Harry Browne, the two-time presidential candidate for the Libertarian Party, wrote some brilliant pieces. He was well-versed in all things libertarian and also contributed greatly in investing. He even wrote a self-help book. Today, I want to focus on an article he wrote back in 1992 dealing with economic fallacies.
One of the great things about Harry Browne is that, although he passed away almost 5 years ago, you can read his material today and most of it still seems relevant. Even things that were written 40 years ago seem relevant today. This article from 1992 is no exception.
If you listen to much economic analysis (if that's what you want to call it) from the mainstream media, you are likely to hear that we need more manufacturing in our country. Of course, when I hear that, the commentator who says it doesn't usually offer up a specific solution. Does he want to force people to do certain jobs? Does he want protectionist tariffs? Does he want us to be forced to buy certain products made in the U.S.A.?
This topic is brought up more frequently now because of China. For some reason, some people in the U.S. think that the Chinese are a threat. Does it really matter that we buy a lot of "stuff" from the Chinese? Does having an imaginary line between two countries (called a border) somehow make trade wrong? If the Chinese have a comparative advantage in manufacturing things, while Americans sell services, so what?
If there is less manufacturing in the U.S. because of government and central bank policies causing malinvestment, then that is certainly a problem. But that is not what a lot of people are talking about. If that is the case, then of course the solution is to get the government and central bank out of the way and let the free market prosper. The market will allocate resources the most efficiently and if that means more or less manufacturing for Americans, then I don't really care.
Harry Browne's arguments from almost 20 years ago are as relevant today as they were then. We would be wise to listen.