Protectionism is economic suicide
Acton Institute Powerblog

Protectionism is economic suicide

The most charitable assumption you can make about people who support tariffs and other forms of protectionism is that they are economically illiterate. But if they are able to demonstrate they understand the economics of protectionism and still support such policies, then we are justified in assuming they don’t care about harming their neighbor.

This binary choice may sound overly simplistic—after all, aren’t most policy issues complex?—but it really is that clear-cut. As Mark J. Perry explains,

It’s a scientifically and mathematically provable fact that all tariffs, at any time and in any country, will harm economic growth, eliminate net jobs, destroy prosperity, and lower the standard of living of the protectionist country because tariffs are guaranteed by the ironclad laws of economics to generate costs to consumers that outweigh the benefits to producers, i.e. tariffs will always impose deadweight losses on the protectionist country . . . That is, the reality that tariffs always inflict great economic damage and leave society worse off is not a debatable outcome, rather it’s a provable fact, like the law of gravity.

Why then if protectionism is as Perry says, actually a job-destroying, prosperity-destroying form of economic suicide and an economic death wish” do so many American support such policies? Perry offers 25 reasons, my favorite ten of which are:

1. The false belief that trade is a zero-sum game (win-lose), when in fact it’s win-win.
2. The costs of protectionism to consumers are mostly hidden.
3. The benefits of protectionism to producers are easily identifiable and visible.
14. The pathological, but false obsession that exports are good.
15. The pathological, but false obsession that imports are bad.
18. Many Americans think that exporting US products is patriotic.
19. Many Americans think that importing foreign products is unpatriotic.
20. The false belief that trade deficits are a sign of economic weakness.
23. The general lack of economic literacy among the general public.
24. The general lack of economic literacy among politicians, or their intentional disregard for the economics of protectionism in favor of enacting public policies that help them get re-elected.

All of Perry’s reasons are important, but I think we could transform our economy—and significantly increase human flourishing in America—if we could just eliminate #1, #19, #23, and #24. Read the rest of Perry’s reasons here.

Joe Carter

Joe Carter is a Senior Editor at the Acton Institute. Joe also serves as an editor at the The Gospel Coalition, a communications specialist for the Ethics and Religious Liberty Commission of the Southern Baptist Convention, and as an adjunct professor of journalism at Patrick Henry College. He is the editor of the NIV Lifehacks Bible and co-author of How to Argue like Jesus: Learning Persuasion from History's Greatest Communicator (Crossway).