New Thinking from the 17th Century!
Here’s a letter to Foreign Policy.
Editor:
You report that “Oren Cass explains how the president-elect has created an ‘enormous amount of space for new thinking.’” (“The Case for Trump’s Tariffs,” Nov. 22).
Nonsense. Trump’s pronouncements on trade have merely reopened space for old non-thinking.
The understanding that Trump and Cass have of trade was all the rage when mercantilist thought was ascendant in the 17th century. Alarm over trade deficits, fear that imports diminish a country’s productive capacity and shrink its employment opportunities, the presumption that international trade is a zero-sum competition among nations, and the conviction that consumers, entrepreneurs, and investors must be corralled and controlled by government officials lest they import too much, export too little, and invest unwisely were staples of mercantilist dogma.
The new thinking about trade didn’t begin in earnest until the 18th century when David Hume and Adam Smith showed that mercantilist economic ‘thought’ is a nest of fallacies and superstitions. These scholars, followed later by David Ricardo, exposed mercantilist assumptions, ‘analysis,’ and conclusions as springing from a failure to think seriously about trade – from a lazy or stubborn refusal to trace the consequences of trade beyond those that immediately occur and can be comprehended by a third-grader.
Hume, Smith, Ricardo, and countless competent economists ever since have thoroughly debunked mercantilist notions and nostrums. They have done so repeatedly using both theoretical and empirical analyses. Arguments offered today against free trade by Trump, Cass, and other protectionists are just as new, and just as sound, as are arguments offered today by believers in the geocentric view of the universe.
Sincerely,
Donald J. Boudreaux
Professor of Economics
and
Martha and Nelson Getchell Chair for the Study of Free Market Capitalism at the Mercatus Center
George Mason University
Fairfax, VA 22030
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