Friday, November 9, 2007

A Perverse Sort of War

Let's say two countries declare war on one another (A and B). The government of A launches the first strike, a direct assault on the Citizens of A. Seeing this outrage, the government of B launches a counterattack on the Citizens of B. Not to be outdone, A will no sooner raise the stakes, doing further harm to the Citizens A, which will undoubtedly be matched by increased harm to the Citizens of B. So the cycle goes.

This is, in a nutshell, economic protectionism. To "protect" one's industries from the "evils" of global competition, requires the state to tangibly harm its citizens. Tariffs do a wonderful job of this, and at their worst, can be devastating. Consumption is reduced. Output is reduced. Trade is reduced. This is all in the name of "protecting" us from harm.

Help us by hurting us. Perverse indeed.

Hat tip to Cafe Hayek

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