Defending Dynamic Markets

Sometimes, I feel I’m put in the strange position of defending markets from free traders. That seems to be happening in this ongoing debate with John Puri about the effect of tariffs.

Puri grants more than his headline suggests. He agrees that the aim of a tariff is more domestic production, and that if the tariff works, prices “should eventually fall as supply rises.” What he doesn’t grant is that it can fall to below where he started. Puri writes: