.
2. Government can (a) actively participate in the choosing of winners and losers, or (b) participate only in protection of individuals. Your greater good line ends up bing a choice for (a). I personally choose (b), and therefore oppose action "for the greater good". The road to hell is paved with government agents acting in their estimates of our best interests.
Tariffs are active participation in the choosing of winners and losers, and making HUGE motions of cash to favored groups. I'm pretty universally opposed to action that makes $50 for GE, and costs me $51.
Aretae,
Governments have to raise money to do all the numerous wicked things they like to do somehow. A tariff is one way to do that. All taxation methods create winners and losers. IMO the tariff is one of the least offensive ways to raise X dollars. Way less offensive than an income tax, which requires the government to send armies of auditors everywhere throughout the land and meddle in every single transaction.
Jehu,
That's among the best arguments I've heard for tariffs. At the same time...that argument for tariffs may be substantially undermined by the study Robin is referencing, suggesting that tariffs disrupt the economy massively (40:1) as compared to their net cost to the economy OR their revenue.
Government can...participate only in protection of individuals.
I realize the "greater good" is fraught with baggage, but many of the same problems arise when one aspires to protect only individuals. The ball tends to roll back to the bottom of today's bowl.
RSF,
I'm an instinctive libertarian, so I haven't really gotten a good handle on what those problems are. At the same time...I am constantly being reminded of the fact that there are many sides to all problems, and if it isn't math, there isn't a single, obvious, right answer. Hence...
Can you explain?
Every math problem I look at has many solutions. It depends on what values I plug.
What do you think "protection of individuals" entails? It seems that everything gov't does can be cast as "protection of individuals". Environmental rules: protects the individual from toxins. Commerce rules: protects the individual from fraud/theft. Etc.
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