Tariffs: Another Word for State Theft

Libertarians and Classical Liberals oppose tariffs as an interference in Free Trade. The British Liberal Party in the 19th Century firmly agitated against tariffs as do modern Libertarians.

But tariffs are actually just plain old theft. And that theft is conducted by “The State”, whatever the name of the country or the ruling party in that country happens to be. In essence it is the State interfering in the Free Market and extorting Capital from Capitalists to enrich the coffers of the State instead of the coffers of the Traders. This is an evil and pernicious activity.

There has always been an opposition between the Free Market Capitalists and the State looters, who extort money from the Capitalists by assaulting them through taxes, tariffs, and excise taxes (although the excise tax, especially on pernicious products like tobacco, is the least immoral of all taxes, and was used to fund the fledgling American Republic prior to the immoral income tax). The justification for tariffs is always to “protect” certain favored home country industries in a process not unlike the Mercantilists of the various European monarchies of the past. Monarchs would sell “monopolies” to favored nobles and bureaucrats who formed themselves into “Companies”. The modern day Statists do the same thing by putting tariffs on products to protect their favored client industries which are akin to those mercantilist companies under the monarchies. As you may recall, the American Colonists had some division of opinion with King George over this matter, which caused quite a ruction.

However, what happens when one country imposes tariffs on trade with the U.S., but the U.S. charges no tariffs on its own products? Is that not one way theft? And if tariffs are sauce for the socialist-country geese, are they not also sauce for the Free Market-country ganders that do not charge tariffs?

It sounds like the retaliatory tariffs that President Trump is throwing at various socialist and totalitarian countries are really a matter of saying, if you’re going to ream us, financially-speaking, we’ll ream you back in like fashion.

However, tariffs, whether they’re put on as mercantilist looting mechanisms for the State and their client industries to legally rob the Consumer, or whether they are put on in response to other countries current tariffs, always hurt the consumer. As Rothbard pointed out, it is the size of bank balances held in a country that is the important item. That is, if I can buy a manhole cover from the U.S. for $125 or a manhole cover from India for $50, it is better for the U.S. nation as a whole if I buy the Indian cover and keep the extra $75 in the bank, where it is loaned out to buy capital equipment that increases productivity, rather than if I pay the $125, have a smaller bank balance, and the extra $75 goes to the wealthy owners of the “protected by tariff” U.S. manhole-cover manufacturers’ cartel.

Tariffs strengthen the Leviathan State and weaken the Consumer and the individual Capitalist. Free Trade Capitalism weakens the Leviathan State and enriches the Consumer and the Free Market Capitalist.

That said, tariffs as a form of punitive punishment for the Crimes of Totalitarian Regimes are, to me, no sin. If a country abuses the inalienable Jeffersonian Rights that are germane to any modern democratic Republic or democracy, then I will not object to tariffs on that country’s products and industries. Fascists should not be tolerated in the modern world. Their regimes should be overthrown and undermined by every non-violent means available.

The ultimate solution is for all nations on Earth to abandon tariffs completely, so that any nation that did try to impose tariffs would be viewed by the rest of the world as a looting moral pariah, little different from a gang of highwaymen.

Our first motto should be, “No democratic-elections Republic or Constitutional Monarchy, no trade.”

Our second, “What is sauce for the goose is sauce for the gander.”

— Paul Grad, Libertarian Party of Oregon Gubernatorial Nomineee 2014

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