One issue that has arisen in this campaign is the issue of "energy independence." Both McCain and Obama believe that moving towards energy independence is a good idea. But, as I pointed out in this month's The Freeman, it's not. Energy independence is no more desirable than coffee independence, banana independence, or car independence. The case for free trade does not break down just because the good being exchanged is important, as oil is. It doesn't generally make sense, if your goal is the wellbeing of country A's citizens, for country A's government to impose tariffs or import quotas on a product from other countries. Even if we put the moral arguments against coercion aside, and even if we nationalistically care only about Americans (I don't care only about Americans), the gains to the domestic producers from reducing trade are less than the losses to domestic consumers. I won't repeat that argument here because you can go to The Freeman to read it.The Freeman article he refers to above is available here. Read it and the rest of Henderson's blog posting.
Tuesday, 28 October 2008
"Energy independence" is one of those ideas that just doesn't go away, no matter how long you send explaining to people why it's crazy. Just look at the current US presidential campaign where both McCain and Obama think it's a good idea. To see why it's not such a good idea read David Henderson at the EconLog blog. He writes