Wednesday, May 6, 2015
Anders Chelgren chapter 12 question 7
I found chapter seven interesting. Wheelan makes the claim that trade barriers are a tax. He states that by imposing government import taxes competition is lost thus farmers can charge more for their products. It is simple supply and demand, by adding tax on imports, the supply imported decreases thus the remaining product has higher demand. By protecting special interest groups politicians make friends and appear to be major advocates of the people despite the true economic effects of their decisions. This orange juice example is different but still similar to subsidizing the Moher farmers. As a general statement the less government involvement the better, including in trade. Free trade is true capitalism. The one exception I can immediately consider is for vital recorces. Hypothetically, If we as a country decide to import 95% of our food we would no longer need to have any farmer subsidies and could likely have food grown far cheaper due to the low labor costs in other places. Yet should we? Using this same annology again consider an issue, catastrophe or war breaks out. If importation is impossible due to a naval blacked like the civil war or even a trade embargo like Cuba could we survive? I don't know I am nearly weighting the options in my head and still thinking of a conclusion.
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