The Ugliness of the Great Protectionist State
Economists sometimes say something banal that doesn’t seem to require much economic education or business experience but only a bit of reflection about individual incentives. Let me do it.
What will happen if foreign companies or foreign plants of American companies cannot sell their goods in America without being constantly hit by whimsical American tariffs and threats thereof, up one month, down the next month, and up again? They will move their production facilities to America? But then, they will also know that they risk being hit with American tariffs on their inputs. And they know that foreign states will often retaliate. Moreover, in these circumstances, the legendary American market will have become much less attractive since most people will be poorer, except for government cronies.
The best idea for entrepreneurs may be to stay put or to move to a country still open to trade—or, ideally, to a country unilaterally open to trade if such countries exist.
A silver lining would be that Americans and other people similarly victimized in their own countries (“taken advantage of” by their own governments) would stop blindly trusting the state and discover or rediscover the classical liberal and libertarian project of strictly limiting the power and scope of their own leviathan.
Alas, it could also go the other way: the mob could clamor for a new, more powerful strongman to fix the wall, make the trains run on time, and get it done. In fact, and taking into account the different forms that authority and Leviathan have taken, it has been that way in most of the world during most of the history of mankind.
There is certainly something worse than everyone in the world wishing to come to one’s country: it is that nobody wants to.
A mercantilist state, by the ChatGPT-4o with the new image generator
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