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Cuuugi | 3 years ago

"What works is a free market. Raise import costs on CPUs and you’ll incentivize building in the US and more companies to form."

Is the market really free with tariffs?

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lettergram|3 years ago

Yes it is, there’s always been taxes. Free market typically refers to regulations, free commerce (means ability to buy and sell), etc. that doesn’t mean no taxes, particularly tariffs.

The US federal government was initially only able to make revenue from tariffs. Basically you control the borders, but inside the borders there are no control (ie free market). Once you deal between nations, you cannot have a perfectly free market, else your enemies will eat you. Which imo is what happened the last 50 years.

Dracophoenix|3 years ago

A tariff is a regulation. Tariffs are the interstate commercial equivalent of Pigovian taxes. When the government puts its thumb on the scale of what should or shouldn't be sold with an extra cost attached, that is not a free market.

Ajedi32|3 years ago

Obviously it's less free with tariffs than it would be without, but given the goals of the bill some level of interference is unavoidable. The question is whether to meet those goals with top-down central planning, or by tweaking the incentives and letting the market handle the details on its own. The latter is much more in keeping with free market principles than the former.

thomastjeffery|3 years ago

Could a market be free without tariffs? Does free not imply competitive?

US policy can't force South Korea or Taiwan to have a free market. No matter what we do, any domestic company has to be able to compete with Samsung and TSC. Because of that, there is no purely "free" global market.

Either you change the rules at the border (tariffs), you match your competitors' strategy (subsidize), or you lose.

chalst|3 years ago

No, lettergram is misusing the term 'free market'. Free marketeers don't just want less government enterprise, they also want lower tariffs and light regulation.

wbsss4412|3 years ago

It definitely isn’t, but at this point “free market” has been watered down so heavily it gets used improperly all the time.

It’s more of a political slogan than an actual policy.

LMYahooTFY|3 years ago

A "free market" isn't borderless. There's virtually no precedent for that.