Free markets are certainly a worthy ideal, but politicians always seem to get in the way.
Read more 250 Years of American Musical Heritage
In the front of the line are tariffs. There are three reasons for a tariff. First is revenue generation. This is the most reasonable excuse, because governments always need money, and levying a duty on foreign commerce entering your realm does the job. The second group is known as “protectionist” tariffs. Emerging economies have at least some justification for stimulating internal economic development by artificially making domestically produced products more price-competitive for their own consumer base. In last place, are punitive tariffs, intended to reduce access to a nation’s market for a perceived enemy.
Consumers are the primary victim of the imposition of tariffs. This has often inspired a special kind of entrepreneur: the unlicensed importer, also known by the vulgar term smuggler. As we approach the 250th anniversary of the Declaration of Independence, it is of particular significance to point out that the producer of the most conspicuous signature on that document, John Hancock, was engaged in such pursuits. Evidence for such is that he was the wealthiest fellow in all of New England, yet he had no legitimate source of income. He was not alone in his occupation.
Preparatory to the revolution, hostility to tariffs imposed by the British colonial authorities induced the Bostonians to elect Sam Adams as their local tax collector, succeeding Mr. Hancock in that position. With the adoption of the U.S. Constitution and the actual formation of the United States in 1787, Article I, Section 9 forbade the states from charging tariffs — thus ensuring the free flow of commerce within the nation’s borders.
The recent hysteria being generated by the hoax of climate change has provoked a plethora of economic artificiality. In order to get people to purchase and install economically unfeasible solar panels and drive seriously expensive electric vehicles, subsidies had to be imposed. As with most taxpayer-funded subsidies, the money eventually ran out, and the “market-driven” demand for the formerly subsidized items dried up. Whoever coined the phrase “virtue-signaling” deserves a Nobel Prize — at least for something.
Literally billions are still being squandered on the myth of curbside recycling. Enormous fuel-burning trucks redundantly prowl around our neighborhoods just to pick up mostly worthless trash, since the local scroungers have already helped themselves from the available bins for anything that could possibly be worth something. Other than aluminum cans, all other “value” in this trash is because of artificial point-of-sale redeemable surcharges (AKA bottle deposits). Again, since most of this stuff is trash, it will soon be joining its kinfolk in the waste dump anyhow, though at artificially increased expense.
Read more A Flag Worth Defending
This brings us to the epitome of artificial economics: the minimum wage. Talk about authoritarian government screwing with a marketplace. Suffice it to say that, just like non-human commodities, there is a marketplace for labor — you know, the same old supply and demand, complete with its effect on price.
Thomas Sowell once wrote that minimum wage is the progeny of organized labor. Why? They were trying to keep as few black folks as possible from entering the workforce, since black folks were particularly willing to work for less money than white folks. By artificially raising the effective minimum wage, they became less appealing to employers than they used to be.
This has been done to all forms of entry-level workers. Employers hire workers in order to improve the profitability of their company. Entering the workforce for the first time requires working cheaply so one can acquire the necessary skills to make one’s time more valuable. Over time, experience accrues to the new entrants, and their value and thus their compensation as employees increase.
The underpinning of economics is reality. Imposing artificiality on such a natural system perverts its function — and leads, oftentimes, to dysfunction. Go figure.
Read more Our War against Iran Makes Sense
Image via Pixabay. Pixabay License.