Missouri's 7th District, U.S. House of Representatives




Congressional Issues 2010

Congress should:
  • abolish all tariffs

Imagine Smith and Jones are competitors. Smith goes to Washington D.C. and promises to help the campaign of Congressman So-and-So if the Congressman will pass a law requiring Jones' customers to pay more money for Jones' product than they would pay for Smith's product.

Smith is using the power of the government to steal money from Jones' customers, in the hope of stealing customers from Jones.

All of this is unethical -- a violation of "the Laws of Nature and of Nature's God." Such laws should be abolished.

A tariff is a government-imposed tax on the products of one business in order to benefit or "protect" a special interest group. Tariffs are therefore called "protectionist" policies. Protectionist policies protect the most uncompetitive businesses. The less competitive American businesses are, the lower our standard of living will be.

Tariffs are usually applied to the products of foreign businesses, which aren't represented in Congress. It makes no sense to force Americans to pay more for the products they want to buy. If a foreign business can create a better product at a lower price, Americans benefit by being able to buy that product. The money they save can be invested in businesses which are more efficient and raise our standard of living.

Tariffs on foreign goods are justified by "us-them" rhetoric which encourages conflict.

"What generates war is the economic philosophy of nationalism: embargoes, trade and foreign exchange controls, monetary devaluation, etc. The philosophy of protectionism is a philosophy of war."
Ludwig von Mises

"Protectionism is a misnomer. The only people protected by tariffs, quotas and trade restrictions are those engaged in uneconomic and wasteful activity. Free trade is the only philosophy compatible with international peace and prosperity."
Walter Block
Senior Economist, Fraser Institute (Canada)

"For thousands of years, the tireless effort of productive men and women has been spent trying to reduce the distance between communities of the world by reducing the costs of commerce and trade.
"Over the same span of history, the slothful and incompetent protectionist has endlessly sought to erect barriers in order to prohibit competition – thus, effectively moving communities farther apart. When trade is cut off entirely, the real producers may as well be on different planets.
"The protectionist represents the worst in humanity: fear of change, fear of challenge, and the jealous envy of genius. The protectionist is not against the use of every kind of force, even warfare, to crush his rival. If mankind is to survive, then these primeval fears must be defeated."
Ken Schoolland
Former US International Trade Commission Economist,
and Trade Advisor to the White House

  • ISIL -- Free Trade or Protectionism?
    • Protectionism: What It Costs
      • LOST JOBS
  • 1,028 Economists Oppose Protectionist Policies
  • Partial List of Tariffs in the United States
  • The 'Fair Trade' Myth
  • Who Benefits From Free Trade, and How - Robert P. Murphy - Mises Institute
  • Trouncing Tariffs - The Acton Institute
  • Selective Free Trade Harms the U.S. Economy - The Acton Institute
  • The Unfairness of Fair Trade
  • William Ewart Gladstone's Great Campaigns for Peace and Freedom| The Foundation for Economic Education: The Freeman, Ideas on Liberty
  • A Tale of Two Tariffs | The Foundation for Economic Education: The Freeman, Ideas on Liberty
  • Oxfam Suggests Benefit in Africa if U.S. Cuts Cotton Subsidies - New York Times
  • From the Concise Encyclopedia of Economics
    • Balance of Payments, by Herbert Stein
      A country is more likely to have a deficit in its current account the higher its price level, the higher its gross national product, the higher its interest rates, the lower its barriers to imports, and the more attractive its investment opportunities—all compared with conditions in other countries—and the higher its exchange rate. The effects of a change in one of these factors upon the current account balance cannot be predicted without considering the effect on the other causal factors. For example, if the U.S. government increases tariffs, Americans will buy fewer imports, thus reducing the current account deficit. But economic theory indicates that this reduction will occur only if one of the other factors changes to bring about a decrease in the capital account surplus. If none of these other factors changes, the reduced imports from the tariff increase will cause a decline in the demand for foreign currency (yen, deutsche marks, etc.) which in turn will raise the value of the U.S. dollar. The increase in the value of the dollar will make U.S. exports more expensive and imports cheaper, offsetting the effect of the tariff increase. The net result is that the tariff increase brings no change in the current account balance.
    • Capitalism, by Robert Hessen
             Simultaneously, from the eighteenth century on, government began to play a more active, interventionist role in offering benefits to business, such as tax exemptions, bounties or subsidies to grow certain crops, and tariff protection so domestic firms would devote capital to manufacturing goods that otherwise had to be imported. Special favors became entrenched and hard to repeal because the recipients were organized while consumers, who bore the burden of higher prices, were not.
             Once safe from foreign competition behind these barriers to free trade, some U.S. producers—steel and auto manufacturers, for example—stagnated. They failed to adopt new technologies or to cut costs until low-cost, low-price overseas rivals—the Japanese, especially—challenged them for their customers. They responded initially by asking Congress for new favors—higher tariffs, import quotas, and loan guarantees—and pleading with consumers to "buy American" and thereby save domestic jobs. Slowly, but inevitably, they began the expensive process of catching up with foreign companies so they could try to recapture their domestic customers.
    • Free Trade Agreements and Customs Unions, by Douglas A. Irwin
             Ever since Adam Smith published The Wealth of Nations in 1776, the vast majority of economists have accepted the proposition that free trade among nations improves overall economic welfare. Free trade, usually defined as the absence of tariffs, quotas, or other governmental impediments to international trade, allows each country to specialize in the goods that it can produce cheaply and efficiently relative to other countries. Such specialization enables all countries to achieve higher real incomes.
              Although free trade provides overall benefits, it hurts some people, most particularly the shareholders and employees of industries who lose money and jobs because they lose sales to imported goods. Some of the groups that are hurt by foreign competition wield enough political power to obtain protection against imports. Consequently, barriers to trade continue to exist despite their sizable economic costs. Although it has been estimated that the U.S. gain from removing trade restrictions on textile and apparel would have been over $12 billion for 1986 alone, for example, domestic textile producers have been able to persuade Congress to keep tariffs and quotas on imports.
             While virtually all economists think free trade is desirable, they differ on how best to make the transition from tariffs and quotas to free trade. The three basic approaches to trade reform are unilateral, multilateral, and bilateral.
             Some countries, such as Britain in the nineteenth century and Chile and South Korea in recent decades, have undertaken unilateral tariff reductions—reductions made independently and without reciprocal action by other countries. The advantage of unilateral free trade is that a country can reap the benefits of free trade immediately. Countries that lower trade barriers by themselves do not have to postpone reform while they try to persuade other nations to lower their trade barriers. The gains from such trade liberalization are substantial: a major study by the World Bank shows that income grows more rapidly in countries open to international trade than in those more closed to trade.
    • Mercantilism, by Laura LaHaye
    • Protectionism by Jagdish Bhagwati

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