Protectionism and the Destruction of Prosperity
Murray N. Rothbard
Protectionism is the economic policy of restraining trade between states, through methods such as tariffs on imported goods, restrictive quotas, and a variety of other government regulations designed to discourage imports, and prevent foreign take-over of native markets and companies.
By raising taxes on imported goods or imposing limits the choice of the consumer is restricted. Also, both the cost of the goods and the cost of doing business increase. Under protectionism you might end up poorer because protectionist laws reduce consumer spending power by destroying jobs.
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If the American wage rate is higher it means that the American labourer is more heavily capitalized and it is more productive. If they impose protective tariffs to save less efficient US firms, the protectionists are injuring the American consumer and also harming efficient US industries.
Inter-state tariffs are unconstitutional, but even so, protectionists have been able to impose inter-state tariffs in another guise.
The industrial revolution brought prosperity to the starving masses. The development of railroads has reduces dramatically the cost of transportation. A tariff is like a “negative railroad” and protectionists are just as economically destructive as if they were physically “chopping up railroads”.
Dumping is an informal name for the practice of selling a product in a foreign country for less than, either the price in the domestic country, or the cost of making the product. Dumping is good for the regular consumer, but it harms domestic industries (producers).
Infant industries are those that are not strong enough to survive open competition (they depend on government subsidies and protectionism). These inefficient...