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This chapter is from the book

The Protection Racket

Any tariff or barrier to trade that is erected to shelter an industry that can't compete is actually a subsidy for that producer and a tax on the consumer. Protect a T-shirt maker in Tennessee (and all the other American T-shirt makers) from those cheap T-shirt makers in Indonesia, and suddenly every T-shirt in America is going to cost more. Same for cars and toasters and telephone answerers. So protecting one person, a business owner, or employee, by restricting the natural functioning of the Econosphere, takes away from every person who needs to buy that protected product because the price is going to go up.

But it gets worse. The impulse to try and fiddle with the incentives in the Econosphere (and go against its natural laws) causes the Econosphere to run less efficiently. Before long, with less competition, we get less output per worker, less per set of raw materials, and less per unit of time. On net, we all lose. Within that accounting, it is the consumer that gives up something to make the producer's life easier and less prone to change or stress. But who is looking out for the consumer? What did the consumer do to warrant having to bear such a cost? And let's not forget: We are all producers and consumers. Even the subsidized producer faces higher prices in the end result!

Over time, there are few one-for-one tradeoffs because lost efficiency in one area of the Econosphere hurts the entire ecosystem. Moreover, because we each put our individual finite energy into the Econosphere, the output that springs forth from the economy depends on us. We are not taking wealth from each other; all of us are the fountain from which the value springs. It might look as if some of us get wealthy on the backs of others sometimes, but the underlying truth is often obscured by the passions of the moment.

Feel like it's time for another law? You're right!

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