Posted tagged ‘Tariffs’

Prosperity Comes From Free Markets Not Government Planning

January 26, 2017

Thomas Sowell said: “The first rule of economics is scarcity. There is not enough to satisfy what everyone desires. The first rule of politics is to ignore the first rule of economics“. When individuals are free to decide what to produce, consume, exchange and save according to their subjective valuations, inside this world of scarcity, the result is a higher standard of living with the least amount of waste and a high degree of individual want satisfaction. Government economic planning creates a lower standard of living with a high amount of waste and a low degree of individual want satisfaction.

Here is a video from Prager University (click here) giving some examples of why free markets are better than Government planning.

 

TRUMP’S MARKET INTERVENTIONS

We should be pushing back when Trump talks about trade barriers, to save or bring back ‘American’ jobs, and infrastructure spending. These are government interventions into the free market and we know what the results will be: 1) an over all lower standard of living, 2) a waste of resources, labor, time and capital, 3) less want satisfaction.

Tariffs save some jobs at the cost of higher prices for consumers. The money used by consumers to pay the higher prices can’t be used in other areas of commerce. This ultimately means more net jobs are lost than saved by tariffs. Unfortunately the jobs saved are seen and the jobs lost are unseen as Bastiat wrote about in the 1800′s.

Every dollar “invested” by Government is first taken from the private sector. In other words the individuals subjective value on how to he will use what he has produced, is replaced by the subjective valuations of bureaucrats on how they will use what they didn’t produce. What happened to all the infrastructure spending in Obama’s $900 billion ‘American Recovery and Reinvestment Act’ of 2009? Remember Obama saying, “Shovel ready was not as shovel ready as we expected.”

 

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Free Trade or Trade Restrictions: Which Leads To Prosperity?

March 16, 2016

Free Trade Is The Path To Prosperity, by Georgi Vuldzhev, at mises.org. РWhen people make voluntary exchanges,  both parties actions reveal that they value what they have received more than what they have given up. It is an increase of value for both parties. Without trade each of us would have to produce all the goods we wanted to consume. Would you have enough time or knowledge to pull this off? No chance! If you had to pull this off, would you be poorer? Absolutely! When government interferes with trade (voluntary exchange), society becomes less prosperous. Are you listening Mr. Trump, Mr. Sanders, and Mrs. Clinton? Politicians purchase votes, at a low cost, with protectionist rhetoric. Unfortunately the high cost of government trade restrictions, subsidies, and tariffs, is paid by consumers and workers who lose their jobs.

Donald Trump vs. Milton Friedman on Trade Policy. by Mark J. Perry, at carpediemblog. – In time of war countries blockade their enemies ports to prevent imports from coming in. Why? Because it harms them economically. Tariffs are the same as blockades. Blockades prevent trade, which causes economic harm. Henry George said: “What protection teaches us, is to do to ourselves in time of peace what enemies seek to do to us in time of war.” Donald Trump has proposed a 45% tariff on Chinese goods. Just because you are successful in the business world doesn’t mean you know anything about economics.

Here is the video from LibertyPen

 

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