Question

1.Should consumers in, say, the U.S. be required to purchase only goods manufactured in the U.S. even if those goods cost more to produce?

As you know, recent trends in political rhetoric and trade indicate a movement away from a global marketplace and more toward protectionist trade policies. Is this a good or bad thing? Explain your answer.

2.Do the tenets or principles of classical liberalism align more closely with a conservative viewpoint toward entitlements, or with a progressive viewpoint of entitlements? Explain your answer.

Answer 1

1. I think it is a bad thing to decide that we should only buy US-made goods, in spite of all the political rhetoric around it.

A functional global market and trade have many economic benefits. Trade increases overall wellbeing of consumers across the world. Each country has different resource endowments and different areas of strength. Therefore, different countries can produce different goods at different costs. Ideally, a country should produce only those goods which it can produce at a lower cost than others. This way, every country can specialize and trade with other countries. This minimizes costs of goods and services and maximizes welfare. The US should not be producing goods in which it does not have a comparative advantage (for example, labor-intensive goods like computer chips or textiles.) Restricting trade and discouraging global market will result in loss of economic efficiency, a rise in the cost of production, loss of consumer welfare and loss of US competitiveness.