Where the Guns are Aimed
8 November 2007
Editor, The Washington Times
To the Editor:
Alluding, as you correctly report, "to the possibility of economic retaliation by European states stung by the falling dollar," French president Nicolas Sarkozy yesterday warned of "economic war" ("China signals dollar swap," November 8).
Higher tariffs are indeed hateful and harmful. But do keep in mind an important difference between real shoot'-em-up wars and "economic wars": in "economic wars," each belligerent government aims its weapons only at its own citizens, demanding that they avoid taking advantage of good economic deals offered by foreigners. Put differently, in "economic wars," when the government of A attacks citizens of A, the government of B "retaliates" by attacking citizens of B. Then to further punish B, the government of A increases the scale of its attack on citizens of A. And so it perversely goes.
Sincerely,
Donald J. Boudreaux
Chairman, Department of Economics
George Mason University
Editor, The Washington Times
To the Editor:
Alluding, as you correctly report, "to the possibility of economic retaliation by European states stung by the falling dollar," French president Nicolas Sarkozy yesterday warned of "economic war" ("China signals dollar swap," November 8).
Higher tariffs are indeed hateful and harmful. But do keep in mind an important difference between real shoot'-em-up wars and "economic wars": in "economic wars," each belligerent government aims its weapons only at its own citizens, demanding that they avoid taking advantage of good economic deals offered by foreigners. Put differently, in "economic wars," when the government of A attacks citizens of A, the government of B "retaliates" by attacking citizens of B. Then to further punish B, the government of A increases the scale of its attack on citizens of A. And so it perversely goes.
Sincerely,
Donald J. Boudreaux
Chairman, Department of Economics
George Mason University
Posted by Don Boudreaux on
Sunday April 27, 2008 at 2:32pm