In ancient Rome they called it Portorium. As goods poured in and out of Rome a tax was put on the importation of foreign products. Around the time of the American Revolution there were only two sources of government revenue:
- Taxes on booze
- Import duties (tariffs).
This was essentially true right up to the 20th century when we made income taxes permanent. Everyone for millennia have plainly understood a simple truth: One should favor the products made by your neighbor over those produced by someone outside your community or country. I need my neighbor to prosper so he can buy my stuff and I want him to pay taxes towards the school that our children attend and the roads we both use. If he’s gainfully employed, then I don’t need to worry about him having to borrow from me or rob me at the local Seven Eleven.
It’s true – that makes me a bad citizen of the world but I assume that they’ll all act the same way. Take a look at local Mexican or Chinese policies and you’ll see a huge structural preference for locally made goods, There have been quid pro quo tariffs on all goods traded throughout the world forever until two things changed:
- Economists started to argue that we would be richer if we screwed our neighbors and bought stuff from people on the other side of the world (even if they never buy anything we produce).
- People started to desperately seek any savings they could get so they abandoned their preference for local products.
- Companies stopped worrying about how their ex-employees would be able to buy anything after they fired them en masse. They became the government’s problem. A short term earnings gain matters far more than weak sales far into the future.
Brexit is about to put England back into a position that previous generations would recognize well. Mercedes cars will cost more and domestically made textiles and food will become more competitive. France thinks this is hilarious – Mon Dieu! How backward! France has bought into the idea that massive German and Chinese imports are marvelous and perpetual economic stagnation – no problem. France had a trade balance in 2001 – now it has an 85bn Euro deficit.
Yes I know all those theoretical economists will say there will be huge costs to not getting oceans of cheap junk from China but apparently they haven’t been following the British current account:
Mon Dieu! One could argue that a drastic measure like Brexit was necessary to save Englishman from their import crazed insanity. All those well to do bankers who must now decamp seemed to be good at only buying foreign goods and going on holiday anywhere but in the UK.
“Free” trade is so profoundly un-free that the USA, like the UK , has become a dumping ground for luxurious Audi’s and tons and tons of Chinese steel. Sadly it’s the biggest economic issue of our day and the message deliverer is a moronic narcissist. The first half of the debate was won by Trump because every sane person sees the logic in his argument. Hillary is and should be embarrassed by the position of her party on this issue. That’s how she acted on stage. It wasn’t until we got into Donald’s crazy tax plan and his record of hypocrisy and racism that Hillary took over.
I can only hope that the sting she felt at the beginning made enough of an impact that it affects her policies when she becomes President.