Artificially reducing our access to goods and services hurts our standard of living and makes our economy less successful
"Robert Rubin identifies three reasons running a government differs from running a business (“The Limits of ‘Running Government Like a Business’,” op-ed, Jan. 18). But he misses a fourth and especially important reason, given Donald Trump’s obsession with tariffs and reducing America’s trade deficit. Unlike a business, a country doesn’t succeed economically by selling to others as much as possible while buying from others as little as possible.
A business has no standard of living. It is a tool for transforming inputs into outputs in order to raise its owners’ standard of living by increasing their ability to consume. The people of a country, in contrast, do have a standard of living. It rises as their access to goods and services for consumption rises. America succeeds economically only insofar as its citizens’ standard of living rises—that is, only insofar as the value of the goods and services that we receive from trading partners, domestically and abroad, is greater than the value of the goods and services that we give in exchange.
Because protectionists such as Mr. Trump mistakenly think of America as a business, they try to run it in a way that we sell as much as possible to foreigners while receiving in exchange as little as possible. These protectionists don’t see that by artificially reducing our access to goods and services they reduce our standard of living and make our economy less successful.
Prof. Donald J. Boudreaux
George Mason U., Mercatus Center
Fairfax, Va."
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