Sometimes, when the leaders of a foreign country do something very naughty, the other nations of the world get together and punish them. Assuming bombing isn’t on the menu, a popular way to administer a political spanking is to dramatically curtail the export of certain goods to the troublemakers. The thinking is that if you want your enemies to suffer, you should deny them the incredible gains in productivity and prosperity made possible by comparative advantage and division of labor operating on the global scale.
In other words, the penalty for behavior beyond the political pale—such as the development of a new nuclear arsenal, the use of chemical weapons, genocide, or widespread nationalization of industry—is to be cut off from trade.
How odd, then, that protectionists seek to create the same conditions at home—artificial scarcity or elevated prices for certain imported goods—as a way to stimulate the domestic economy and punish our economic enemies, writes Katherine Mangu-Ward in the latest print edition of Reason.
from Hit & Run https://ift.tt/2HEE9wJ
via IFTTT