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By Cafe Hayek (Reporter)
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Wall-y World

Tuesday, November 22, 2016 21:14
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(Don Boudreaux)


In my latest column in the Pittsburgh Tribune-Review I advise, unsolicited (of course), the president-elect not to build the walls that he and his fans wrongly believe will help to improve America.  A slice:

Sure, there are gains to the workers and firms protected by tariff walls from their fellow Americans’ ability to trade freely with foreigners. But these protected firms’ resulting higher outputs are produced with resources from elsewhere in the economy. Output and opportunity in other parts of the economy shrink. American firms diverted by tariff walls into producing, say, more steel, rejoice. But this rejoicing ignores the jobs that these tariff walls destroy elsewhere in America and the loss of output from other domestic industries.

It’s easy to rejoice when a wall, literal or figurative, enriches you. And it’s even easier when the destruction wrought elsewhere by that wall is invisible. When a tariff wall causes people in Louisiana and Oregon to pay higher prices for steel made in Pittsburgh, no one can know how they would otherwise have used the extra funds they now pay to Pennsylvania steel producers. But those funds must be diverted from somewhere.

Yet because those somewheres are many, no one domestic industry suffers any great loss from higher steel tariffs. The destruction wrought by tariff walls is dispersed and, hence, invisible. But the sum of the losses is greater than the gain to domestic steel producers.

Americans on the whole are made poorer.


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