Protection Against Whom?

Businessmen often descend on Congress demanding restrictions on foreign imports. Why? To protect them against foreign businesses who have cheaper production costs due to lower wages and fewer labor and environmental regulations. They say they want fair trade and a level playing field.

Protectionist arguments have emotional appeal but little else and it's not protection from foreign competitors that American businesses are asking for. Let's look at it.

Say imported shoes sell for $50 and domestically made sell for $75. Americans are free to buy either pair. If most consumers buy the $50 pair, the manufacturer of the $75 pair might go out of business. Had consumers chosen otherwise, the outcome would be different.

Here's the big question: if the American shoe manufacturer goes out of business, who is directly responsible? Surely, it's not the foreign shoe manufacturer; he has no power to force consumers to do anything. The villain is the American consumer, who could have purchased the $75 pair of shoes but didn't.

Thus, the challenge for American manufacturers, and their workers, is to find ways to protect themselves against, not foreign manufacturers, but American consumers who prefer cheaper prices. The way to do that is to ask Congress to enact tariffs and quotas to deny Americans the cheaper priced option.

In my book, that's mean and unseemly.

I'm Walter Williams
Nightly Business Report
November, 2001
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