Robots, Scud Missiles & Free Trade

A friend and I recently got into an argument about whether or not we should reduce tariffs, as happened a few months back with South Korea. My logic was, “Sure, free trade benefits everybody, and the more investments and markets a foreign nation has over here, the less likely they are to encourage people to bombs us.” His logic was, “No. Because America is better than other countries.”

This exchange, plus the realization that I haven’t drawn robots in nearly a month, prompts a quick lesson on free trade vs. protectionism.

The argument for free trade is that with fewer barriers and tariffs between two or more nations, each will focus its resources on what it’s best at making. This is an efficient system because the law of supply and demand ensures that if the supply goes up, the product will cost less to produce and buy. Prices will go down for consumers.

Meanwhile the countries involved in trade grow warm and cuddly because their businessmen are flying back and forth having affairs and such. Savvy businessmen rarely bomb countries where their mistresses live. Noting that businessmen are also twice as likely to drop $10,000 into a Super PAC than the other people at the grocery store, it’s a safe bet that countries which trade a lot will feel less inclined to bomb the hell out of each other.

So, hypothetically, let’s say America is really good at building scud missiles and terrible at building robots, but Japan excels at robot construction and is awful at making decent scud missiles. Without tariffs, America might construct 100 scud missiles for every robot it hobbles together, while Japan cranks out 40 robots for every scud missile. That’s a whole lot of scud missiles and robots!

But what if our domestic manufacturers realize they cannot hope to compete with flashy Japanese robot companies? What if Japan makes their robots cheaper because they contract out the easy stuff (like metallic claws and eye lasers) to China, which effectively employs slave labor? We can’t do that with Mexico because half of Mexico is a narco-state right now, and drug traffickers are surprisingly bad at supervising sweat shops.

Our domestic robot producers will then approach the government and ask for a “tariff,” which will impose a tax on all imported robots. A 30% robot tariff would suddenly make the $100 Japanese model cost $130, and so the hitherto expensive $120 American robot would become comparatively cheaper through market manipulation.

If our robot factory owners are successful in implementing a tariff, four things will result:

1. The American robot manufacturers will make a lot more money.

2. Japan will sell fewer robots, which will piss off the Japanese, particularly their robot manufacturers. Because their country is not that much smarter than ours is, they will probably respond by raising a scud missile tariff to protect their own domestic industries and to punish us.

3. With less scud missile demand from abroad, some of our own manufacturers will fold up, while several Japanese robot manufacturers will lose profits and kill themselves. The result will be inefficiency in both countries: now America will make 80 scud missiles for every robot, while Japan will slap together only 30 robots for every scud missile it makes.

4. Because of the way supply and demand works, prices for both robots and scud missiles will rise. Consumers in both nations will make up the difference. If you were saving up the change in your jam jar to buy a decent scud missile for your boyfriend– too bad! You’ll have to wait at least another year or so before you hoard enough quarters.

So consumers do not win from this process. Some parties in industry will come out better (American Mom-and-Pop robot factories and Japanese wholesale scud missile makers will become competitive again) while others will suffer (decent American scud missile suppliers and honest, down-to-earth Japanese robot assemblers). Consumers in both countries lose, because prices for both products will rise.

The only consistent winner here is military suppliers, whose handsome government contracts enable them to gobble up high quality American scud missiles and hard-working Japanese robots as soon as they come off the line. If somebody over at Brookings says, “Only a robot armed with scud missiles could possibly stop Nuclear Iran from becoming a reality!” you know a bunch of military contractors will be wetting their pants with excitement.

If the tariffs keep adding up and Japan and America can’t think of another way to distract their citizenry, they might enter a protracted “trade war.” If this happens, our business folks might quit visiting Japan for extramarital affairs and no longer be concerned with blowing it up. Same goes for the Japanese business folks and their sweaty American romps.

When that happens we’re all screwed. Because that’s when we go to war with Japan. Again.

Except this time they’ll have robots.

If this post made you laugh or think, kindly “like” MightyHeaton.com’s Facebook page: 

 Andrew Heaton is a writer and standup comedian in New York City. If this post made you laugh or think, kindly "like" it on Facebook.

14 Comments

  • Norman
    March 2, 2012 - 1:35 pm | Permalink

    Do you know the Candlemaker’s petition?

  • Melody
    March 2, 2012 - 2:11 pm | Permalink

    Have you considered teaching?

  • Norman
    March 2, 2012 - 3:20 pm | Permalink

    @Melody

    Shhh, don’t tell him to teach! I don’t want the competition.

  • Pingback: Robots, Scud Missiles and Free Trade « Economics Info

  • Matt
    June 7, 2012 - 8:26 pm | Permalink

    One of the clearest/funniest stump speaches for free trade that I have ever read.

    • Heaton
      June 8, 2012 - 12:08 am | Permalink

      Thanks, Matt! You have the gratitude of myself and global commerce!

  • Pingback: Offshoring, Nonsense & Robots | MightyHeaton.com

  • Pingback: Cloture Club Offshoring, Nonsense & Robots - Cloture Club

  • March 8, 2014 - 5:29 am | Permalink

    Truly when someone doesn’t understand after that its up to other users
    that they will help, so here it takes place.

  • May 13, 2014 - 3:14 pm | Permalink

    I hardly write responses, but i did a few searching and wound up
    here Robots, Scud Missiles and Free Trade | MightyHeaton.com.
    And I do have 2 questions for you if you usually do not mind.

    Is it just me or does it look like a few of the responses
    look as if they are left by brain dead people? :-P And,
    if you are posting at additional online sites, I would like to follow everything new you have to
    post. Would you list of the complete urls of your social
    sites like your twitter feed, Facebook page or linkedin profile?

    Here is my site; Herbalife reviews

  • May 14, 2014 - 6:51 am | Permalink

    Howdy! Do you use Twitter? I’d like to follow you if that would be ok.

    I’m absolutely enjoying your blog and look
    forward to new updates.

    Check out my homepage: Amway

  • May 15, 2014 - 2:20 am | Permalink

    eternity warriors 3 hack includes a big position inside
    Us Traditions. Many individuals are frequently viewed doing pursuits linked to eternity warriors 3 cheats.

    This can be partially mainly because folks of all age groups could be
    concerned along with families tend to be produced with each other through this kind of.
    Commonly an individual exactly who exhibits their own detest regarding eternity warriors 3 hack android can be deemed a outcast.

  • June 16, 2014 - 4:09 am | Permalink

    This seems loke a typical flip, the bequty for the investor is they can do this all in oone transaction, they don’t purchase the home until they have a buyer and they
    own the home for literally 5 minutes. One of the onjly ways
    to avoid giving away your equity and hard-earned money is to cutt out the
    middle man altogether. When selling your house, you want to de-personalize it.

  • October 1, 2014 - 12:11 pm | Permalink

    Whats up very cool web site!! Guy .. Beautiful ..
    Amazing .. I’ll bookmark your blog and take the feeds also?

    I am glad to find so many useful information here in the post, we’d like develop extra strategies
    on this regard, thank you for sharing. . . . . .

  • Leave a Reply

    Your email address will not be published. Required fields are marked *

    You may use these HTML tags and attributes: <a href="" title=""> <abbr title=""> <acronym title=""> <b> <blockquote cite=""> <cite> <code> <del datetime=""> <em> <i> <q cite=""> <strike> <strong>