That new sanctions imposed upon Russia as a result of the Novichok and Skripal events is not greatly surprising, as the Washington Examiner‘s Tom Rogan details. What interests me is the underlying logical error being made here. For Trump insists in this case, as is true, that being denied access to foreign-made goods is something that impoverishes the people of Russia – the Russian economy as a whole will be worse off as a result of not being able to buy those now-sanctioned American goods.
This is correct by the way: Either Russian industry and/or consumers will have to do without the items, or domestic resources will have to be diverted from what they currently produce to replace those imports no longer available. Either option makes them poorer. It’s also true that American industry will be harmed, as they’ll no longer have willing buyers for their production. But that’s, for my purposes here, a minor matter.
What does interest me is that the same people who can see the above also believe that cutting off Americans from foreign-made goods makes Americans richer. That’s exactly what tariffs do, in economic terms, they’re nothing more nor less than sanctions that we apply to ourselves. The insistence is that foreigners are ripping us off by selling us what we desire to buy and thus we should prevent ourselves, through those punitive taxes, from buying foreign. This will, through some hand and wand waving, make us richer.
Presumably either because not having those foreign goods we desire makes us richer in some incomprehensible manner, or because diverting domestic resources from what they are doing to replace those imports will.
The difficulty here is in believing both of these things. It is possible to believe that import replacement, industry protection, makes us richer. It’s possible even if it’s untrue, but then we’re all able to believe impossible things before breakfast. It’s also possible to believe, correctly, that denying people imports makes them poorer. But the difficulty is in believing that no imports makes Russians poorer while no imports makes Americans richer. Sure, there are minor differences in language and custom between the two groups, but no tribes of humans differ so much that trade affects them so entirely differently.
Lack of trade is either damaging – in which case why are we punishing ourselves with tariffs — or it’s beneficial — therefore why are we doing it to Russians for poisoning people? To believe that less trade is enriching, thus we should use it as a punishment well, formal logic has a technical phrase for such thinking: drivelling idiocy.
Think on it for a moment. The U.S. has denied Cuba access to nearly all American imports for just about all my lifetime. If tariffs and industry protection make a place rich, then Cuba’s a shining beacon of how rich a human society can be then, isn’t it? Oh wait, it’s not.
Then autarky and lack of trade aren’t what make a place rich then, are they? So why are we cutting ourselves off from those nice things that foreigners make better and cheaper than we do, those very things which make us richer, through tariffs?
It’s one or the other folks. Sanctions and tariffs are the same thing, they either make us richer or poorer, the answer isn’t “it depends.” If they’re punishment for Russians, then why are we doing this to ourselves?
Sanctions and tariffs? That’s madness. Either might be justified, but not both.
Tim Worstall (@worstall) is a contributor to the Washington Examiner’s Beltway Confidential blog. He is a senior fellow at the Adam Smith Institute. You can read all his pieces at The Continental Telegraph.
