Exposing the madness wehind current economic thought

Friday, July 13, 2012

Free trade means free choice

Gary North on the inability of rational people to understand the logic of economics:

We come now to the economic issue that separates the economists from the special interest pleaders. There are a lot of supposedly free market capitalists who shout the praises of open competition, but when the chips are really down, they call for the intervention of the monopolistic, coercive State to keep Americans from trading with other Free World countries. Competition among Americans, but not between American companies and foreign companies: here is the cry of the tariff advocates. The fact that less than 5% of our economy is directly involved in foreign trade never phazes these enthusiasts: free trade is "destroying" the other 95% of the American economy! Somehow, the principles of capitalism operate only within national boundaries. Somehow the intervention of the State will "protect" Americans. Henry Hazlitt's classic little book, Economics in One Lesson, so completely destroys the arguments of the tariff supporters that there is nothing left of their position; still they keep coming. For two centuries their position has been intellectually bankrupt; still they keep coming. Tariffs hurt all consumers except those on the public dole of tariff intervention, e.g., the "infant industries" such as steel or textiles. Yet the advocates say that all Americans are "protected." The logic of economics cannot seem to penetrate otherwise rational minds.