Unsound Grounds for Tariffs
Mercantilism. To Abraham Lincoln has been attributed the remark. MI don’t know much about the tariff.I know that when I buy a coat from England, I have the coat and England has tile money. But when I buy a coat in America. I have the coat and America has the money.
This reasoning represents an age old fa-racy typical of the so-called merchant list writers of the and eighteenth centuries. They consider a country fortunate which sold more goods than it – bought, because such a “favorable” balance of trade meant that gold would flow into the country to pay for its export surplus.
The mercantilist argument confuses means and ends. Accumulating gold or other monies with not improve a country’s living standard. Money is worthwhile not for its own sake but for what it win buy from other countries. Most economists today therefore reject the idea that raising tariffs to run a trade surplus will improve a country’s economic welfare.
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