Site icon Being Libertarian

The Difference Between “Buying American” and Trade Wars – Red Dirt Liberty Report

Danny Chabino

There’s a certain pride about from where you come and where you live. It’s a part of nearly everyone’s identity, whether they want to admit it or not. When people boast about wanting to buy goods from their own country, it’s really just an extension of national pride, rooted in a desire to support other people like themselves. It’s understandable, and in many ways, it’s admirable. I practice my own variation. I prefer to buy what I can from and support local businesses rather than national or international chains, though I do shop with both. In my case, it’s because I’ve been one of those local business owners and I desire to help people who are in similar circumstances.

There is no problem with wanting to do your own buying and support businesses based on the nationality or region of those businesses. If everyone did so, it might have a negative impact on the pricing efficiency and quality efficiencies in the marketplace, but ultimately, it’s the consumers’ desires that are important in free markets. Goods offered should always reflect what people want.

It becomes a problem, however, when people start wanting to convert this sometimes admirable sentiment into government action. It is one thing to practice your own desires in seeking out and supporting whatever you like, but it is something different entirely when you call for government to act by force. There’s nothing right about forcing others to buy according to your preferences rather than their own. There’s nothing about that which represents a free society or a free capitalist economy. And it really isn’t beneficial.

When trade policy is exercised by a government, artificial forces come about in the market that interfere with market efficiencies. For example, when tariffs are raised on certain goods, goods in the state that is raising the tariffs become more expensive. The idea is often that the tariffs will turn consumers away from foreign goods and toward goods that are produced domestically, thus increasing the number of available jobs. The problem is that the rise in price decreases jobs in other businesses that are trying to maintain profits as they sell the more expensive goods. Also, the average cost of living goes up, giving people less purchasing power, having a negative effect on the market and reducing many more jobs than are created. The net effect is bad for the economy.

It is even worse when a trade war ensues and there is a tit for tat reaction to every new tariff on both sides. Nobody ever wins a trade war. Both sides always lose, because they cause destruction in their own economies.

When countries support tariffs and other policies that are seemingly targeted at reducing trade with another (or several) country, the proper response is probably not retaliatory tariffs. There’s no need to punish your own country to punish another. The proper response would certainly be, in part, diplomacy, but also where diplomacy fails, recognize that their own tariffs hurt themselves more than other nations.

Lowering tariffs and encouraging as much trade as possible is a much better stimulant to an economy than trade wars. It is best to ignore the actions of others that cause harm to themselves, and to focus on actions that will aid an economy, such as lowering all tariffs and freeing up regulations that create protections for businesses that prevent competition. A combination of deregulation, lowering tariffs and other taxes, and a decrease in national debt is a better boon to an economy than is a trade war.

There is nothing wrong with a sincere desire to buy where you live and support domestic businesses. There’s nothing wrong with taking national pride into your financial decision-making. If that is what motivates you, then by all means, buy what you like. That’s the beauty of free trade.

But using force and coercion to eliminate the free choices of others does not represent freedom. Nor does it encourage more employment or a better economy. “Buying American” is a personal preference available to you in a free market, but trade wars are government force and coercion and represent diminished freedoms. It’s okay to have your preferences, but it’s not okay to use government to force other people to buy according to what you like.

The following two tabs change content below.

Danny Chabino

Danny Chabino has a background in operating small businesses. He has been involved in managing and/or owning the operations of multiple retail establishments, a sub-prime lending company, a small insurance company, a small telemarketing venture, and insurance consulting. In addition to these activities, he also has spent many years managing investments in stocks and stock options as a successful trader. He is the married parent of two adult children, living as a proud lifelong Oklahoman and a part-time redneck. Danny writes for the enjoyment and pleasure of sharing ideas and for the love of writing itself. His opinions skew libertarian, but he enjoys hearing open debate and listening to or reading of opposing ideas. As an odd confession, he personally detests politics, but enjoys writing about political ideals and philosophies.

Latest posts by Danny Chabino (see all)

Exit mobile version