Do you have a dumb question that you're kind of embarrassed to ask in the main thread? Is there something you're just not sure about?
This is your opportunity to ask questions. No question too simple or too silly.
Culture war topics are accepted, and proposals for a better intro post are appreciated.
Jump in the discussion.
No email address required.
Notes -
The arguments in favour of free trade are convincing, but I've always wondered why we don't see unilateral free trade. After all, if you take at face value the arguments that tariffs on foreign imports hurt domestic consumers more than they benefit domestic producers, it would make sense to completely remove foreign tariffs without waiting for trading partners to do the same.
There are two explanations I can think of:
Unilateral free trade is good, but multilateral free trade is better. Having tariffs gives governments the option of removing them in exchange for foreign countries doing the same. Without tariffs, governments have no leverage.
Politics. Domestic consumers are better at lobbying governments than consumers, since the benefits of lower tariffs are diffuse, whereas the cost of removing them are concentrated on a small number of producers.
Am I missing anything?
If you want to read more on the economics of reason 2, the technical term is "concentrated benefits and diffuse or dispersed costs".
More options
Context Copy link
More options
Context Copy link