Source: Ludwig von Mises Institute
by Allen Gindler
“The Austrian School of economics advocates for minimal government intervention in markets, promotes free trade, and supports individual liberty. Austrian economists view tariffs as detrimental to the natural efficiency of the market, because they distort price signals and lead to the misallocation of resources. Murray Rothbard explained that ‘Tariffs injure the consumer with the ‘protected’ area, who are prevented from purchasing from more efficient competitors at a lower price.’ The Austrian critique of tariffs is heavily rooted in the concept of comparative advantage, which argues that countries should specialize in producing goods where they are relatively more efficient. Even if a country is more efficient at producing all goods than another country, both can still benefit from trade if each specializes in goods for which it has a comparative advantage.” (11/30/24)