Tariffs
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This is a long history. The cutthroat competition in free naturally evolved markets always forced monarchs and tyrants to award special privileges to bypass the competition and establish a monopoly, which was never possible otherwise. This cronyism later got the name of mercantilism. The proposal of free markets and free borders in “The Wealth of Nations” was so revolutionary that Mercantilism was killed forever. The power of rulers and their cronies never gave up, though. Although Mercantilism died, the bottom line idea never disappeared and has stayed with us with different names, terminologies, and disguises. Fascism, Nazism, Socialism, Cronyism, Private-public partnerships, and tariffs are all the re-carnations of this deadbeat idea.
The historical fact is that the monopoly in free markets and open competition between billions of humans across artificially drawn borders is a completely, utterly, and logically impossible myth. Yet, monopolies have existed and still exist to some extent. The dilemma is how it happens then. The real problem is not money, just a medium of exchange, free markets, or competition. The real problem, as always, lies in coercive authority and its cronies, i.e., the government and crony corporations. By the way, corporations are not the product of Capitalism. These are products of corporate law and limited liability, designed, enacted, and enforced by governments.
So, they cannot bring back Mercantilism because it is so unanimously rejected. So, they dress it up, give it a beautiful name, invent deceptive terminologies, give it the disguise of public utility and benefit, bribe and enroll experts, gurus, academia, economists, and so-called financial experts, bring the big press and media into the loop by offering heavy incentives and throw it back on us, of course for our good. At the same time, the only actual purposes are always the extension of the government’s authority and control and the enrichment of cronies. Fascism, Socialism, Private-public partnerships, cronyism, and tariffs all have the same story, and all are just the new names for Mercantilism.
Capitalism makes the individual the only sovereign. The idea behind all these phony systems, which started with mercantilism, is the centralization of power and authority. Take it away from Lulus and give it to, I know it all, bureaucrats and cronies. In return, they scratch politicians’ backs, and all get good for the elite at the cost of average Joes and Marys. The real problem with Mercantilism and all its reincarnations is that all of these require a barrage of laws, rules, regulations, taxation, restrictions, and more of the same, all of which cost tons of money. It pushes back and down the truly creative, innovative, inventive, entrepreneurial, risk-taking, and hard-working people and forces.
The politicians, bureaucrats, media, gurus, experts, and academia all work together to sell the phony and crony while pushing back the truth, efficiency, quality, talent, skills, and outstanding qualifications. The whole system becomes a mess. Inflation takes over; production goes down, efficiency drops, investments fall, capital starts to move out, and living standards take a nose dive. Of course, in the mainstream, this is never the fault of bad policies, the true culprit. They always try to blame it on someone or something else. Greedy capitalists, environment, bad weather, foreign intervention, terrorists, enemies, etc, although the distinction is so sharp and distinct throughout history.
Every time there is regulation and restriction of trade, there is an economic disaster, poverty, unemployment, stagnation, hunger, and misery, and every time there is open trade and open borders, there is development, growth, creativity, productivity, efficiency, and higher standards of living, even between exactly same people. The examples are East and West Germany, former soviet states, North and South Korea, China vs. Hong Kong and Taiwan, and even at the same places at different times like China and India before and after market reforms and former Soviet states, Eastern Europe and even Russia itself, under socialism and restricted trade vs. after market reforms and open trade.
Above all, we have our history. America was unique because it was the first continent built from the bottom up. The whole continent started almost in complete anarchy. It did better than any other place ever in the entire human history. Within a blink of an eye, i.e., two hundred years, it became the most prominent and most prosperous economy ever. It built the most significant and affluent middle class and had the fastest drop in poverty rates ever. Then, at the beginning of the twentieth century, we, along with Canada, Mexico, Europe, Australia, and the Asian developed economies, started behaving like spoiled rich kids. We started thinking that everything is given, and precious American values like leave me alone, freedom, creativity, innovation, invention, and entrepreneurship were beginning to be taken for granted.
Precious values like competition, merit, skills, qualifications, knowledge, and greed were demonized. Completely baseless, ridiculous, unproven, ever-failed, unrealistic, and unnatural things like DEI, equality of outcomes, cronyism, regulations, taxes, and laws became holy. Americans who believed that truth never comes from authority started considering its propaganda as the last word. The dead weight of the government kept increasing. The stock of productivity, productive people, and businesses, the real wealth generators, kept shrinking. Laziness was labeled as “Unfortunate”. Redistribution of wealth took to new heights. Work was primarily disincentivized.
The three-lettered agencies kept popping up. This gave rise to the complete control of phony experts and technocrats over society. Agencies like the FCC killed the competition in media and handed over the incredible and ever-increasing power of media to six corporations. Healthcare has become one of the most regulated industries. Almost nothing was possible now without going through the predominantly red tape of bureaucratic approvals and licensing. So-called professionals, hospitals, pharmaceuticals, food companies, medical associations, and unions, none of them could even imagine working without getting a license or approval from bureaucrats. These extensive regulations made healthcare incredibly expensive by cutting down the smaller competition and handing more and more power to large and monopolistic corporations. Now, one idiot at the helm of affairs in a three-letter agency can paralyze the economy of the whole world.
