Do Tariffs Prevent Unemployment?

That is all very well, you may say, but wouldn't a free trade policy lead to unemployment? Do Tariffs Prevent Unemployment? This argument is expressed in a number of ways. One is that the removal of a tariff, after an industry has become adjusted to it, will result in unemployment. An other. is that by means of tariffs we can put our people to work making the things we now import and thus create employment. Today, there is fear in some quar ters of a worldwide depression and unemployment. Some say: "We don't want such-and-such a country ex porting its unemployment to us." We have observed that if a tariff is removed, a pro tected industry may be forced out of business by foreign competition. If this happens, the workers in that industry will have to find employment elsewhere..In the embroid ery illustration, it is not denied that the existence of the tariff permits some workers to be employed in embroid ery manufacturing who would not otherwise be so em ployed. But what is often lost sight of is that many other job opportunities not now in existence would become available in this country if people could buy the imported embroidery and spend their tariff money as they please.

The money which the consumer formerly had to pay for tariffs could be spent to purchase new products or to 44 purchase more of existing products. This spending would automatically bring into existence new industries or in crease the number of jobs available in established in dustries. If the "disemployed" workers have mastered special skills, useful only in the discontinued industry, they may have to learn new ones. This argument, while often convincing, has been overstressed. Can you think of skills of this kind? It is true that the short-run adjustment may inconvenience those people who have to turn to new jobs. But everyone, including those same people, will benefit from the importation of a competing product at a lower price-.thus permitting concentration on the production of things for which our methods are better suited. The resulting unemployment should be only tempor ary and no more serious than the shift in employment going on constantly all over the country. The transfer of cotton miUs from New England to the South caused a similar type of temporary unemployment. The failure of any business requires similar adjustments. If no business in America had ever been allowed to fail-if the govern ment had always intervened-we would have had com plete government ownership and control many, many years ago.

Tariffs turn a country toward self-sufficiency. A farm family might erect such a high tariff wall around its farm that there could be no trade in goods and services with outsiders. Certainly, no one would be unemployed on that farm, but neither would there be the high level 45 of living the family now enjoys. If the tariff wall around the farm were removed, no one would necessarily be disemployed, and the farmer's household would enjoy a vastly higher level of living-and so would outsiders. Prolonged unemployment among people who are will ing and able to work is impossible in a thoroughly free market. The only reason for such a situation's existing as it did from 1930 to 1940 in this. country-is that la bor, through controls of one type or another, prices itself out of the market, or employers, for a variety of reasons, decide to close shop rather than to offer work at the re duced wage rates they may be able to afford.