L.A. Liberty

Xenophobia or just Bad Economics?

Worrying that some low-skill jobs have “moved” overseas and may never return is like worrying that after being promoted you’ll never again be able to clean toilets for a living.

Comparative advantage is a beautiful thing for everybody.

And raising tariffs to “protect” jobs in favored industries - like both Obama and Romney vowed to do in the recent debate - is like shooting your foot to keep the doctor busy. This tax placed on the consumers of those cheaper goods (which is, ultimately, what every tariff is) would have otherwise served another purpose of higher utility to the consumers. The consumers would have been better off, in other words. And we are all consumers. Furthermore, following the candidates’ logic, they’d have to agitate against all other sources that, in their view, ‘limit jobs’: from machinery (low-skill labor replaced by machines) to durability (the longer goods last, the less demand for manufacturing replacements) to advances in education and skill (if workers are more productive, fewer workers would be needed for the same work).

As I noted over a year ago when I addressed tariffs and other silly proposals for ‘creating jobs’: “Take away the ability of people to make free decisions for themselves and you can top-down all sorts of results favorable to bureaucrats and unthinking [statists]. Why not outlaw emails? That will certainly create more postal worker jobs. Or shut down shovel factories and shovel imports. If everyone has to dig with a spoon, more people will be forced to dig the same size hole.”

Breaking windows is poor economic policy.