Arnold Kling  

Agricultural Trade Barriers

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Paul J. Gessig makes the case for dismantling U.S. agricultural subsidies.


According to Organization for Economic Coordination and Development (OECD) data and calculations from Dan Griswold of the Cato Institute, completely eliminating the current web of subsidies and tariffs would provide the economic equivalent of an immediate $18 billion per-year tax cut for American consumers. As if to answer critics of most tax-cut plans, ending agriculture subsidies would also reduce the budget deficit by another $20 billion each year (the current annual federal subsidy level).

For Discussion. When it comes to trade wars, economists tend to favor unilateral disarmament--abolishing tariffs and subsidies regardless of what other countries do. Why instead is trade dealt with through bilateral or multilateral negotiations?


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CATEGORIES: Trade Barriers



COMMENTS (3 to date)
Kimon writes:

With "unilateral disarmament", special interest groups that compete with new imports are disadvantaged and complain, while special interest groups that would export do not gain any benefits and shut up. The majority of people get a tiny benefit and also shut up.
Thus, there is a significant overall political cost to whomever would promote such a policy. Politicians tend to shy away from this.

Joe Grossberg writes:

Because economists don't spend millions on lobbying and campaign contributions; uncompetitive and inefficient domestic industries do.

David Thomson writes:

"Because economists don't spend millions on lobbying and campaign contributions; uncompetitive and inefficient domestic industries do."

Agreed. There's no sense in overcomplicating the obvious. The special interests can dictate policy because our system makes it exceedingly difficult for the common person to take them to task. The latter is compelled to act altruistically against those who are often well compensated for their efforts. Am I therefore advocating for the per se system to be substantially changed? Nope, I’m afraid that we will likely not improve very much upon our present form of government. The real only answer is for all of us to cease being hypocrites! We must inform our elected officials that their primary job is not bringing home the most bacon to our respective districts.

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