Daniel Freeman writes for CapX
IEA Managing Editor Daniel Freeman has written for CapX on Trump’s misguided embrace of tariffs.
Daniel wrote:
“The US in the late-19th century did have huge economic advantages which helped it become an industrial juggernaut, but these had little to do with tariffs. Among other factors, US industry had access to abundant land, a steady supply of labour from old world immigration, easily accessible natural resources (e.g. iron ore near the Great Lakes or oil in the west), a large and efficient transportation network which could cheaply move them to where they needed and readily available credit which industrialists were able to plough into capital goods.
“With this in mind, it seems highly likely that had the US not forced the misallocation of labour and capital through the use of tariffs, it would have become the world’s leading economy sooner, as Klein has argued in a recent interview.
“It is true that the US industrialised in the context of high tariffs. It is also true that some 16-year-olds pass their GCSEs in a context of binge drinking. It does not follow that the one led to the other and it certainly doesn’t mean that in middle age you should spend your evenings drinking large quantities of cheap cider in a park to boost your career prospects or that an advanced economy like America’s will benefit from a revival in protectionism.”
Read the full article
here.