Not a Zero-Sum Game - Ludwig von Mises Institute

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Appendix II The Freeman: Ideas on Liberty, September 2002 Vol. 52, no. 9 With permission from the Foundation for Economic Education Underdeveloping Indiana By Manuel F. Ayau Cordon The people of the 50 states of the United States (5 percent of the world's population) produce 23.3 percent of the world's gross prod- uct of goods and services. Think of the United States as a world in itself, composed of 50 countries with open borders and no restrictions on trade between them. In this world, no limits exist on immigration, enabling people to vote with their feet. There is also considerable diversity in the laws among the states because most legislation is not "harmonized." Now let us imagine what it would mean to Indiana if it adopted the trade policies common to most underdeveloped countries. Imagine that Indiana established tariffs and other trade restrictions to provide a new source of revenue, protect local industry (princi-
NOT A ZERO-SUM GAME pally steel and autos)-as well as its agriculture-from competition by other states, attract more industries to create jobs, and make sure that Indiana does not have a negative balance of trade. The first step would be for the government to purchase the required real estate on its periphery to build customhouses where all high- ways and rail lines enter Indiana from Michigan, Ohio, Kentucky, and Illinois, as well as at ports on Lake Michigan. And don't for- get the airports where flights from other states come in. Look at a map in order to appreciate the extent of the task. Indi- ana would have to build warehouses at train sidings, roads, airports, and ports to unload, inspect, and reload imported goods from the other states. Then it would have to staff these facilities with customs inspectors to apply the proper tariffs established in its newly created Customs Code. A Bureau of Customs would have to be staffed with personnel adequately trained and prepared for the required tasks; they would have to be specially screened and supervised to avoid bribery and smuggling from other states. The new bureaucrats would naturally have to come from previously productive occupations-and their products be forgone. Given the present demand for goods, the new additional handling and production costs could not simply be passed on to the con- sumer, so marginal production would be abandoned. Thus, thanks to the diminished supply of goods and the diminished competition from out of state in the market for raw materials and industrial supplies, prices would rise. Real wages would thus be correspond- ingly lowered.
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I I E ~ nn E i~ hn $hat f!ze Laao n
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A short version of this essay, enti
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Acknowledgments Many thanks for the
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NOT A ZERO-SUM GAME Table of Conten
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Foreword by Donald Boudreaux THE PA
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Foreword by Roger Miller THE PARADO
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THE PARADOX OF EXCHANGE Law and Eco
Page 21 and 22: NOT A ZERO-SUM GAME specialization.
Page 23 and 24: NOT A ZERO-SUM GAME Sir William Bla
Page 25 and 26: NOT A ZERO-SUM GAME It is not clear
Page 27 and 28: NOT A ZERO-SUM GAME the game is ove
Page 29 and 30: NOT A ZERO-SUM GAME increase produc
Page 31 and 32: NOT A ZERO-SUM GAME why it behooves
Page 33 and 34: NOT A ZERO-SUM GAME We will measure
Page 35 and 36: NOT A ZERO-SUM GAME Obviously, when
Page 37 and 38: NOT A ZERO-SUM GAME managerial abil
Page 39 and 40: NOT A ZERO-SUM GAME It is true that
Page 41 and 42: k %&> Trade as a Distributor of Wea
Page 43 and 44: NOT A ZERO-SUM GAME up getting stuc
Page 45 and 46: NOT A ZERO-SUM GAME Only competitor
Page 48 and 49: Epilogue Property Rights Matter In
Page 50 and 51: Foreign Exchange Comments on Trade
Page 52 and 53: different in each place. Although t
Page 54 and 55: PART 11 COMMENTS ON TRADE BETWEEN "
Page 56 and 57: PART 11 COMMENTS ON TRADE BETWEEN "
Page 58 and 59: Now suppose that the government of
Page 60 and 61: This is only possible politically b
Page 62: PART 11 COMMENTS ON TRADE BETWEEN "
Page 65 and 66: NOT A ZERO-SUM GAME tially the case
Page 67 and 68: NOT A ZERO-SUM GAME While far from
Page 69 and 70: NOT A ZERO-SUM GAME injurious U.S.
Page 71: NOT A ZERO-SUM GAME Free trade mean
Page 75 and 76: NOT A ZERO-SUM GAME As the delinque
Page 78: Selected Bibliography Basti-at, Frk
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