When I specialize in the work that others pay me more for, I produce more of what people value.
If one of my customers lives where he is subject to different government people, often those people force him to pay them some money before he can buy my work.
Tariffs Done Right versus Tariffs Done Wrong
President Trump has raised a chance that those government people might get pushed back against by USA national government people.
True reciprocal tariffs could be levied product category by product category. That would target those government people and their cronies very precisely, crony by crony. This targeting would systematically incentivize those government people to eliminate their tariffs. That would help me specialize in the work that my customer pays me more for.
But the tariffs that Trump is calling reciprocal, aren’t. And they aren’t half the tariffs that would be reciprocal. Trump isn’t assessing his tariff rates based on different government people’s tariff rates. He’s assessing his tariff rates based on how much more our people import from a nation’s people than we export to the nation’s people.
So Trump isn’t targeting other nations’ government/crony relationships, crony by crony. Instead, he’s keeping in place and protecting all the harms that governments are currently wreaking as they outlaw sound moneys, borrow and spend, and regulate.
Further, Trump’s tariff rates ratchet up how many decisions our national government takes out of the hands of customers (the people who work out what’s most valuable to them), and takes out of the hands of producers (the people who work out the best ways to produce value).
Trump is issuing overall edicts, both directly on our people and indirectly on other nations’ people. Other nations’ government people are being called on to issue edicts on their people to try to make the USA imports from and exports to each of their nations nation balance in the ways that Trump and the other government people think are best.
When Individuals Are Free to Use Good Money, Individuals Balance Trade
What’s actually best for my customers and me is to be left alone. Then we make our best decisions for ourselves.
To enable the rest of us to add the most value ourselves, government people must limit other government people to within good boundaries.
Governments are justly instituted only to secure individuals’ unalienable rights, among which are individuals’ rights to life, liberty, and secure property. Above all, governments must make these rights secure from the grabbing hands of government people and their cronies. Every other action is out of bounds for government people, if they do their jobs justly.
Left to ourselves, free people would produce and use sound moneys, starting with gold. This would leave it to individuals to balance out the trade among the people of various nations.
The USA people could temporarily buy more imports. But then the USA people would end up with less gold to spend to buy products made by other nations’ people. Also, other nations’ people would end up with more gold to spend to buy our products made by USA people. Individuals would make choices for themselves that would optimally rebalance trade.
Individuals’ choices would balance trade in such a way that the total quantity of gold that the USA people would have on hand would tend to be constant.
Importantly, trade wouldn’t get balanced between the USA people and each individual other nation’s people. Instead, trade would get balanced between the USA people and all other nations’ people combined.
This great flexibility is essential to ensure that each nation’s people can specialize in doing the work that others pay them the most for.
Don Boudreaux illustrates:
Americans buy $1M of wine from France, then the French use these export earnings to buy $1M of bananas from Guatemala, and then Guatemalans spend this same $1M on software imported from America. As a result, each of the three countries has a “trade deficit” with another country, and a “trade surplus” with a different country.
The USA’s overall trade deficit is zero, and each nations’ people specialize in what others pay them more for.
Individuals Are Only Free When Government People Have Good Boundaries
Individuals aren’t able to specialize this way, freely and flexibly, under Trump’s tariff plan. But people are supposed to be free to specialize freely and flexibly, under the Constitution.
Constitutionally, Trump must cease and desist from executing his decreed rules. Constitutionally, Republican congressional majorities must get any such rules debated on and voted on, up or down.
Instead, Republicans are letting Trump make many decisions himself. By doing that, Republicans are also pushing other nations’ government people to make many decisions themselves. Republicans are taking all these decisions out of the hands of customers and producers.
Every choice that the Republicans are muscling their way in and controlling with their tariffs is something that free people would make for themselves, and would make far better. Republicans are ratcheting up their violations of individuals’ freedoms to choose what products to buy and what work to do. Republicans aren’t holding themselves and others to good boundaries.
Republicans are treading all over our boundaries because they refuse to hold themselves and their esteemed colleagues to within the constitutional boundaries, which respect each individual’s freedom.
Current government money is unconstitutional. Government spending is massive and nearly all unconstitutional. Government regulations are all unconstitutional.
The Constitution requires every president to, all by himself, substantially hold governments to within significant good boundaries; including:
- Keep the money quantity constant, which would work much the same as freeing people to use gold money.
- Close every unconstitutional department, agency, and subdivision, ending its unconstitutional spending.
- Stop executing every regulation.
These actions are constitutionally required from Trump. These actions would deliver the benefits that Trump wants from tariffs. Trump’s tariffs won’t.
The Constitution requires every official to use his powers fully to make other officials cease and desist. Nearly all officials simply don’t.
They’re from the government and they’re here to help, alright—to help themselves and their cronies.
We’re stuck with these people for now because both of our current major parties are well-adapted to do the bidding of activist-crony socialists and business-crony socialists. We need to build a major party that’s a real alternative.
Maybe, for starters, today’s ongoing sequel to 1970s stagflation plus 1930s–1940s regime uncertainty will finally be what it takes to get better decisions from the older Iowa Republican caucus voters the next time around.
