Comment: You CAN make a pro tariff argument from an Austrian perspective

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You CAN make a pro tariff argument from an Austrian perspective

I'm sure this will get down voted by skimmers who won't bother to read it.

Free Trade arguments go back to David Ricardo's concept of Comparative Advantage. The theory postulates that, given certain assumptions, the prosperity of a nation's people will be increased by free trade.

The catch is in the assumptions. The benefits of Comparative Advantage assume FIXED CAPITAL, meaning the non-labor means of production cannot leave the country.

This simply is not the case. Without FIXED CAPITAL, factories, technology, and IP will migrate towards the lowest labor cost (ceteris paribus). That is what we are witnessing in America as our factories "migrate" from Cleveland to Beijing.

Both Rothbard and Mises acknowledge this. Mises outlines the assumptions of Comparative Advantage in Human Action. Rothbard, when presented with this argument responded by saying the migration of capital is "inevitable". They make a purely, utilitarian defense of free trade with no consideration for nationalism. Ultimately, countries will be impoverished by free trade as their capital is stripped off.


You can make an argument against free trade, but it has to be made on "nationalistic" grounds. You have to argue that, in order to preserve capitalism or individualism or classical liberalism or something, capital must be prevented from migrating to collectivist or feudal nation states.

It's a philosophical and ideological argument that can be made without violating the immutable laws of economics.