What To Do About Tariffs

What to Do about Tariffs The author has neither the desire nor the ability to present here a detailed blueprint for the elimination of trade restrictions in this country or throughout the world. He is convinced that once there is a will to remove these restrictions, there will somehow be away. The will to remove restrictions on trade can come about only through understanding-through the realiza tion that restrictions do not yield the benefits claimed for them. Worse than that, they are harmful-. harmful economically and harmful to the cause of peace, friend ship, and good will, at home and abroad. On the surface, tariff protection seems to offer bene fits to the owners and workers of a protected industry. When a tariff is first applied, the producers of the par70 ticular product affected have a price advantage which should be reflected in higher profits. But tariffs do not prohibit domestic competition within an industry. The higher profits attract newcomers to the field, and com petition tends to erase the gains from the special priv ilege. After this happens, the producers are back in their former competitive position. In order to maintain any benefit, they will have to continue to ask for new privileges as the old ones lose their power-much as a drug addict must use more and more of the drug to avoid the suffering it is supposed to relieve.

Thus, the so-called "benefits" of tariff protection are illusory-the only consequence of the tariff being that the domestic owners and workers are competing with one another in an industry erected on a false base. The base is false and weak because it is supported by the threat of force-force which directs individual spending -instead of by voluntary choice. The force is directed against consumers, the friends and neighbors of those who seek special privileges for themselves. But consum ers do not respond kindly to force or threats of force. They have only so much buying power, and they cannot be forced to buy more of everything. Nor will they buy a commodity as freely as before if its price is forced up ward by a "protective" tariff. 'Thus, tariffs se.rve merely to put the whole economy on an artificial foundation instead of on a sound business foundation. No one really gains-and nearly everyone loses-by this arrange ment. It stifles progress.

Adjustments such as those which would be required 71 by the removal of tariffs are taking place constantly in a free economy. When the automobile made its appear ance, the operators of livery stables and the manufac turers of buggies were inconvenienced. They had to turn to something else. But they soon found themselves benefiting in two ways: First, as consumers, they bene fited generally from the automobile; and second, the new job opportunities within the new and expanding auto mobile ~ndustry were more attractive than their old jobs in a dying industry. Thus, the removal of trade restric tions would not be as painful as it may at first appear even to those who think they benefit from them. An Invalid Argument To argue that tariffs cannot be removed when an in dustry or a nation has becolne adjusted to operating under trade restrictions is no different in principle than to argue against all technological change and advance.