The Ugliness of the Great Protectionist State

It’s often said that economists have a knack for stating the obvious—insights that require more common sense than advanced degrees. Allow me to indulge in a bit of this reflective reasoning.

Imagine a scenario where foreign enterprises, as well as the international branches of American corporations, find themselves grappling with unpredictable American tariffs. One month they soar, the next they plummet, and then they swing back up again. What do you think these companies will do? Surely, the logical step would be to relocate their production to the United States, right? But hold on—those same companies are acutely aware that once they set up shop in America, they too could be subject to the very same capricious tariffs on their raw materials. And let’s not forget the inevitable retaliation from other countries. In this chaotic environment, the once-coveted American market may lose its allure, leaving many consumers financially strapped, with only the government cronies thriving.

For entrepreneurs, the most sensible decision might be to stay put or relocate to a country that is still committed to free trade—or better yet, to one that embraces it unilaterally, if such places exist anymore.

On a more optimistic note, there’s a chance that Americans, along with others feeling similarly oppressed by their governments, might begin to question blind faith in state authority. They may start to explore, or rediscover, classical liberal and libertarian ideologies that advocate for a more constrained government.

However, there’s also the risk that disillusioned citizens could rally around a new, more authoritarian figure—someone promising to fix the proverbial wall, ensure the trains run on time, and restore order. Historically speaking, this has often been the trajectory for societies facing crises of authority and governance — as explored in the link provided here.

Ultimately, one could argue that there’s something far worse than a global desire to migrate to one’s country: it’s when no one wants to come at all.

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