Tariffs Kills Jobs
Dr. Russell is Professor of Economics at
Rep. Noah M. Mason of
Mason claims that most congressmen are now opposed to our 27-year-old policy of lowering tariffs for nations that lower them for us, and that this increasing opposition could easily result in the defeat of the act when it comes up for renewal next June.
It so happens that Representative Mason has always been one of my favorite congressmen. My only real disagreement with his voting record is on the issue of tariffs. In defense of his campaign for higher tariffs, he generally advances the familiar arguments of protecting American jobs and industries against "cheap foreign labor."
He is correct in his observation that if it were not for government protection against foreign competition, many persons in the
He dramatizes the jobs and industries that are threatened by the $16 billion worth of yearly imports into the
Actually, tariffs never protect jobs for the nation as a whole. But tariffs do always increase prices for consumers throughout the country. Today, you and I are paying higher prices for clothing and watches (and many other items) because the American manufacturers of those products are protected by tariffs. I am just as opposed to protection and subsidies for industry as I am opposed to protection and subsidies for farmers, unions, and professional men. I cannot logically and morally be for one and against the other.
For Example
Perhaps our protectionists could understand this issue better if they would consider the economic effects in
We do not have, for example, an automobile industry in our state. The reason is simple—we can buy cars cheaper from
With that amount of government protection (really a concealed subsidy), capital would flow from our machine tool industry into our new automobile industry that could then offer the owners of the capital a higher return on their money. That development would immediately increase costs (and prices) for machine tools because those companies, in turn, would then have to pay a higher price to hold and attract the needed capital. And for a while at least, the machine tool companies would also have to pay higher prices for labor because the new automobile industry would bid especially high for the services of those skilled mechanics.
Thus, even if
After that arrangement had continued for 10 years or so, it would be almost impossible to stop it; the protectionist politicians would quickly and correctly point out that all the jobs in our high cost Illinois automobile industry would be wiped out overnight if we removed their protection from competition and permitted those "cheap cars from Detroit" to be sold in our local markets.
The Economic Facts About Competition and Trade
That is always the final result of government protection and subsidies and interference with the free market economy. The absence of tariffs among our 50 states explains better than anything else why our level of living is so high. It is due almost entirely to competition, natural specialization, survival of the most efficient managers and companies, and the free movement of labor and capital from one industry and one section of the nation to any other industry and section.
Those economic facts about competition and trade also explain why the nations of
For both economic and political reasons, the
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Unsound
Where does anyone get the idea that he is entitled to the production of someone else? Under what moral or economic conception can one base a claim upon his neighbors? Inducements of something for nothing encouraged by politicians to get votes and voted for by those not economically or morally informed can only turn into a morally defective procedure which is economically unsound and which will lead to financial chaos.
Ralph E. Lyne,










