Capitalists should focus on the big bucks
Protectionists are as thick as flies in campaign season. Special interests lobby for new regulations, new subsidies, tax credits, and other goodies politicians can give them in return for their support to get elected. As H.L. Mencken once said, “Every election is a sort of advance auction of stolen goods.”
In 2011 now Democrat Presidential candidate Bernie Sanders (I-VT) came to the Smithsonian Museum gift shop and complained that the bobblehead presidential dolls were made in China. To Bernie, it was a patriotic insult that the gift shop did not sell bobblehead dolls made in America!
Bernie’s comedic error is the idea that America—it’s amazing again how the self-described socialist and the billionaire capitalist Donald Trump think alike—should make everything. Should a wealthy nation like America make everything, even if we could make everything better?
Suppose Dr. Ben Carson, who is arguably the best pediatric neurosurgeon in the world, can do 1-3 brain surgeries a day, averaging over $20,000 a day for his rare skill. Now suppose the sleepy-eyed doctor when put in front of a computer is also the world’s fastest word processor. His fingers fly over the keyboard like an energetic Trump on Adderall, and he can earn the unheard of $2,000 a day for data entry. Now, just because Dr. Carson is both the world’s greatest neurosurgeon, and the world’s fastest typist, should he spend half his days typing and half saving lives?
Obviously, it is better he spend all his time on surgery, and let others of much lesser skills do data entry.
A rich nation like America should not waste its time making bobblehead dolls if China is willing to do the job, even if their bobblehead dolls are of lesser quality than we can make them. Why? Because consumers do not care so much about the quality of their bobblehead dolls, but they sure do care about the quality of their neurosurgery. With free trade, consumers sort out which American and which foreign products they are willing to buy.
Unfortunately, we do not allow imported raw materials from many poorer countries or if we do we slap a tariff on them. Republican presidential candidate Sen. Marco Rubio, for example, supports the sugar tariffs that keep Florida sugar plantations in business. It would be cheaper to import the sugar from the Caribbean—including Cuba. That savings would be passed on to consumers. But the sugar lobby helps the senator get elected, so he puts their interests over consumers who then have to pay more for sugar. He also denies poor countries who can export sugar the revenue they badly need for their workers and industries. If the Caribbean nations become wealthier, you can be sure they would buy more American products, therefore enriching our workers and producers in return.
The subsidized sugar growers also pollute the Everglades, and Sen. Sanders blames the pollution on greed. It is greed, but it is not greed that comes from a free market, but from the privileges bestowed by Sen. Rubio and other politicians. Bernie would bestow privileges to American bobblehead doll manufacturers, to labor unions, to college administrators, to federal bureaucrats, and other special interests. Politicians benefit by enabling greed.
Really, all this stuff was figured out by economists like Adam Smith and David Ricardo 200 years ago. Bernie, an avowed socialist, can almost be forgiven for not understanding economics. Rubio, from the party that proclaims America “always is a force for good in the world,” should not.