Thursday, 13 February 2020

"You show me a tariff, and I’ll show you a domestic company that lobbied for it." #QotD

"Free trade is naturally what exists when government refrains from bestowing special privileges on domestic producers. A government no more 'imposes' free trade on its citizens by refraining from taxing and subsidising their commerce with foreigners than it imposes freedom of movement on its citizens by refraining from shackling them with leg irons...
    "You show me a tariff, and I’ll show you a domestic company that lobbied for it."

        ~ Don Boudreaux, from his post 'Free Trade Straw Men'

1 comment:

  1. My first job in the public service was in the Department of Industries and Commerce in the Exemptions Section. This was a section in the Industries Division that was charged with the then government policy of replacing import licensing with a system of tariffs. Having just obtained my MCom in economics I gave a little presentation to the (mostly NCE qualified) other members of the section with Marshallian curves and the like to show how a tariff could be set to have the same effect but mainly to show how severe some of the licencing restrictions actually were. My boss got instructions from higher up that we would have none of this academic nonsense influencing our decisions. But it was an interesting place. The people there believed it was their job to protect New Zealand industries. And they knew best. Fortunately for New Zealand they didn't set the tariffs so high as to replicate the old licencing restrictions and once the change had been made it was easy for the tariffs to be wound back. That's not to say there wasn't lobbying going on-there was - lots of it. But the public servants at that time were there too.


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