Humans always act in groups. Indeed, I would argue that it has made us stronger. Specialization and trade allow teams to accomplish things that individuals cannot accomplish. Economists since Adam Smith have emphasized the need for group effort to produce even simple things such as woolen coats, pencils, and bread. Indeed, liberals have long celebrated the ability of people to cooperate without explicit coordination.
However, these aggregates are sometimes mixed. It is often argued that what is good for one group is also good for another group. Or perhaps there is some overarching group that includes all other groups. Again, it is argued that what is good for the overarching group is good for all parts of that group. This is especially seen in international trade, especially protectionism. Protectionism is rife with this fallacy of composition, especially the national defense justification for tariffs.
I’ve written a lot about the defense justification for tariffs. The 2018 article I posted here at Econlog remains one of my favorites. I’m working with Don Boudreau on a book on international trade that extends national defense legitimacy. The essential idea is that there are goods necessary for national defense, and procuring them from foreign countries has a high risk of causing confusion, so if we want to develop domestic industry, tariffs are necessary. be.
But theory often diverges from reality, and there is growing evidence that defense tariffs actually weaken national defense capabilities (see, for example, Colin Grabow and Inu Manak’s The Case Against the Jones Act and Mancur Olson’s (See “The Economics of Wartime Scarcity”).
However, confusion about the group remains in the discussion of tariffs on munitions, at least how it is currently deployed. Assume that the defense tariff is:
Necessary and easy to target Less prone to rent-seeking, political manipulation, and other forms of corruption
That is, let’s assume that the defense tariffs work perfectly as intended. But logic does not dictate that these defense tariffs are the best or even good way to achieve their intended goals. Recall that tariffs apply to all users using a particular input, not just one user. For example, companies that use microchips in their products must pay a higher price for that input.
The defense tariffs are justified on the grounds that “we” want domestic financial resources. But that’s not the case. The government wants that. But most of us don’t. If only one group needs it, why force others to pay higher prices?The government can buy from domestic suppliers. There is no need to force others to do the same.
In other words, we do not think of the “United States of America” as a single collective entity fully represented by the aspirations and aspirations of the federal government, but rather as a collection of disparate groups, each with their own aspirations and aspirations. need to think. desire and their own agency. The federal government does not represent the American people. A unique company with a specific purpose. We may carry out our duties as we see fit. However, what is desirable for the government is not necessarily desirable for the people living under the government (and vice versa).
There are many problems with collectivist ideology. One of the biggest is that they ignore the complexities of society by subsuming everything under one big umbrella and having the same relationship with government. This leads to many disastrous policy mistakes, such as protectionism.
John Murphy is an assistant professor of economics at Nicholls State University.
