As president of the most powerful country in the world – and a man with the utmost confidence in his own judgment – would Donald J. Trump dare to tell the Sun, that fiery ball at the center of our solar system, “You’re fired”?
It seems so, if we take him at his recently tweeted word (“Trade wars are good, and easy to win”) and take the liberty of injecting him into the center of the argument found in the “Candlemaker’s Petition,” a satire of protectionist tariffs written by the great French economist, Frédéric Bastiat (1801–1850).
In this classic economic parable, published in 1845, the manufacturers of “candles, tapers, lanterns, and street lamps” join forces with the producers of “tallow, oil, resins, and alcohol” in demanding protection against a powerful foreign competitor – namely, the sun. They ask for a law ordering their countrymen to keep all windows and doors covered during the day. Their petition states:
We are suffering from the intolerable competition of a foreign rival, placed, it would seem, in a condition so far superior to ours for the production of light that he absolutely inundates our national market with it at a price fabulously reduced.
Even in pre-electrical days, if a government were to order everyone to switch from sunlight to candlelight, it might create a number of jobs in candlemaking and related industries. However, it would also impoverish a far larger number of people by forcing them to replace a free and plentiful resource with an inferior yet costly product. In this case, the money people would spend on additional lighting products would raise profits for candlemakers – but as a needless expense for everyone else, it would lower disposable incomes and reduce productivity across the board (forcing even candlemakers to work in poorly lit conditions).
The same logic applies today if the president proceeds with plans to slap a 25-percent tariff on steel imports, along with a 10-percent tariff on aluminum imports. Above all, such duties would hurt a thousand or more people for every one they help – limiting choice and pushing up prices for most consumers, while imposing a significant burden on steel-dependent industries that employ 6.5 million people, or close to 50 times the number of U.S. steelworkers (140,000).
In the opening words of his essay, Bastiat paid mocking tribute to politicians opposed to free trade, saying:
Gentlemen: You are on the right track. You reject abstract theories and have little regard for abundance and low prices. You concern yourselves mainly with the fate of the producer. You wish to free him from foreign competition, that is, to reserve the domestic market for domestic industry.
Free markets and free trade come down to the same thing: voluntary exchange for mutual benefit. It makes no difference whether that happens within a country or across national borders. In the absence of job- and growth-destroying government coercion, the buyer or consumer holds the upper hand. In a competitive marketplace, unless buyers agree to part with some of their money for someone else’s product, there is no trade and there are no transactions.
With his recent tweet, President Trump seems not (or pretends not) to understand that basic idea. Let’s hope it is pretends.