This past week, during the G7 meeting between the leaders of the world’s most influential nations, there was much anticipation that there would be a mob of angry nations against President Donald Trump and the US. In fact, there were many mumblings and phone calls amongst other leaders as they discussed how they would deal with Trump and his seeming dogged protectionist infatuation with raising tariffs. Most of the world’s leaders attended the summit fully expecting a stiff confrontation.
However, that is not what initially happened. In what I consider a brilliant move on the part of Trump and his team, instead of initially discussing what tariffs he would increase if x,y and z didn’t happen or if whichever nation wouldn’t reduce tariffs on whatever industry, he simply raised the simple question of why don’t we just not have tariffs at all? It’s brilliant in the sense that it not only shut down all the anticipated arguments, but also placed the world’s leaders in a position of having to awkwardly defend the very idea of tariffs (and subsidies), and they knew they couldn’t really do that. It highlighted the true intentions of the world’s leaders as representatives of the authoritarian nature of almost every existing government in the world today.
Now, please don’t misunderstand this article as me beaming with a Trump glow. In fact, Trump knew full well no one would take him up on such an offer. I do believe if they had he would have followed through, but his next moves will be ones that I believe are the wrong ones. He will seek to raise tariffs, which has always done more harm to the nation raising the tariffs than it has done good that nation. Trump will do just as he has threatened and hurt his own country;’s economy with new tariffs.
What I do enjoy, though, is that all of the world’s major leaders had to essentially admit that they don’t want their people and their economies to be better off. At least not on their own. They want their people and economies to be dependent upon their leadership and their governments. While everyone at the summit knew that the greatest of outcomes would be for all the world’s most powerful nations to exercise free trade, and that this would benefit the entire world in great proportions, that really wasn’t their aim. Their aim was to gain greater power. What an incredible admission!
When given a golden opportunity to end tariffs and increase freedom and prosperity for most citizens of the world, the world’s leaders instead chose to cling hard to their own designs. The world’s leaders know full well that tariffs hurt their own citizens, but they don’t care. Tariffs have never served the function of creating market efficiency, and they have never helped protect a nation’s economy. Instead, they have always been a means for governments to exercise control over huge parts of their own economies, and where there is control, there is power. Politicians and world leaders seek power. It’s like their drug of choice, and they can never get enough of it.
The marketplace is the most efficient when there are no interventions. When a nation raises tariffs on certain goods, what happens isn’t that the economy does better. Instead, what happens is that its citizens pay more for those goods. Any benefit derived from trying to “save jobs” are wiped out by people having to pay too much for goods and services. When particular goods are subsidized by government, people pay hidden higher prices, because their tax dollars are going to support the subsidies. They are still paying additional money – just through taxes rather than directly. Central market controls do more harm they do good. An isolated industry might seem to fair well because of them for a while, but the economy at large suffers.
It’s a very rare occasion when world leaders have to admit that they care a lot more about their own power than they do about the people they represent. It is exceptionally rare that support for authoritarianism is so brazenly and nakedly on display for all to see. How hard do libertarians fight to get people to see these very things? For once, the people we are always asking everyone to be wary of, actually admitted themselves that people should be extremely wary. Hopefully, the citizens of the world were paying attention. It may be a long time before such admissions are made so openly again.
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