Summer School 5: 250 years of trade history in three chapters
Planet Money
Concentrated Benefits Triumph Over Diffuse Costs
Tariffs initially serve as revenue generators but evolve into protectionist policies driven by factory owners who influence Congress to shield them from foreign competition. A small group of economically motivated factory owners pushes for these protective measures, presenting a compelling narrative about job security, while the broader public, facing higher prices, is less organized and less invested in challenging the status quo. This dynamic illustrates a political reality where concentrated benefits for a few consistently overpower the widespread but less salient costs borne by the many, leading to a persistent protectionist environment despite the overarching economic theories advocating for free trade.
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