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No Justification for Trade Retaliation

Economist Donald Boudreaux has this article on trade retaliation being unjustified and unjust. Here is an excerpt:

Do producers really have rights — property entitlements — to at least some minimum volume of consumer demand for their outputs? The answer given by Anglo-American common law has long been a clear no.  Under this law, economic competition is neither tortious nor criminal. Indeed, far from being wrong for producer Smith to lower his prices or to improve his product quality in ways that result in economic losses for producer Jones, such competitive actions by producer Smith are positively praiseworthy.

Examined from the perspective of consumers, under the law consumers are free to spend their incomes as they choose, and to change how they spend their incomes. And while businesses are free to offer for sale new goods and services, and to make their existing product offerings more attractive to consumers, businesses are not presumed to be entitled to any minimum volume of consumer demand.

Quite the contrary. The recognition is widespread that each and every business is always at risk of not succeeding, of losing sales, and even of going bankrupt. Implied in this recognition is the absence of any obligation on the part of consumers to spend their money in ways that improve or protect the economic well-being of particular producers.

Dr. Boudreaux makes a very good case for consumer sovereignty.

Contrary to Donald Trump and his government-control-obsessed anti-market trade restrictions, the free market provides the best conditions for a higher standard of living.

Published inUncategorized