Cristina Fernández de Kirchner is one of the world’s worst leaders. Poor Argentina, they are stuck with a leader who wants to adopt what I call “Cher Trade Policy” — namely that she wants to “turn back time.”
Buy American activists, protectionists and “fair traders” should take note: Argentina’s recent policies are where your ideas (if implemented) will take us. (I lump these three different groups together, I know, but they each are pushing for some degree of the same evil — opposition to free trade.)
Bloomberg Businessweek reports:
Since February, consumers and businesses in Argentina have found it increasingly hard to find various imported items—electrical equipment, certain prescription drugs, machinery parts, bananas, and salmon.
This cut-imports-at-all-costs campaign has triggered a backlash. The government announced in late March that all foreign publications entering Argentina would be held at Ezeiza International Airport outside Buenos Aires. The topic hashtag #LiberenLosLibros (“free the books”) was widely used on Twitter.
When governments impose barriers to free trade, they pick winners and losers. The winners are the domestic producers, the losers are producers who use related inputs, and consumers.
Seeing how the winner benefits is easy, but seeing how the loser suffers is often harder. It’s hard to see how bad trade policies can snuff out employment and economic activity in related industries, even though those losses are very real. Sadly, media coverage rarely talks about how anti-free trade actions can cause other people to lose their jobs, often eight times the amount of jobs supposedly saved. Consumers usually don’t know what the trade laws are, and rarely understand how bad trade policy hurts them.
Argentina provides an excellent case study that academics and liberal anti-free traders should pay particular attention to. When people think of protecting domestic industry, they think of things like cars and steel, rarely agricultural products and books.
Remember, a government big enough to give you what you want can take other things you like away. You can’t push for bad trade policies that don’t directly impact you, and then complain when they later do something you don’t like. Either you support government interfering in the trade of private individuals, or you don’t. (I’m in the latter camp.)
And if you think government officials are good at practicing what they preach, think again. Pay attention to this twitter quote from Argentinian Vice President Amado Boudou.
From his iPhone, he writes: “We are not against imports, we are looking after your jobs, we are looking after Argentine industry.”
Bloomberg notes the palpable irony:
Readers noticed that Twitter had registered the vice president as posting from an iPhone. Yet the government prohibits the sale of the Apple smartphone within its borders. The screen shot of the ironic tweet went viral. Should Argentines want an iPhone, as Boudou told reporters earlier, they’ll have to buy it in Miami.
Americans should take note: Anti-free trade advocates will sell you on nice-sounding mercantilist platitudes and false promises of prosperity. But if we enact what they are really pushing, we end up in a place where you have to go to another country to buy an iPhone, and have shortages of electrical equipment, some prescription drugs, machinery parts, bananas, and salmon.
How is that in any of our interests? It’s not. Argentina’s woes are very real, and worst of all, they were easily preventable. If we don’t push back against the luddites, protectionists, and economic malfeasants pushing stupid policies, your next iPhone might come from a trip you made to Ontario.