Thursday, August 27, 2020

Paradox 2

There is another paradox we find with trade today - as we get fatter and more comfortable from the goods and services we enjoy practically tariff-free, we get more tolerant of the tariffs that remain even when they obviously make the item more expensive. The perfect example is dairy. Most of us are not dependent on the price of food precisely because of the Free Trade World we live in.

 We are more prosperous than ever and get more goods and services than ever often at no tariff because they literally aren't covered by the obsolete "Tariff rate schedules" that used to be so encyclopedic (e.g.: computers and cellphones). It seems a small price to pay to have dairy or poultry be more dear than  it should when your main budget problem is whether you can go to Disney World this year (where you will blissfully consume BGH dairy!). Patriotism and ferocious lobbying of our "statesmen" does the rest.

 Thus, the more benefit from free trade, the more likely we are to tolerate marginal protectionism. It's not fair or right, especially to those of us who live from one grocery bill to the next, but it explains (along with shall we say "low information" habits) why there appears to be absolutely no real political constituency to fight this even in the urban areas where you would think it would  be a natural cause (witness the absurd Lewis memo). What happened to Bernier certainly is used pour encourager les autres on the issue! Can a constituency be created and rallied to fight this? Of course. But it will need leadership and heft and I do not know where it will come from in a country where one of the reasons we ignore the issue is free trade has already made us too comfortable to worry.

That is why a more global approach is needed. The Supply Management system must be held up as just one of the many reasons we are not as prosperous as we should be. We are earning less than African Americans and as much as West Virginians. We are at least 33% behind the purchasing power of Ireland and the US. To get at and root out the last vestiges of tariff and non-tariff trade barriers like the Milk Laws (my favourite campaign moniker for them), we may have to use the "blind" of emphasizing the general theme that, whether it is because of regulation, tariff or monopoly, we are all making less money than we should and thus our quality of life and standard of living is being degraded (and has been in comparison to the US since at least the 1980's).

No comments:

Post a Comment