Summer School 5: 250 years of trade history in three chapters
Planet Money
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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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