For those interested in the negative consequences of protectionism in the agribusiness world, a recent op-ed in NY Times may pique your interest: My Forbidden Fruits.
See also: Etatism, Protectionism, and the Demand for Lebensraum
Source link: http://archive.mises.org/7882/penalized-for-producing/
Penalized for Producing
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These are the kind of articles people need to read about the local food movement. I think many people want to buy local because ‘buying local’ has been romanticized in many ways. Consequently, people begin to cry for protectionism, which always benefits a few at the expense of very many. People need to see that it is bad laws and of course intervention in the form of subsidies that distorts the market (which usually discriminate against the local food grower). Those who care about this issue need to refocus their critical eye from “Big Corporations” towards Big Government and the bad policies that affect the market.
Whether the local guy (organic or not) or the big, distant producer are “right” for a consumer–or many consumers–is a matter that should only be decided by the marketplace, where price is contrasted against the consumers’ lists of desirable characteristics.
Just as, in this case, Ag discriminates in favor of its subsidees (naturally!), there are reverse cases in which the locals (dairy farmers and cooperatives) discriminate (through minimum-price laws) against the large, distant, but comparatively advantaged farmers.
The complaining farmer is a victim, surely, as are the folks to whom his produce would be sold. But the farmer offering him the rental land is at least half a villain–participating in the subsidy and (almost assuredly) in the political process that surrounds it year after year. Such are “clients” of a welfare system as surely as are those on various forms of dole; the main difference is that the numbers are bigger.
“But between 1860 and 1914, Great Britain, which began the era with an economy twice the size of ours, ended it with an economy not half the size of ours. Britain worshipped at the altar of free trade, while America practiced protectionism from Lincoln to McKinley to Teddy Roosevelt to Taft. Tariffs averaged 40 percent and U.S. growth 4 percent a year for 50 years.
Bismarckian Germany did not exist in 1860. But by 1914, by imitating protectionist America, she had an economy larger than Great Britain’s. Were it not for protectionist America shipping free-trade Britain the necessities of national survival from 1914 to 1917, Britain would have lost the war to Germany, so great was her dependence on imports. A real-life “doomsday scenario,” thanks to a few dozen German U-boats.
Protectionism has been behind the rise of every great power in modern history: Great Britain under the Acts of Navigation up to 1850, the America of 1860 to 1914, Germany from 1870 to 1914, Japan from 1950 to 1990 and China, which has grown at 9 percent a year for a decade. As China demonstrates, it is a mistake to assume free trade, or even democracy, is indispensable to growth.
In the 1940s and 1950s, schoolchildren and college students were indoctrinated in such nonsense by FDR-worshipping teachers whose life’s vocation was to discredit the tariff hikes and tax cuts of Harding and Coolidge that led to the most spectacular growth in U.S. history – 7 percent a year in the Roaring Twenties. Under high-tariff Harding-Coolidge, the feds’ tax take shrank to 3 percent of GNP. ” -PB
… and so it went and so it goes.
Tariffs and protectionism build great nation states at the expense of the well being of the individuals. The reason that it worked to build the United States, Germany, Japan and Britain during the times cited is that the people were very supportive of imperialism.
The fact that they sacrificed their personal well-being for the good of the empire builders doesn’t negate the nature of the sacrifices and personal losses imposed upon themselves and other unwilling participants.
Great Britain got wealthy because of free-trade and liberal ideas, it ended it with protectionism, unions, and socialism.
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