International trade, tariffs, comparative advantage… and Smoot-Hawley put the wood to the U.S.

Posted: April 22, 2014 in Uncategorized

The LAF Sowellians today broached international trade.  We learned why it’s good for both sides… and why, perversely, governments expend so much energy trying to restrict it.

Smoot and Hawley: tons of tariffs and heartache

Smoot and Hawley: tons of tariffs and heartache

The fundamentals of international trade are easy to grasp, owing to our deep knowledge of zero-sum thinking and basic economics.  It’s in the details when things get interesting.

Despite myriad examples of nations benefiting from free international trade, efforts continue to this day, around the globe, to clamp down on it.  We studied the three advantages — absolute, comparative and economies-of-scale  —  that enable countries of all sizes and stages of development to trade with each other and each gain wealth.

We also deflated a number of fallacies regarding international trade including dumping, the “need”  for tariffs, protecting infant industries, and import quotas.

Here’s the PPT from today.  Week 15, April 22    Good luck preparing for the mini-MOAT.  Two classes to go!


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