The Defense of Free Trade

This is about as robust and comprehensive a defense of free trade as I have seen in quite some time, from one of my favorite economists, Russ Roberts. Here is a key excerpt that was quoted in the Wall Street Journal:

Suppose a scientist invents a pill that once you take it lets you live until 120 with no health issues whatsoever. Once you turn 120, you die a peaceful death on your birthday. Suppose the scientist, in a gesture of good will, charges $10 for the pill.

Should we let the scientist sell the pill? Is it good for the country? It’s good for almost everyone. But it’s going to be very hard on a very large group of people immediately:

Doctors. Nurses. Health Care administrators. People who build hospitals. People in medical school. People who teach in medical schools. People in health insurance companies. Pharmaceutical companies. Researchers. You get the idea. It’s millions of people. This is a very disruptive technology.

What’s going to happen to all those people?

Mass unemployment. All of the skills of all of those people are no longer valued. The past investments made in those skills are now wasted. Incomes of those workers will inevitably plummet overnight. . . .

Most people would argue that the millions of health care workers have no right to stop people from living until 120. And on the surface, that’s the whole story—long life and a very tough transition for millions of people from lives of financial well-being and deep satisfaction to a much bleaker future.

But that’s not the whole story. We’re missing a huge part of the story.

The other important part of the story is that everyone is suddenly a lot wealthier. All the money we once poured into health care will now be able to be spent on other things. What are those other things?

We can’t know. No one can. But a whole bunch of areas are going to expand and some of those are going to soak up the time, talents and energy of former doctors, health care administrators and so on. . . .

And young people who planned to go to medical school or become chemists in the pharmaceutical industry or nurses or data analysts in the insurance business will now turn elsewhere. What will they do instead? There is no way of knowing but they will try to find skills to invest in that lead to financially and psychologically rewarding lives. The dreams of those young people have been shattered. They will have to find something else to do. But their opportunities will now be much wider than just something other than health care. The areas outside of health care are now much wider because the increased wealth we all have can now go into new areas and opportunities.




“Slaughter & Rees Report: ‘Mr. President, You Are Mistaken, Sir'”

In a similar vein to my recent post on the Trump/Carrier “deal”, but with far more professional credibility from the authors – spanning the gamut of journalism, economics, private sector, and government experience, including one author’s (Matthew Slaughter) service on the Council of Economic Advisors for President George W. Bush and current service as the Dean of the Tuck School of Business at Dartmouth – this article, delivered as a letter to President-elect Trump, represents additional logic behind free trade. While my post largely focuses on the philosophy of individual freedom and dangers of government picking winners and losers, the Slaughter and Rees Report lines up several empirical reasons of why protectionism is actually economically harmful and counterproductive. It is worth the read.

Exhibit A: Industrial policy that protects the few at the expense of the many – Carrier keeps jobs in Indiana but on the backs of taxpayers and consumers

Image result for Carrier JObs

I just received an article from the Wall Street Journal that indicated that Carrier has agreed to keep roughly 1,000 jobs in a manufacturing plant rather than shift the employment to Mexico. Rather than celebrate this as a great example of private and public partnership and the deal-making style of Trump that successfully and benevolently puts Americans first, I am going to put a different, and perhaps unpopular, spin on this and call it what I believe it to truly be – arbitrary manipulation and industrial policy developed by government for the benefit of the few at the expense of the many.

Of course, the “saving” of 1,000 jobs is a positive thing on the surface, and it will no doubt lead to declarations of success and subsequently votes for the protectionist politicians who promoted it well into the future. Less visible will be the unintended consequences and foregone opportunities of non-government intervention. I will start with the obvious and work my way to the more philosophical, but just as important, reasons to decry, rather than to celebrate, such government interventions:

  • The 1,000 jobs were kept and promoted at a hefty price tag per worker. At a $7,000,000 tax incentive agreement, this works out to $7,000 per job “saved.” This means the rest of Indiana taxpayers are subsidizing this arbitrary policy. No doubt, you will find many lower-paid workers subsidizing their higher-paid brethren. I am sure the Indiana taxpayer could think of a million different things they could do with that $7,000 to help their own careers and families. This is the unintended consequences that are diffused and don’t get highlighted in the media that happens with industrial policy. This is also what happens when rent-seeking corporations get the ear of government officials who control too many of the levers of economic policy. They get to decide how to use our tax dollars and declare it a successful investment with little accountability or visibility to what ends those dollars could have gone to had they left them in our pockets.
  • The inability to shift labor to take advantage of wage rate/productivity imbalances leaves costs higher for American consumers in the long-run. Once again, this is government meddling in support of one small class of citizens at the expense of the many.
  • Preventing Mexico from taking advantage of their comparative advantages in their specific mixture of labor force participation, wages, and productivity will continue to put pressure on their citizens but not allowing them to grow economically, which further puts pressure on its citizens to immigrate. Being able to take advantage of cross-border trade is mutually beneficial and is not the zero-sum game that protectionists such as Trump believe it to be. The great irony is that plugging one “problem” of imbalanced trade only exacerbates another one of immigration- or at least in the sense that self-described American Economic Nationalists believe trade and immigration to be problems.
  • Sustaining or creating new abusive and arbitrary government power to take tax dollars from citizens in support of the few establishes/continues a dangerous precedence. What well-connected company or connected political body will take their turn next in using their connections to politicians to extract resources from the rest of us under the auspices of “America first?” Do we really trust the government to pick and choose these winners wisely and with all of our freedom, liberty, and economic interests in mind? I hope to someday make this a rhetorical question.
  • I keep coming back to this point from previous posts – but what right does the government have to tell me as a consumer where I can and can’t buy goods? By implication – browbeating, cajoling, and incenting them to stay (using my money) in America through taxpayer funds is ultimately an act to usurp my rights to buy goods from the provider who can make the highest quality good at the lowest cost and in the end is little more than theft of my resources to support their own arbitrary decisions.

Finally, freedom and liberty requires a tradeoff of uncertainty in outcomes that don’t always redound to every individual, but is the only way with which we can grow economically (and in turn emotionally and spiritually) in the long run. The fundamental question then becomes do we want to bequeath to our future generations and children an open and dynamic society where people are free to create the exciting and enriching occupations of the future, or do we want to confine them to the known quantities of the past and present?  We shouldn’t demand equality in outcomes, but rather demand the equality of opportunity combined with blind justice – good arbitration when conflicts arise over contracts between free people. Otherwise, we should keep government at a safe arm’s length that is akin to a good and impartial referee who knows a foul when it sees it and has a consistent redress for those fouls irrespective of the player that committed them. Instead, what we have these days is a referee who changes the rules in the middle of a game to the advantage of his favorite and most well-connected players. On this note of equality of opportunity and why it is extremely important, I land with a powerful excerpt from Deirdre McCloskey’s remarkable book, Bourgeois Equality, of which I have written more at length about in a separate post, but for today’s topic pull out this specific section:

The ideas of equality [in the English and Scottish Enlightenment period] led to other social and political movements not uniformly adorable. Hannah Arendt remarked in 1951 that ‘equality of condition…is among the greatest and most uncertain ventures of modern mankind.’ Alexis de Tocqueville had said much the same a century earlier. And Scottish equality has a harsh, even tragic side. It entails equal reward for equal merit in a marketplace in which others, by freedom of contract, can also compete. As John Stuart Mill put it in On Liberty, ‘Society admits no right, either legal or moral, in the disappointed competitors to immunity from this kind of suffering; and feels called on to interfere only when means of success have been employed which it is contrary to the general interest to permit – namely, fraud or treachery, or force.’ Yet in the real world, unhappily, if the poor are to be raised up, there is no magic alternative to such competition. An ill-advised and undercapitalized pet store, into which the owner pours his soul, goes under. In the same neighborhood a little independent office for immediate health care opens half a block from a branch of the largest hospital chain in Chicago, and seems doomed to fail the test of voluntary trade. Although the testing of business ideas in voluntary trade is obviously necessary for betterment of the economy (as it is too by non-monetary tests for betterment in art and sport and science and scholarship), such failures are deeply sad if you have the slightest sympathy for human projects, or for humans. But at least the pet store, the clinic, the Edsel, Woolworth’s, Polaroid, and Pan American Airlines face the same democratic test by trade: Do customers keep coming forward voluntarily? Does real income rise?

We could all by state compulsion backed by the monopoly of violence remain in the same jobs as our ancestors, perpetually “protected,” though at $3 a day. Or, with taxes taken by additional state compulsion, we could subsidize new activities without regard to a test by voluntary trade, “creating jobs” as the anti-economic rhetoric has it. Aside even from their immediate effect of making national income lower than it could have been, perpetually, such ever-popular plans – never mind the objectionable character of the violent compulsion they require – seldom work in the long run for the welfare of the poor, or the rest of us. In view of the way a government of imperfect people actually behaves in practice, job “protection” and job “creation” often fail to achieve their gentle, generous purposes. The protections and the creations get diverted to favorites. Laws requiring minority or female businesses to be hired, for example, tend to yield phony businesses run in fact by male whites. In a society run by male whites or inherited lords or clan members or Communist Party officials, or even by voters not restricted by inconvenient voting times and picture IDs, the unequal and involuntary rewards generated by sidestepping the test of trade are seized by the privileged. The privileged are good at that.



Trump’s first 100 Days

I could write my own treatise on Trump’s first 100 days, or I could just link to one that already says exactly what I think written by an eminent University of Chicago trained economist and Hoover Institute fellow named  John Cochrane instead.

For today, I choose the latter option. The only addition I would make is that he should look no further than Cochrane when appointing a Chair of the Council of Economic Advisors.

“Protectionism Is a Means of Stealing That Which Suppliers Are Unwilling to Purchase”

As ever, the Cafe Hayek blog does an admirable job of using analogies that make no economic or ethical sense and apply them to ways in which we pursue ill conceived economic policies.

The following is what I deem to be the most important point of the post:

Yet too often when buyers shift some of their patronage from domestic producers to foreign producers, domestic producers – both firm owners and workers – insist that the state is morally obliged to force buyers to continue to purchase their products and their labor without any reduction in the prices and wages charged by sellers.  These producers greedily and falsely insist that it’s bad policy for the state to allow buyers to shift their patronage to other sellers.  Because those other sellers happen to be located abroad – or in the case of immigrants happen not to have passports issued by the domestic sovereign – such greedy and false insistence by domestic producers and workers is remarkably seen as legitimate, despite the fact that there’s nothing remotely legitimate about such insistence.

Tariffs and other forms of ‘protectionism’ are means of forcing buyers to act and to pay as if they agreed to terms of contracts with sellers that these buyers never agreed to and that the sellers who benefit from the protectionism were unwilling to pay for in their contractual dealings with their customers.

Protectionism is akin to changing the rules of a game in the middle of a game.  It’s unfair.  It’s unproductive.  It’s theft wrapped in flags, and too-often faux-sanctified by specious theorizing.

How I would vote on the Brexit referendum

Vote Counter: 'Okay,DONE! It's settled! The NEIGHS have it!'

I must confess to some amount of ambivalence overall on the Brexit topic over the last few months. When it comes to the UK, I tend to pay more attention to the latest production coming out of the BBC Masterpiece Mysteries than I do their raucous politics. I can say that I can certainly identify with elements of the Leave camp.  I am highly suspicious of large supranational bodies such as the EU and it certainly has its downsides and serious flaws in centralization of unaccountable bureaucracies and loss of direct democracy at the local level. The EU could have a far more effective and durable institution if it focused less on political and regulatory union fronted by unaccountable bureaucrats and more on the common market and defense aspects of the treaty. This orientation seems to fail on the basis that there are not common taxing and banking decisions and regulations, resulting in the political strife that tends to become inevitable when largely successful and thrifty economies such as Germany and the Nordics have to incessantly bail out profligate economies such as Greece. On top of all of this, the moralizing hectoring and scorn heaped upon the leave camp has the emotional effect on the cynic in me of wanting to cock a snook at the seething elitism and fear mongering that undergirds much of what is coming from the Remain camp. Matt Ridley makes a compelling and succinct case in an op-ed for the Leave camp.

All that being said, a recent Wall Street Journal podcast on the issue forced me to seriously think through how I would vote if I happened to be British, and I have come down on the side of tilting towards the Remain camp. The challenge seems to be that most of the Leave side of the aisle seem less worried about abstract political theories of national rights of self-determination as it relates to the rule of law and much more concerned with populist beliefs and a desire to more directly impact immigration, usage by immigrants of public services such as the NHS, skyrocketing rents and home prices, and to limit free trade. The challenges of usage of expense related to public services and high housing prices due to immigration are a result of failed statist policies and restrictive housing regulations that are Britain’s fault alone and for which leaving the EU will do nothing to solve and one could argue (as the hosts of the podcast, Bret Stephens and Mary Kissel do) is purely a political distraction from the challenges that they should be solving. An insular Britain, while it may rid itself of the supranational and undemocratic elements of the EU, will not be charting a course to some economic laissez-faire dreamland. It would seem that if the leaves have it, then it would be hard to ignore the concomitant electoral mandate to promote economically harmful protectionist policies and to shut the doors to economically beneficial immigration. Protective nationalism would be the result.

As a Bret Stephens WSJ op-ed indicates, the ideal scenario and supranational construct would be one built upon foundations of common markets, contributions to defense, and promotion of free trade spread out across countries that have common views of free-market principles and the rule of  law. Given that this is not on offer and we don’t collectively have the political leadership to bring it about while Britons are staring at the immediate prospect of a smaller and less globally engaged and protectionist England (Scotland would surely finally carve off of the UK and join the EU on their own), I hope for a remain vote. At least for now.

“Protectionism is Economic Terrorism”

While the analogy may seem a bit sensational, I urge the reader to hear Don Boudreaux from Cafe Hayek out on this thought.

The fundamental concept is confusing wealth and scarcity of select groups (i.e. steelworkers) with wealth at large for society. The same economic fallacy would be similar to assuming that if terrorists struck our water supply, thereby making sellers of bottled water and water engineers that can figure out how to overcome the problem better off and more wealthy, that would somehow make society at large better off. The logic easily fails in both scenarios, it is just more obvious and mentally repugnant in the second scenario.

“The GOP’s Mexico Derangement”


Bret Stephens has a biting critique of the GOP in his recent Wall Street Journal op-ed. Stephens, as ever, is able to criticize the party that he aligns with most often with eloquence and forcefulness that I admire. The GOP’s myopia and fixation, to say nothing of the lack of economic soundness and adherence to liberty, small government, and plain moral decency – was a primary source of frustration of mine with the party long before the rise of Trump. The combination of stances on immigration, free trade, and Trump are the main reasons I will be casting a Presidential Libertarian ballot this election season.

Some of the piquant highlights of the article, in which Stephens addresses common canards leveled against Mexico and Mexican immigration are as follows:

Mexico is a failed state. Mexico’s struggles with drug cartels—whose existence is almost entirely a function of America’s appetite for dope—are serious and well known. So are its deep-seated institutional weaknesses, especially the police forces that collude with the cartels and terrorize rural areas.

Then again, Mexico’s 2014 homicide rate of about 16 murders per 100,000 means that it is about as dangerous as Philadelphia (15.9) and considerably safer than Miami (19.2) or Atlanta (20.5). Are these “failed cities” that you don’t dare visit and that should be walled off from the rest of America?

Mexico steals U.S. jobs. Donald Trump recently resurrected this chestnut by inveighing against Nabisco and Ford for shifting production to Mexico from high-cost Illinois and Michigan. Never mind that one reason Ford made the move was to take advantage of Mexico’s free-trade agreements with the European Union and other countries, meaning that opposition to free trade is the very thing that drives business abroad. Then again, Mexico is the second-largest purchaser of U.S. products; the Wilson Center’s Christopher Wilson has estimated that “six million U.S. jobs depend on trade with Mexico.” That is especially true for border states. ‘Mexico is the top export destination for five states: California, Arizona, New Mexico, Texas and New Hampshire, and is the second most important market for another 17 states across the country.’

Illegal immigrants are a drain on the system. This whopper should be sold at Burger King, since illegal immigrants pay billions in state and local taxes, along with about $15 billion a year to Social Security—the benefits of which they are unlikely ever to get back. Entire U.S. industries, agriculture above all, depend on illegal migrants, without whom fruits and vegetables would simply rot in the field.

If there is a drain, it’s Mexicans going home—roughly one million returnees between 2009 and 2014, according to the Pew Research Center, outpacing the number of Mexicans moving north by about 140,000. That owes something to growth and stability in the Mexican economy, which is largely a function of the North American Free Trade Agreement.

This makes Mr. Trump’s opposition to Nafta all the more misjudged. Without it, Mexico could easily have become Venezuela, run by an Hugo Chávez-like strongman, that would have posed a real threat to U.S. security, as opposed to the one in Mr. Trump’s imagination.


Free Trade Lessons for the Economically Challenged

Yes, the would be trade war General Donald Trump is included in those that need these lessons. Whether he actually believes his own tirades against Mexico and China or whether he finds them politically astute given his blue collar base is beside the point, the lesson on the virtues of free trade are in constant need of defending – like a garden that is surrounded by malevolent spreading weeds that are aggressive but thoughtless.

This Neighborhood Tale from Cafe Hayek is one Orwellian dystopian view of the topic that asks the obvious question – why should government backed by freedom-hating voters decide what I get to consume and where I get my products from? Drawing the arbitrary consumption boundary to the United States is really no different philosophically and morally than drawing a consumption boundary around my neighborhood. When one paints it in this light, then the restrictions on individual liberty and punitive tariffs becomes quite the sophistry.

Another highly insightful and thought provoking entry on the topic comes from the American Enterprise Institute constructed video debate between Trump and Milton Friedman on the topic. Of course, Friedman having passed away some years ago we don’t get the pleasure of Friedman actually destroying Trump’s immature trade arguments in real time, but the artful creation of AEI does the job well enough.

A key phrase from Friedman in the video montage that I particularly enjoy (at the 2:00 minute mark) summarizes the topic of free trade quite well, “When I look at the legislation it always seems to me that the legislation is enacted to benefit a small group at the expense of the large group. Free trade is a way of benefiting a large group at the expense of the small group. But, politically, a small group always speaks with a bigger voice.”

Another common bogeyman of the protectionist is the trade deficit. To the protectionist, this is a pernicious sign of unfair trade practices. The problem with this simplistic view is an assumption that those dollars will exist in a permanent vacuum of no escape. Eventually, those dollars will have to be spent on something, which is most often re-invested back into the United States. Friedman also observes that trade surplus countries are often driven by the lack of savings opportunities in their own countries, driving them to invest in countries such as America where investment opportunities are better.

“When I look at the legislation it always seems to me that the legislation is enacted to benefit a small group at the expense of the large group. Free trade is a way of benefiting a large group at the expense of the small group. But, politically, a small group always speaks with a bigger voice.” – Milton Friedman

Another brilliant quote that I want to call out is when Friedman uses a quote (7:35 minute mark) from the classical American economist Henry George (circa 1890) that, “It’s a very interesting thing that in times of war, we blockade our enemies in order to prevent them from getting goods from us. In time of peace we do to ourselves by tariffs what we do to our enemy in time of war.”

AEI provides a fuller version of Henry George’s arguments on the inanity of protectionist policies in their text, which I have copied below. I find the similarities between Trump’s proposed 45% tariff and the 47% tariff of George’s day that President Grover Cleveland was attempting to lower an amazing coincidence.

Trade is not invasion. It does not involve aggression on one side and resistance on the other, but mutual consent and gratification. There cannot be a trade unless the parties to it agree, any more than there can be a quarrel unless the parties to it differ. England, we say, forced trade with the outside world upon China, and the United States upon Japan. But, in both cases, what was done was not to force the people to trade, but to force their governments to let them. If the people had not wanted to trade, the opening of the ports would have been useless.

Civilized nations, however, do not use their armies and fleets to open one another’s ports to trade. What they use their armies and fleets for, is, when they quarrel, to close one another’s ports. And their effort then is to prevent the carrying in of things even more than the bringing out of things—importing rather than exporting. For a people can be more quickly injured by preventing them from getting things than by preventing them from sending things away. Trade does not require force. Free trade consists simply in letting people buy and sell as they want to buy and sell. It is protection that requires force, for it consists in preventing people from doing what they want to do. Protective tariffs are as much applications of force as are blockading squadrons, and their object is the same—to prevent trade.The difference between the two is that blockading squadrons are a means whereby nations seek to prevent their enemies from trading; protective tariffs are a means whereby nations attempt to prevent their own people from trading. What protection teaches us, is to do to ourselves in time of peace what enemies seek to do to us in time of war.

Can there be any greater misuse of language than to apply to commerce terms suggesting strife, and to talk of one nation invading, deluging, overwhelming or inundating another with goods? Goods! what are they but good things—things we are all glad to get? Is it not preposterous to talk of one nation forcing its good things upon another nation? Who individually would wish to be preserved from such invasion? Who would object to being inundated with all the dress goods his wife and daughters could want; deluged with a horse and buggy; overwhelmed with clothing, with groceries, with good cigars, fine pictures, or anything else that has value? And who would take it kindly if any one should assume to protect him by driving off those who wanted to bring him such things?



Do the Chinese have an unfair advantage?

According to Donald Trump, the United States loses to China, Mexico, Japan, and just about everyone else in the world. The redress he proposes is a 45% tariff on Chinese goods that he would likely expand to others he lumps in as having unfair advantages over us and a border wall. Has any nation ever made itself great (or great again) through isolation from immigrants and trade wars? Before we jump off into the chasm of a 45% tariff on the Chinese (and others) perhaps we should think about the actual impact of an increase on our goods, particularly the low-cost goods that benefit the poor. As Daniel Henninger lays out in a recent Wall Street Journal Editorial, the tariff is one of Trump’s few actual policy proposals. Henninger elaborates powerfully on the perils of Trump’s proposal in what I have copied below:

At the core of the Trump campaign is one policy idea: imposing a 45% tariff on goods imported from China. In his shouted, red-faced victory speech Tuesday, he extended the trade offensive to Japan and Mexico.

Some detail: Combining the value of goods we sell to them and they to us, China, Mexico and Japan are the U.S’s Nos. 1, 3 and 4 trading partners (Canada is No. 2). They are 35% of the U.S.’s trade activity with the world. The total annual value of what U.S. producers—and of course the workers they employ—sell to those three countries is $415 billion.

Wal-Mart has 1.4 million U.S. employees in stores filled with foreign-made consumer goods. With a 45% price increase, many won’t be working for long.

Mr. Trump says the threat alone of a tariff will cause China to cave. Someone should ask: What happens if they don’t cave? Incidentally, unlike Mexico, China has between 200 and 300 nuclear warheads and 2.4 million active-duty forces. Irrelevant?

As with anything Trump does, the tariff proposal is a naked calculation to rile up the easy to excite masses that are befuddled by economics. His supporters may not recognize this, but all of this is really in the same vein of support as those that support Sanders.  People with pitchforks want to believe that all of their wage stagnation must be the result of some faceless enemy in a foreign land or a Mister Burns character at J.P. Morgan. They will inevitably fall into the trap of rallying behind either Sander’s envy and class warfare or Trump’s foreigner warfare. On the latter, these same individuals will grab their pitchforks once again and demand price controls once their prices down at Wal-Mart also increase 45%. They will fail to see the increase as the predictable result of their own actions. It is a vicious cycle to find succor and assistance from government men with no scruples and who possess the knowledge that true arbitrary power is created on the backs of those ignorant souls willing to make deals with dark power for fleeting and ephemeral gains. This information and knowledge asymmetry is how individual liberties are willingly ceded by voters to those who make pandering promises who know what power they can gain.

I want to turn to the canard that the Chinese have an unfair advantage in trade with Americans. I have always been puzzled by a complaint that if the Chinese manipulate their currency to an unnatural low point that we should in turn punish them. If the Chinese do manipulate their currency (and it is highly debatable whether they do), then the logical conclusion is that in doing so what the Chinese government is actually doing is using Chinese taxpayers to subsidize American consumption. In other words, currency manipulation would necessarily mean Chinese citizen oppression by the Chinese government to support our low prices and consumption habits here. One might disdain this from a sense of humanitarianism and fellow feeling for the Chinese, but what it shouldn’t be is a cry of unfair advantage for the Chinese. We should be thankful for the good fortune that Chinese government ineptitude provides us with cheaper goods! Cafe Hayek states this much more effectively than I just did, so I copy the comments from a recent blog post in the form of a letter to a former student:

Dear Mr. Hester:

Thanks for your reply.

You say that I am “naïve to forget about” the “unfairly low prices which the Chinese ruling elite impose on us.”

Please.  Low prices in America – especially if they are made artificially low at the expense of non-Americans – are no imposition on Americans; they are a blessing to Americans.  (Do you think that we earthlings would be made richer if our rulers adopt policies that require us to start paying more for the light and heat that we have until now imported from the sun at the low price of $0?  If not, why do you think that we Americans would be made richer if our rulers adopt policies that require us to start paying more for the goods that we have until now imported from China at low prices?)

Also, Chinese low wages are largely the consequence of the Chinese people being enslaved, tyrannized, and impoverished for decades by an unspeakably cruel Maoist regime.  Do you honestly believe that this terrible history gives the Chinese people today an unfair economic advantage over Americans?  If so, you must regret that we Americans were denied the advantage-rich experience of being forced to live in a collectivized, starvation-ridden society ruled by murderous despots.  My gosh!  If we, too, could today boast the horrifying recent history of China, then we, too, might be as poor as the Chinese and, hence, we, too, would enjoy – as do today’s Chinese – all the splendid “advantages” bestowed by such an impoverishing history!

Donald J. Boudreaux
Professor of Economics
Martha and Nelson Getchell Chair for the Study of Free Market Capitalism at the Mercatus Center
George Mason University
Fairfax, VA 22030