Protectionism to Poverty, Remember Smoot-Hawley?

By: Taggart Bennett

Narrated by: Virtual Voice

Length: 43 mins

Publisher's summary

Protectionism and tariffs are things that nightmares are made for the destitute pleb masses. This is true if you are living in a mixed economy under a government claiming to be capitalistic, socialistic, communistic, all three, or some blend thereof. There's a slight difference, however, as in theory in both socialism and communism the tax revenue pulled via tariffs would go back to the people in the form of reimbursement that can be seen in a nation's social welfare programs like education, healthcare, housing, etc... The truth, however, is usually much different on the ground, and the reality is that, regardless of what system you are living under, you pay the taxes when you purchase products, not the importer or exporter, but the customer. Duties result in less economic activity in countries, and citizens of countries with heavy taxation on imports and exports have poorer people with less purchasing power. Tariffs on China are the only thing that is agreed upon by the two major political parties in the US, the Democrats and Republicans, and nearly all nations that are part of the European Union. Unfortunately, this is a mistake and makes both regions poorer, and it results in greater economic hardship in the Americas and in Europe. We need free trade, and despite China taxing all imports and exports at 100%, the free market wins every time as the flaws with entitlements are always exposed, which has precedence in nearly every country that has tried socialism and communism throughout history. Flat taxes on imports across the board or on specific countries results in retaliation tariffs, and citizens in the US know how the Smoot-Hawley Tariff Act of 1930 ended, i.e., we had the Great Depression and WWII. No thanks. People around the world, including people in China, don't need a bunch of bureaucrats making laws that only benefit big government to intercede in the natural forces of the free market; governments have a horrible track record with getting taxation correct, and it generally leads to the masses being impoverished and pitted against each other in unnecessary wars. Adam Smith's invisible hand is not only free, meaning it doesn't cost anything, but will always correct the errors in the free market as people can vote with more money in their pockets regarding the goods that are desired through buying them, the velocity of money is higher as a result of more economic activity within nations and between states, and international trade brings better products at fairer prices in conjunction with education via cultural exchange to countries and people that embrace it. Globalization will never die as humans need humans, the exchange of ideas and goods across borders throughout history has given us a competitive advantage as a species, and we are psychologically predisposed to continue doing things that benefit our livelihood. Why on Earth would anyone want to stop free trade?

"As history has repeatedly proven, one trade tariff begets another, then another - until you've got a full-blown trade war. No one ever wins, and consumers always get screwed." -Mark McKinnon