Just a couple of follow-ups to my post yesterday praising Ian Fletcher’s book Free Trade Doesn’t Work.

I hope I didn’t leave the impression that the book is dogmatically hostile to free trade, without qualification. If anything, it is dogmatically hostile to dogma, arguing that unyielding adherence to dogma — in this case, the dogma of absolutely free trade — is the enemy of sound economic policy. I agree that the title doesn’t convey that; but book titles are meant to catch your eye, not make an argument. A book titled Liberal Fascism is not supposed to get you thinking all liberals are fascists; a book titled We Are Doomed is not an invitation to retire to your chambers with a bottle of scotch and a loaded revolver.

Fletcher’s arguments are thoughtful and data-rich. He is not an uncritical fan of tariffs, for instance. The relevant chapter argues that tariffs need to be politics-proof as far as possible, or else they just degenerate into industrial favoritism, well-connected players diddling the tariff system for their own advantage. There has actually been quite a lot of that under the supposedly free-trade policies of the last five presidents; Fletcher deplores it.

We need a broad-based policy that can survive imperfect implementation and political meddling, a certain amount of which will be inevitable. We do not need an intricate, brittle, difficult policy that will only create work for bureaucrats, lawyers, and lobbyists. Among other things, any policy too complex for the public to understand will be beyond the reach of democratic accountability, the only ultimate guarantee that any tariff policy will remain aimed at the public good.

Whether the American political system as currently structured can deliver any policy on anything that is not just a jobs program for “bureaucrats, lawyers, and lobbyists” is of course an open question; but that’s a problem in political science, not economics.

Talk of a tariff of course summons up happy, misty memories of the Old Right. A reader supplies relevant texts.

My observation of protectionism is that it has been successful in practice, however unsound it may appear to be in theory. That must mean the theories have not taken account of all the facts.
— Calvin Coolidge, quoted in The Quiet President, p. 103
For over a generation each protective tariff has changed the basis but enlarged the market for imports. Of course, some lines may have been injured and others compelled to come in on a rate more fair to the United States standards of wages and living. That is not saying the new tariffs promoted or retarded the increases. But the fact is higher rates did not decrease the former imports. The most reasonable explanation seems to be that protection encouraged business and a more prosperous people bought more goods abroad. Instead of being disturbed at the tariff foreign nations should know that our general imports will be large so long as our business is good.
— Calvin Coolidge Says, July 11, 1930
A very bad tariff would be better than constant agitation, uncertainty, foreign animosity and change. … Hope for a purely scientific tariff will prove a delusion. Any prolonged investigations, covering many schedules for the purpose of rewriting the law, will do more harm than good. Many will be injured while none will be satisfied. And the country will not be benefited.
— Calvin Coolidge Says, September 10, 1930
We wish to protect our own wage earners, our agriculture and industry from the results of dumping produce on our markets at a price with which they could not compete. But the policy has a deeper significance than that. We are unwilling to profit by the distress of foreign people. We do not want their blood money. Our efforts are not only to protect our own people from cheap goods, which President McKinley said meant cheap men, but we propose to set up a standard that will discourage other nations from exploiting their people by producing cheap goods. Our policy requires fair wages for both domestic and foreign production. We have no market for blood and tears.
— Calvin Coolidge Says November 26, 1930

Fletcher’s tariff argument incidentally leads into a discussion of VAT, leaving me thinking what I am always left thinking on that topic: If I were starting an economy from scratch, VAT without income tax would be a pretty good idea, but you can’t get there from here. And as Fletcher says:

Although this is a well-tried system of taxation, it is generally regarded in this country as a strange European affectation, which probably dooms its rational consideration.

Okay, now I have to head up to our lavishly equipped state-of-the-art sound studio on the 95th floor to record this week’s Radio Derb. I don’t want to keep our highly paid staff of sound engineers and production assistants sitting round in idleness. Onward and upward!