The claims in favor of tariffs and other forms of protectionism are most always the same: Free trade has allowed for the outsourcing of American manufacturing! Free trade has resulted in poor, cheap goods! Americans are enslaved to the Chinese with our trade deficits! The list goes on and on, and each of these claims misses key understandings in trade relations, regulation, and the nature of voluntary exchange.
An exchange will only occur when the two parties involved both value the good that they are receiving more than the good they give up.
The same is true if they wished for more durable "Made in America" goods as opposed to less-durable goods from abroad. Instead, Americans often demonstrate a preference for these cheaper, possibly less-durable, goods through the act of purchasing them.
Through the mere act of purchasing a producer good-or a consumer good that provides continuous use-the purchaser assesses the durability and use of the good.
These consumers decide that the good they are purchasing has value despite their durability and would demonstrate their preference for more durable goods if that was what they desired.
Americans are not being conned by cheap and less-durable goods; they prefer those goods.
The American government creates a hostile environment for domestic manufacturers, and it is American consumers that consume the goods made by foreigners.
No comments:
Post a Comment