His Heart in the Right Place...

Wednesday, May 15, 2019

Does NOT Equal So Let's Follow Him Off the Cliff.

Stephen Moore, a former economic advisor to the Trump campaign, has come out with an editorial in which he claims to support free trade, but urges us to support Trump's "Trade War" with China:

Image by Eric Welch, via Unsplash, license.
Doctrinaire free traders should understand that this status quo is economically and politically untenable going forward. Trade can't be a one-way street, and something has to give here. That means immediate reforms in China's mercantilist economic behavior -- on tariffs, on other trade barriers, on theft of intellectual property and on cyber espionage against America. We aren't dealing with a friendly power here but with an increasingly hostile one that has become an existential threat. [bold added]
I'll skip whether doctrinaire is a deliberate smear or is psychological projection, and I'll get back to the bold momentarily. First, let me urge anyone who finds any of the above a convincing excuse to consider tariffs to head over to Cafe Hayek and read economist Donald Boudreaux's demolition of the whole idea that Moore understands free trade, let alone is a "free trader":
First, exporting, as such, no more enriches a country than does vandalism or arson. Exporting enriches a country only insofar as the people of that country receive imports in return for their exports. Unlike Mr. Moore, every true free trader understands that exports lead to growth only if and to the extent that exports bring in more imports.

Second, to the extent that China has grown economically as a result of its exports, it has promoted the economic growth of each of its trading partners. After all, China's increased exports means that citizens of other countries have access to a greater abundance of goods and services. No country can economically grow by exporting without thereby making economic growth easier for other countries. [bold added]
That said, I do not agree with the following formulation of Boudreaux's: "[E]very true free trader understands that trade is by nature a two-way street and, therefore, requires no government intervention to ensure that it is so." This is unclear, and risks appearing to be compatible with the idea that we don't need government at all. Unless a government protects individual rights, potential traders can be victimized by criminals or a government (his own included), rendering trade anywhere from less than free to nearly impossible.

It is only now that we can fully grasp the wrong-headedness of Moore's editorial, for the portion I highlighted describes issues our government should be trying to address: theft of intellectual property and espionage. We already have laws on the books regarding both: Trump should enforce them and, if need be, work to make them more effective.

Violating everyone's right to property in general, via a new tax, is no way to protect the rights of inventors and other intellectual property owners in particular, or to ensure national security.

-- CAV

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