protectionism

The Prime Minister, Shri Narendra Modi delivering his keynote speech, at the plenary session of the World Economic Forum, in Davos on January 23, 2018 [PMO, India]
Irony was a guest at the 48th World Economic Forum on Monday when Indian Prime Minister Narendra Modi took to the stage to deliver a blistering defense of free trade just as the US announced additional tariffs on Chinese solar panels, washing machines, and aluminum and steel exports.
But Modi deftly navigated the increasing protectionist measures taken by the US since US President Donald Trump won the elections.

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It is true that Macron claims that he wants to preserve globalization. He even declared that “protectionism is war, it’s a lie.” But he never challenged any specific protectionist policies such as the Common Agricultural Policy. He also argued that “we do not have to be a completely open continent: protectionism should not be confused with a necessary protection.” In the same way that under democracy “war becomes simply a device to end war” as Henry Louis Mencken would have said, protectionism has become for Macron a device to end trade barriers.

Competition in the solar industry has led to an intense price war between firms. As the situation stands, US solar panel manufacturers have been unable to keep up with their Chinese competitors, leading to multiple high-profile bankruptcies. While price wars are unpleasant for companies, they are a great thing for consumers.

Over time, the stagnation caused by tariffs accumulate. By the time your children are in their prime working years, their available opportunities will be much fewer had tariffs not been put in place to protect the jobs and industries of the past. The tariffs that are in place today will ensure that, tomorrow, your children are working in the past.

Adam Smith's argument in favor of free trade and against protectionism is just as relevant and persuasive today as it was in 1776. Domestic producers and manufacturers are always better organized than the consumers, and they foster political support for protectionist trade policies that are in direct opposition to the interests and welfare of the great body of the people.

Telemedicine is making health care much less burdensome for patients. When it comes to eye health, new phone apps are making it possible to avoid the doctor's office for simple things like prescription refills. This is a revolutionary new technology, or it will be if protectionist policies don't get in the way.

Even though there are plenty of reasons to be happy about the defeat of Marine Le Pen in the French presidential election, the new president Emmanuel Macron, with his stance on the EU and his questionable positions on economic interventionism, likewise deserves some pro-liberty opposition.

I was in Vancouver barely a week after President Trump’s imposition of 20% tariffs on logs imported from Canada. It was also just days before elections that would determine which party controlled the British Columbia Legislature and, thereby, who would serve as the province’s next Premier.
The timing was superb for enjoying the sites of Vancouver but not so good for Trump’s tariffs. Incumbent Premier Christy Clark suggested retaliation in the form of restrictions or an outright ban on thermal coal from the U.S.

“Protectionism” – with the sweet sound of the verb “to protect” – is far too kind and inaccurate a word for a policy that attacks consumers for the benefit of domestic producers. It should really be called “scarcityism,” which better exposes the true nature of government-erected obstacles to people’s access to goods and services.