By EAF editors

Though the US presidential election still has some way to go, it’s hard to imagine that a more ridiculous idea will be floated than Donald Trump’s recent proposal to replace the US income tax with import tariffs. The idea would almost certainly never make it through the US Congress even if, as is looking increasingly likely, Trump wins the presidency.

Like many harebrained ideas, Trump’s is based on a partial and misremembered version of history, in which the United States of America grew to industrial prominence thanks to its protectionism. It is certainly true that of all the major industrialisations of the past two centuries, America’s was the least dependent on foreign trade, and for a long time the federal budget was financed almost entirely by tariff revenue. Even in the nineteenth century, though, tariffs were never exorbitantly high, and their revenue did not have to finance the large military and social security system that the income tax now does.

The world and the United States, to put it mildly, have changed drastically since then. The United States is no longer a large agrarian economy looking to reach the technological frontier; it is at that frontier. Modern manufacturing is infinitely more complex, and the idea that any one country could competitively produce everything it wants to consume is a mirage.

A milder form of this delusion is still influential........

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