Free Trade vs. Protectionism | Lucas M. Engelhardt

Free trade allows for maximizing the total number of mutually beneficial exchangers and promotes economic progress.

Recorded at the Mises Institute in Auburn, Alabama, on 26 July 2023.

[skulltula]

Of the methods of raising funding for governments, between taxes, tariffs, and currency debasement, tariffs seem to be the least disruptive so long as you have some level of domestic production of that product. Free trade advocates claim that free trade reduce the cost of goods by importing from places with cheaper labor costs, but it also puts downward pressure on wages as local workers are now competing against foreign workers.

You might think that this balances out, but there is one thing that cannot under any circumstance be imported... land and real estate. This creates a situation like we are currently in where wages are to low for home ownership.

Additionally - I am not so convinced that free trade always results in cheaper prices for the consumer. From my own anecdotal experience it seems that the prices on goods once moved abroad to be manufactured stay the same. Companies will continue to charge whatever the consumer is willing to pay for their product regardless of the underlying cost to produce that product. My own company I work for has a plant in MX, and a plant in US. Both charge about the same amount for the same products, but MX workers are paid 1/3rd the amount of our U.S. employees.

The trade deficits are just as inflationary as government deficits. If you have more money leaving the country than is coming in, the only way to make that sustainable is to debase the currency. That robs everyone in the country of their wealth and savings.

[brianzmek]

This talk ignores what I see as the two best argument in favor of Tariffs.
First: given that the state exists Tariffs and Georgian taxes are the least disruptive to the general well-being.

Second: Internal regulatory barriers and foreign subsidies the US is engaged in like the Navy surprising piracy or Foreign aid as well as the enforcement overreach and spying by things like the IRS and the like.

So in practice the real question is would shifting towards Tariffs either reduce economic disruption per unit government revenue & inflation or will it reduce government spending

As an incremental move Tariffs seem to me to be better than what we have.

[JD-oskr]

First!

Free trade is the best way forward. Protectionism is for slimy gangsters.

[renatonigro]

I disagree with that statement. Tariffs and import quotas are ALWAYS harmful.

[eyediscovered]

He fails to explain that consumers can afford to pay a bit more for steel if we have jobs. If there’s no jobs left in manufacturing then there’s too many unemployed Americans who have no money to spend at all.