I explained it to you briefly, and you don't understand that I can tell. I'm suggesting following logic to improve our lot, and therefore must feel I'm as good a friend in this as can be.
I will also say that your reply, namely "with friends like you for our country, who needs enemies?!" is purely an ad hominem irrelevancy, which certainly may be considered patently as offensive as it is unresponsive once again, to my remarks. I've yet to see, by the by, a refutation of the plain economic reality that tariffs inhibit trade and the well-being of all concerned. Retaliation doubles tariffs in place, and increases the long term negative effects on the people of countries involved.
The black & white dollar and cents reality of this argument is something I expect I'll not find refuted(haven't yet). Here's an excerpt which lays out the economic realities of tariffs, from a truly exceptional book by Henry Hazlitt. Amazingly, I just discovered it is available for reading online, and I highly recommen doing so using the second link below. The excerpt picks up with an example in which a tariff has been ended, as follows:
"For now sweaters that formerly cost $20 apiece can be bought for $15. Consumers can now buy the same quality of sweater for less money, or a much better one for the same money. If they buy the same quality of sweater, they not only get the sweater, but they have $5 left over, which they would not have had under the previous conditions, to buy something else.
With the $15 that they pay for the imported sweater they help employment -- as the American manufacturer no doubt predicted -- in the sweater industry in England. With the $5 left over they help employment in any number of other industries in the United States.
But the results do not end there. By buying English sweaters they furnish the English with dollars to buy American goods here.
This, in fact (if I may here disregard such complications as multilateral exchange, loans, credits, gold movements, etc. which do not alter the end result) is the only way in which the British can eventually make use of these dollars.
Because we have permitted the British to sell more to us, they are now able to buy more from us.
They are, in fact, eventually forced to buy more from us if their dollar balances are not to remain perpetually unused. So, as a result of letting in more British goods, we must export more American goods. And though fewer people are now employed in the American sweater industry, more people are employed -- and much more efficiently employed -- in, say, the American automobile or washing-machine business.
American employment on net balance has not gone down, but American and British production on net balance has gone up.
Labor in each country is more fully employed in doing just those things that it does best, instead of being forced to do things that it does inefficiently or badly. Consumers in both countries are better off. They are able to buy what they want where they can get it cheapest. American consumers are better provided with sweaters, and British consumers are better provided with motor cars and washing-machines.
Now let us look at the matter the other way round, and see the effect of imposing a tariff in the first place. Suppose that there had been no tariff on foreign knit goods, that Americans were accustomed to buying foreign sweaters without duty, and that the argument were then put forward that we could bring a sweater industry into existence by imposing a duty of $5 on sweaters.
There would be nothing logically wrong with this argument so far as it went. The cost of British sweaters to the American consumer might thereby be forced so high that American manufacturers would find it profitable to enter the sweater business.
But American consumers would be forced to subsidize this industry.
On every American sweater they bought they would be forced in effect to pay a tariff of $5 which would be collected from them in a higher price by the new sweater industry.
Americans would be employed in a sweater industry who had not previously been employed in a sweater industry. That much is true. But there would be no net addition to the country's industry or the country's employment.
Because the American consumer had to pay $5 more for the same quality of sweater he would have just that much less left over to buy anything else. He would have to reduce his expenditures by $5 somewhere else.
In order that one industry might grow or come into existence, a hundred other industries would have to shrink. In order that 20,000 person might be employed in a sweater industry, 20,000 fewer persons would be employed elsewhere.
But the new industry would be visible. The number of its employees, the capital invested in it, the market value of its product in terms of dollars, could be easily counted. The neighbors could see the sweater workers going to and from the factory every day. The results would be palpable and direct.
But the shrinkage of a hundred other industries, the loss of 20,000 other jobs somewhere else, would not be so easily noticed. It would be impossible for even the cleverest statistician to know precisely what the incidence of the loss of other jobs had been -- precisely how many men and women had been laid off from each particular industry, precisely how much business each particular industry had lost -- because consumers had to pay more for their sweaters.
For a loss spread among all the other productive activities of the country would be comparatively minute for each. It would be impossible for anyone to know precisely how each consumer would have spent his extra $5 if he had been allowed to retain it.
The overwhelming majority of the people, therefore, would probably suffer from the optical illusion that the new industry had cost us nothing."
But please, read on and learn that Mr. Hazlett knows full well as you do and I both do, that ending tariffs can destroy specific industries in America:
chariscorp-wordgems.com chariscorp-wordgems.com
Never-the-less, he concludes with the truth: "As a postscript to this chapter I should add that its argument is not directed against all tariffs, including duties collected mainly for revenue, or to keep alive industries used for war; nor is it directed against all arguments for tariffs.
It is merely directed against the fallacy that a tariff on net balance "provides employment," "raises wages," or "protects the American standard of living." It does none of these things; and so far as wages and the standard of living are concerned, it does the precise opposite..."
Dan B. |
