Why Not Free Trade?

I previously mentioned the big reason for free trade: economic efficiency.  Let me mention some types of restriction and the reasons for them.  One obvious one is the protection of so-called intellectual property.  In truly free trade, pirated software (movies etc) would pass unrestricted through international barriers, and so would dangerous products like terrorist bombs, banned drugs and weapons, unsafe pharmaceuticals, and technologies crucial for dangerous weaponry.

Another big and important reason for justifying trade restrictions is promotion of domestic industries.  The so-called Asian Tigers, from Japan to China, all built their industrial and technological bases by restricting foreign imports.  So did the United States 200 years ago.  Tariffs can promote local capital accumulation at the cost of local consumption.

Most of these types of restrictions on trade are aimed at promoting the competitive position or safety of the nation and its population.  Economists, who naturally enough are focused on economic efficiency, tend to decry them.  The less myopic take a more expansive view.

The crucial point in my mind is to be aware of the trade offs.  If you restrict trade, consumers will pay more and efficiency is reduced.  Is what you get for that worth it?  The nonsense of Trump and Brexit doesn't pass this test.  The only test it passes is satisfying the reptilian brains of the Yahoos.  We shall see how much they like it when they pay the toll.


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