A few weeks ago I attended the Tea Party rally here in DC. At first I was a bit hesitant to go as I feared it’d devolve into nothing more than an “us v. them” of Republicans bashing Obama/Democrats. However, after talking with some of the folks involved with organizing the rally my concerns were mitigated enough to attend.

At the rally, while some blame was correctly directed toward the Bush Administration’s policies most was fired at Obama and the Democrats (the notable exception being a few Joe Sixpack’s in the crowd that voiced their concerns about the overall burden of government). And many in the crowd, like that at other Tea Party’s, erupted into chants of “U-S-A!” While this in itself isn’t a bad thing, such sentiment can be used as justification for policies that benefit one group at the expense of another.

One clear example is that of trade. The “Buy American!” rhetoric has only increased during our economic downturn. Many individuals are rightly nervous about the stability of their job, making it easier for them to buy into the Big Union-backed calls to avoid foreign-made products. But does that make sense?

If say, a working mother chooses one, more-costly item over another similar item simply because the former happens to be made in the States is that a good thing?

No.

It means that working mother then has less disposable income to spend on other items, such as rent or baby food. Meanwhile, if millions and millions of other consumers are doing the same thing, a certain percentage of goods are dismissed simply because of where they were made, which effectively limits competition for the U.S.-made items. And without such competition U.S.-producers can be lulled into complacency, which means less innovation and more sub-par products, as we saw with the domestic auto markers in the 1970s.

In the example above the “Buy American” sentiment is voluntary. That is, the working mother decided to purchase the item based in part because of where it was made. That is her choice. Hopefully though, through education about the impact such actions have she can be convinced otherwise.

However some companies, eager to increase their profits, have no qualms about using the force of government to incentivize consumers to buy their product, by getting Congress to place a tariff on imported goods (thus making them more expensive), applying quotas to certain goods (thus limiting their supply), or giving them subsidies (thus forcing taxpayers to pay them so they can sell their goods for less) or any other protectionist measure. This is what economists call rent-seeking and it is in no way part of the free market. Rather, it is what happens when the scope of government gets so big that companies find it more effective to hire lobbyists and line the pockets of politicians with money rather than actually compete in the marketplace and provide goods and services that consumers willingly purchase.

The solution? Lessen the scope of government.

As Charles Krauthammer noted in the Washington Post,”The very last thing we need now is American protectionism. It is guaranteed to start a world trade war.” Exactly. And that’s why Tom Palmer, who has been on Facebook for a while, just sent his first appeal to friends to join a group, the Freedom to Trade: Say No to Protectionism, which lists as its very first sentence in its description, ” Trade restrictions will prolong and deepen the global recession.”

So, while some ideas may sound good on their surface, many times, included in this case, they have exactly the opposite consequence.

For more, check out the Free Trade Now! and Stop Rentseeking overviews and the Free Trade for Peace group started by Crasher scott on Bureaucrash Social.