re: Let's suppose Trump is right. All countries come to the table...

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Can a country use tariffs and trade restrictions to "benefit more" or "take advantage of" or "win" in trade with another country? Use whatever terminology that makes you feel best.

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The same thing has been true over the years of the continuous argument by the oil interests that we ought to have, at one point, an oil import quota, or percentage depletion, or all sorts of other things on national security grounds. I believe that is an excuse and not a reason.

What about the argument of unfair competition? What about the argument that the Japanese dump their goods below cost? As a consumer, all I can say is the more dumping the better. If the Japanese government is so ill-advised as to tax its taxpayers in order to send to us, at below cost, TV sets and other things, why should we as a nation refuse reverse foreign aid?

What about the problem of the price of the U.S. dollar, the weakening of the dollar abroad? It is an artificial problem to which we should pay no attention. The market will set a price, let it. So far as we as a nation are concerned, the important thing is to get our internal house in order. If we followed policies at home which would eliminate inflation, and provide the basis for sound and healthy economic growth, the price of the dollar in foreign exchange markets would take care of itself. If we follow policies as we have been that produce a steadily rising inflation, or unsteadily rising inflation, I should say, ups and downs, well then, of course, the dollar is going to become worth less at home and it will be worth less abroad than it otherwise would be.

I come again to the problem of farm policy here, agricultural policy. That is an area which has been very intimately related to foreign trade. You will remember some years back when there was a great scandal about the extent to which the American taxpayers subsidized the Soviet Union by selling agricultural products at a price below the domestic price. I have already expressed the view that there is no national interest whatsoever in farm price supports or in government attempts to manipulate the price of farm products anymore than there is in government attempts to manipulate the price of steel, or of any other product. But it's much more fundamental than that. Agriculture is one of our major export industries. It is an area in which we have been incredibly efficient, in which we can produce goods and out compete almost everybody in the rest of the world. There is nothing that would be in the greater self-interest of the agricultural producer than for the U.S. to have complete free trade. That would generate a greater supply of dollars abroad to produce a better market for U.S. products.

I submit to you that the movement toward having farm price supports is a very shortsighted movement. What will be its results? It can only have the effect of either destroying export markets or requiring the government once again to subsidize exports. If we have a high artificial price at home, which is above the world price, nobody in the world is going to buy American products unless somebody or other sells these to them at the world price. Hence, a system of artificially high domestic agricultural prices necessarily requires a system of government subsidies for the export of wheat abroad.

I submit to you that that's not in the interest of the American consumer, it's not in the interest of the American taxpayer, and in the longer run it is not in the interest of the American farmer.

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I believe that the right policy for us would be to act like the great nation we are, to say we are not going to determine what we do on the basis of what Hong Kong and Korea and Japan do. We are a great nation and we are unilaterally and on our own going to move to remove every barrier to international trade. We are not going to do it overnight. People have made plans on the basis of existing tariffs. Let's take a five-year period, or a ten-year period, that's less important. But let's each year reduce by one-fifth every tariff barrier, eliminate every subsidy to exports by one-fifth, and over a five-year period get to a period at which we have no tariffs and no subsidies to exports. We should do that and we should also completely stay out of the market of foreign exchange. Your government on your behalf has been speculating in the foreign exchange markets for the past seven years and has cost you, up until last year and not counting the speculation of this year, $550 million of losses on those transactions. Money down the drain. Let's stop that.

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In the same way, the U.S. has been a great nation and we have prospered despite the tariffs and despite the restrictions on trade. But we could set a great example to the world and benefit the world as a whole, contribute not only to prosperity but to peace around the world, by moving in the direction of free trade. Because once again, go back to the British experience, the century of free trade was also the century of the greatest international peace. Why? Because if you eliminate government from these matters you enable individuals to deal with one another. If you introduce protection, tariffs, restrictions on trade, they become matters for government-to-government wrangling and they are an enormous source of division. So in the name of both prosperity and world peace there are few steps that we could take which would contribute more than a complete move toward free trade. Thank you.

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Sowell is alive to experience the, "barriers and switching costs that would make the market completely incapable of responding to market factors," as you originally stated, and still agrees with Friedman's point.

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So he's wrong, too, or are you arguing he doesn't understand "barriers and switching costs that would make the market completely incapable of responding to market factors." ?

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Everything in this chart was bullshite, mislabeled and incorrect. And Trump didnt know any better.

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I've read the critiques, they summarize to "we don't like it"

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I've read the critiques, they summarize to "we don't like it"

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Certainly not Europe or China.

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We forecast that China will be the world’s largest economy for only 21 years before the US overtakes again in 2057. And by 2081 India will have overtaken the US. How does this affect geopolitics?

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In a sense, being the world’s largest economy in dollar terms means little. China became the largest in purchasing power terms as long ago as 2017, based on IMF data, and there are no cups or gold medals for achieving first place. But the level of dollar GDP does give an indication of a country’s economic and potential military power, and of its international significance.

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Unfortunately, that's too abstract for a lot of people. And I don't say that to dig anyone. It's just a sad fact.

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In a sense, being the world’s largest economy in dollar terms means little.

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Correct

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I agree, but I am at a loss to actually explain that here.

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