Free Trade vs. Protectionism

Don Boudreaux hits it out of the park in this video.

He brings up an important question that free-trade skeptics need to answer: if international trade barriers create wealth, why stop there? Every state should have its own trade barriers against every other state.

Heck, intercity trade should have barriers, too. Imagine how wealthy we would be if San Diego placed tariffs on all goods from Los Angeles! Barriers to inter-household trade within the same city could have even more profound effects.

The economic logic is exactly the same in all those cases. Protectionism’s greatest failing is that it does not recognize that fact. It is astounding that many people see nothing inconsistent in favoring restrictions at one level, but not the others.