Tariffs do not create prosperity

#270

My Dear Friend of Democracy,

Tariffs will make America wealthy again, Donald Trump says.

Trump is wrong.

At least, economists know that. They learned their lesson while reading "The Wealth of Nations" by Adam Smith, the father of modern economics.

Even back then, 250 years ago, there were high tariffs. Even then, there were people like Donald Trump who saw tariffs as a source of prosperity. However, it was usually a tiny minority (like national company owners) who actually benefited from tariffs, at the expense of the vast majority (all consumers).

Not least because of this, Adam Smith wrote "The Wealth of Nations", which instantly became a bestseller. There, Smith explains why trade makes a nation wealthy and trade restrictions make a nation poorer:

"If a foreign country can supply us with a commodity cheaper than we ourselves can make it, better buy it of them with some part of the produce of our own industry employed in a way in which we have some advantage. […] The value of [a country's] annual produce is certainly more or less diminished when it is thus turned away from producing commodities evidently of more value than the commodity which it is directed to produce [by trade policies]. […] The industry of the country, therefore, is thus turned away from a more to a less advantageous employment, and the exchangeable value of its annual produce, instead of being increased, according to the intention of the lawgiver, must necessarily be diminished by every such regulation." (Bk. 4, Ch. 2)

In plain words: Tariffs make a country poorer.

✊ We all know that what Donald Trump is doing is not about sound economics. It is not about the benefit of the citizens. It is all about his benefit. Let's make this clear! Let's point out where Donald Trump is only pretending that his planned measures are for the good of all. Unmask him as a cheat.

See you in Democracy,

Johannes