April 6, 2017
1845, the French government levied protective tariffs on scores of items, from
sewing needles to locomotives. The intent was to protect French industries from
companies outside France that could produce the goods more cheaply.
reaction from Mister Bastiat
requiring the closing of all windows, dormers, skylights, inside
and outside shutters, curtains, casements, bull's-eyes, deadlights, and blinds
— in short, all openings, holes, chinks, and fissures through which the light
of the sun is wont to enter houses”.
Bastiat’s satirical petition did an exemplary job of exposing the tendency of
governments to pander to special interest groups, to the detriment of everyone
the ages, protective tariffs have been created for this purpose and,
historically, they work only briefly, if at all.
Make your choice, but be logical; for as long as you ban, as you
do, foreign coal, iron, wheat, and textiles,
in proportion as their price approaches zero, how
inconsistent it would be to admit the light of the sun, whose price is
all day long!”
On the surface, tariffs sound like a good idea, but in reality, they’re
veritable icebergs of economic destruction. Two principles should always be
considered when musing on a tariff:
Tariffs (protectionism) never benefit a
nation. They do, however, often increase the revenue received by the imposing
The more a
people pay for products, the lower their standard of living.
Jeff Thomas is British and resides in the Caribbean. The son of an economist and historian, he learned early to be distrustful of governments as a general principle. Although he spent his career creating and developing businesses, for eight years, he penned a weekly newspaper column on the theme of limiting government. He began his study of economics around 1990, learning initially from Sir John Templeton, then Harry Schulz and Doug Casey and later others of an Austrian persuasion. He is now a regular feature writer for Casey Research’s International Man (http://www.internationalman.com) and Strategic Wealth Preservation in the Cayman Islands.
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