Michigan man puts two signs in front of his house. One says ‘For Sale’, the other says ‘No Foreigners’.

Lee Friday – August 14, 2017

The Associated Press reports:

The Michigan Department of Civil Rights has opened a complaint against a man whose front-yard sign advertising the sale of his home indicates he won’t sell to foreigners.

The civil rights department says the sign violates state and federal laws against discrimination based on national origin.

The homeowner, James Prater, lives in Mason, Michigan. Prater will sell his house to someone and receive money in return. We refer to this interaction between the two parties as a transaction, or an exchange, or a trade. I will use the word ‘trade.’ Money will be traded for a commodity, which in this case is a house. This is typical – money always represents one side of every trade in the marketplace. This is true locally, nationally, or internationally.

Prater will not trade with just anyone. That is his personal policy. He has decided to restrict the market, which means he might receive less money when he sells his house. That is an economic burden which he alone will bear. His house. His decision. His loss. Nobody else’s business. He is not attempting to force his policy on other property owners.

In contrast, the government has a policy which is exactly the same as Prater’s policy – but a government policy, by definition, is a policy which is forced on everyone else, thereby imposing an economic burden on everyone else. I am referring to tariffs.

A tariff (or duty) is a tax, and it is often quite high. Most countries, including the United States, impose this tax on a wide variety of imported goods. Governments impose the tax to ‘protect’ domestic producers from foreign competition. A domestic firm or industry requests the tariff and the government says “okay.” Tariffs are a coercive mechanism of ‘life support’ for inefficient producers who cannot compete with the cheaper products produced by their foreign counterparts. Tariffs are economically counterproductive – importers are penalized, fewer domestic jobs are created and consumers pay higher prices, as I have written elsewhere.

When a tariff is imposed on a particular product, imports of this product decline, which means fewer of these products will be manufactured in the exporting country, which means there will be job losses in the exporting country. Thus, through its numerous tariffs, the United States restricts the market, just as Prater did. The government imposes conditions on trade, focused on specific products, and these products are made by individuals in foreign countries. Therefore, the United States government is discriminating based on national origin.

According to the U.S. Equal Employment Opportunity Commission, “The law forbids discrimination when it comes to any aspect of employment, including hiring, firing, pay, job assignments, promotions, layoff, training, fringe benefits, and any other term or condition of employment.” Yet, this sort of discrimination is precisely the effect of tariffs imposed by the United States government. The arbitrary imposition of tariffs often reduces the hiring, or increases the firing, of workers based on national origin. But these workers reside in foreign countries, not in the United States. I guess that makes it okay.

Technically, I suppose the U.S. government is not breaking its own laws, as the government might claim that “Our laws against ‘discrimination based on national origin’ apply only to acts of discrimination between individuals who physically reside in the United States.” But this would be a convenient, self-serving response. Supposedly these laws are intended to serve a positive social purpose. As such, how do we reconcile the legality of interactions among various parties residing within the borders of the U.S. versus the legality of interactions among various parties, some of whom reside in the U.S., and some of whom reside in foreign countries?

Does the government make these laws because it is morally opposed to discrimination, or because it is pandering to the desires of various groups? The facts strongly suggest the government is not morally opposed to discrimination. If the government was morally opposed to discrimination, politicians and bureaucrats would not take actions which ‘discriminate based on national origin’ regardless of the country in which the victims of discrimination reside.

Remember the old saying, “I disapprove of what you say, but I will defend to the death your right to say it.” In the same way, we might not agree with Prater’s decision, but we must defend his right to do what he wants with his own property. When we deviate from this position by appealing to the government, we find ourselves on a very slippery slope. Think this through carefully. Prater is unable to impose his policy on other property owners, who are free to trade with whomever they please. In contrast, the government’s tariff policy is imposed on other property owners – companies which import goods are forcibly prevented from using their money (their property) to trade with whomever they please at a price which they have mutually agreed upon.

The consequence of Prater’s discriminatory policy – a potentially lower selling price – is internalized by Prater. But the consequences of the government’s discriminatory tariff policies are externalized to hundreds of millions of people – importing companies penalized; fewer jobs in the economy (see above link); consumers pay higher prices (see above link); foreign workers lose jobs.

This story is just one example of how the concept of discrimination is poorly understood. Let Prater do what he wants with his own property. Step in only when he attempts to force others to manage their property according to his wishes. Focus your attention on the government, which constantly forces others to manage their property according to its wishes. Governments institutionalize discrimination.

Related article: Does CIBC CEO Victor Dodig believe in free trade, or just the illusion of free trade


Leave a Reply

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