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To: expat_panama; central_va; hedgetrimmer; apoliticalone; arrogantsob
""Because Smith did not exclude foreign trade, does not indicate that Smith favored wide open borders and 'free trade' as it exists today. Smith favored 'domestic industry and preferring the support of domestic to that of foreign industry..""

lol --Al, there're places where Smith's flat out pro-tariff for heaven sake, I've been waiting for you to post those ones!
Seriously, Smith had to be balanced because he was a 'real-life' person and not a political hack. He understood just like we do that sometimes tariffs are needed and sometimes they aren't. We also both know only a complete moron would think that there really are wide-open-border-traitors around on these threads.


LOL ... So as not to disappoint, here it goes about Smith and tariffs. Part 1 of 2 about The Never Ending Story. I have tried to cc those who might be interested in portions of this or the next post.

Adam Smith in the Wealth of Nations was for tariffs in the following situations:

1. When a nation to whom one exports, imposes a tariff on one’s exports. "The case in which it may sometimes be a matter of deliberation how far it is proper to continue the free importation of certain foreign goods, is when some foreign nation restrains, by high duties or prohibitions, the importation of some of our manufactures into their country. Revenge, in this case, naturally dictates retaliation, and that we should impose the like duties and prohibitions upon the importation of some or all of their manufactures into ours. Nations, accordingly, seldom fail to retaliate in this manner ... The recovery of a great foreign market will generally more than compensate the transitory inconveniency of paying dearer during a short time for some sorts of goods." [Book IV Chapter II]

2. When the industry is necessary for national defense. Smith uses the example of shipping.
"There seem, however, to be two cases, in which it will generally be advantageous to lay some burden upon foreign, for the encouragement of domestic industry.
The first is, when some particular sort of industry is necessary for the defence of the country. The defence of Great Britain, for example, depends very much upon the number of its sailors and shipping."[Chapter IV Book 2]

3. When domestic production is subject to an internal tax which makes it more difficult to sell domestic products compared to foreign products.
"The second case, in which it will generally be advantageous to lay some burden upon foreign for the encouragement of domestic industry, is when some tax is imposed at home upon the produce of the latter. In this case, it seems reasonable that an equal tax should be imposed upon the like produce of the former" [Chapter IV Book 2]

Smith also argued that when tariffs are repealed, it should be done slowly.
"Humanity may in this case require that the freedom of trade should be restored only by slow gradations, and with a good deal of reserve and circumspection. Were those high duties and prohibitions taken away all at once, cheaper foreign goods of the same kind might be poured so fast into the home market, as to deprive all at once many thousands of our people of their ordinary employment and means of subsistence. The disorder which this would occasion might no doubt be very considerable."[Book IV Chapter II]
410 posted on 06/11/2011 9:30:19 AM PDT by algernonpj (He who pays the piper . . .)
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To: algernonpj

Wow, my expectation of a great REVELATION and this is the best you can do?

1 While the typical expectation to impose a counter tariff appears to satisfy the goal of revenge, it has been shown that this actually costs the revenging nation more than just carrying on absorbing the other nation’s tariff. However, the economic response will be swamped by the political demand for retaliation.

2 I have mentioned the exception for national defense industries. This, however, is an overriding political response.

3 If there is an unjust or unnecessary domestic tax or regulation then free trade can be adjusted if the domestic interference cannot be removed.

4 Repealing tariffs over time appeals to my sense of justice and would be appropriate.


417 posted on 06/12/2011 9:26:51 PM PDT by arrogantsob
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