How Free Markets Would Make Our World A Better, Friendlier, and Safer Place

"To protect jobs," a 100% tariff on shoes might be made "to protect" a country's shoe industry.

With Tariff protections a native shoe industry can produce poor quality shoes, raise the price 80%, and still be competitive. The local manufacturers have no incentive to invest in a better product, and outside producers will improve processes while the locals do nothing but profit - for a while.

Everyone that wears shoes suffers higher prices and lower quality. Workers demand increases in benefits and pay so they can share in the windfall profits. With no incentive to improve and rising costs, the native shoe makers fall further behind world markets, exports stop. Eventually shoe quality is so low, and prices are so high compared to offshore competition, government drops the tariffs - and the native shoe industry dies.

Short term politically based gains were stolen from the many for the benefit of a few. In the long term the few will also be sacrificed.


"There is only one difference between a bad economist and a good one: the bad economist confines himself to the visible effect; the good economist takes into account both the effect that can be seen and those effects that must be foreseen.

Yet this difference is tremendous; for it almost always happens that when the immediate consequence is favorable, the later consequences are disastrous, and vice versa. Whence it follows that the bad economist pursues a small present good that will be followed by a great evil to come, while the good economist pursues a great good to come, at the risk of a small present evil." - C. F. Bastiat

A basic economic rule: every government action will eventually bring the opposite of the desired effect.

It is only by inaction, by refusing to interfere with voluntary exchange, that governments can promote justice and prosperity. Even rules and benefits passed to assist business or customers are counter-productive; leading to malinvestment and fraud. Regulation is a dangerous tool, to be used mainly to ensure the sanctity of commitments, and that sparingly.

Sadly many leaders view themselves as law makers, and so are constantly looking for more laws to make. "Individuality is the aim of political liberty. By leaving the citizen as much freedom of action and of being as comports with order and the rights of others, the institutions render him truly a freeman. He is left to pursue his means of happiness in his own manner." - James Fenimore Cooper


Another benefit of free markets and cooperative self interest can be demonstrated with shoes. Even as the Soviet Union made poor quality shoes for its citizens its bureaucrats would not admit the errors or seek outside suppliers. Free markets in contrast provide wide ranges of quality and price as individuals compete according to their personal insights of business processes.

Some capitalist shoe makers will be wrong and go out of business - but all consumers may share the value of their under pricing or high quality before they depart. Others will take their place and continue to drive overall quality higher and prices lower by constantly introducing new technologies and procedures.

"Only among free men do pioneers emerge." - Leonard Read

Market driven improvements are undiscovered and unwanted by central planners; controlled markets always favor the well connected few and hurt everyone else. Central planning can't understand a simple pencil, much less design an automobile - only natural enterprise has that power.

Oh, and the government keeps tariff money as another form of hidden taxes. Inflation is a hidden tax created by printing money - diluting the value of existing money. Regulations are a hidden tax when used to protect a favored ((bribing)) entity. Court or congress ordered penalties are a hidden tax unless returned to an injured party. Government fees for service beyond their cost..., etc.

Millions pay much more so a few profit for a short time.

"Often the masses are plundered and do not know it." - Bastiat

Don't form your opinions on the basis of short term emotional based solutions with hazardous long term results. That is how politicians lead - toward disaster. Instead consider both short and long term consequences, and the unobserved benefits of doing nothing.

Markets will solve problems if left alone; governments will enslave if given opportunity.

"It is not from the benevolence of the butcher, the brewer, or the baker, that we expect our dinner, but from their regard to their own self-interest. We address ourselves, not to their humanity but to their self-love, and never talk to them of our own necessities but of their advantages." - Adam Smith

The world is in transition - you can help avoid a vicious change and also assist in the creation of a virtuous social cycle.