Hypocrisy of sanctions and ‘Buy American’
BARRY FAGIN Barry Fagin is senior fellow at the Independence Institute in denver. his views are his alone.
Sanctions against Russia are doing what they’re supposed to: put Russia’s economy in the tank, isolate the country from the global economy, force its citizens to “Buy Russian”. While sanctions hurt ordinary Russians, a full-scale war would hurt them more. They’re the best nonlethal option we have.
But if the purpose of sanctions is to inflict harm upon the country and its citizens, why in the world would we inflict them on ourselves? Because that’s exactly what trade barriers, protectionism, and “buy American” policies do.
Can you guess who said “My administration is going to make ‘Buy American’ a reality”? What about “Buy American, Hire American”? “America First”? Who promised “I will keep jobs right here in America”? Who believes “Free trade is unfair trade”?
If you couldn’t say for sure, that’s because at one time or another Donald Trump and Joe Biden have endorsed these views, along with many Republicans and Democrats. These policies are nothing more than self-imposed sanctions. Sure, they’re not as sweeping or as punitive as what the world is imposing on Russia. A shot in the foot isn’t like a shot in the head. That doesn’t mean getting shot in the foot is good for you.
We have to keep in mind that just because some Republicans and some Democrats push protectionism, that doesn’t make it good for the country. It’s just good for getting votes. As P.J. O’rourke wrote, “Bipartisan consensus is when my doctor and my lawyer agree with my wife that I need help.”
There’s nothing wrong with “Buy American” as a slogan, as long as it remains a choice. There is everything wrong with using the law to make foreign products more expensive than they need to be, to “encourage” Americans to buy American. It is even worse when American companies lobby Congress to get protectionist legislation passed. Such laws are an admission that the companies in question could not earn the business of their fellow Americans fairly and freely.
Why is protectionism so attractive? The answer is predicted by the branch of economics known as public choice theory. The benefits of tariffs and trade barriers are concentrated (factory workers are organized), while its costs are distributed (consumers generally aren’t). That doesn’t make it good policy, only good politics.
Even weaker forms of protectionism that require taxpayer funds to be spent on American products (part of President Biden’s failed “Build Back Better” legislation) are bad ideas. Just last October, the DC Metro system had to pull about 60% of its cars from service, because it overpaid for substandard railcars assembled in Nebraska. Other examples are legion. The simple truth is that taxpayer interests are best served when used to buy the best products for the lowest price, wherever they may come from.
Even the argument that protectionism helps American producers is suspect. After all, how does protecting a business from competition help them in the long run? Businesses protected from competition have fewer incentives to innovate, fewer reasons to respond to changes in consumer demand, fewer reasons to treat their customers well.
Also suspect is the argument that free trade works only if all countries practice it. Just because one country chooses to help some of its citizens at the expense of others through the distribution of political privilege doesn’t mean we should. In fact, free trade is so powerful that it even works unilaterally. Hong Kong is incredibly prosperous and wealthy, in part because it practices unilateral free trade: virtually no barriers or tariffs against other countries, regardless of how those countries treat Hong Kong exports.
Trading is not war, where one side wins and the other side loses. Unilateral free trade is not unilateral surrender. It is simply one country’s refusal to copy another’s bad idea.
Applying sanctions to Russia while pursuing protectionist policies in America makes no sense. Why deploy a powerful weapon against our enemies in war, and then turn it on ourselves in peace?
OP/ED
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2022-03-10T08:00:00.0000000Z
2022-03-10T08:00:00.0000000Z
https://daily.gazette.com/article/281865826941261
The Gazette, Colorado Springs