Professor Don Boudreaux of George Mason seems offended that I mentioned Hayek while pointing out that a free-trade advocate wrongly assumed that costs stay fixed in a dynamic market. He wrote a letter in response. I’ll reproduce portions of it below. Boudreaux writes:
Nope. I never said or implied that Hayek supported tariffs in that article. What Boudreaux never states directly is that my argument was with John Puri’s contention that tariffs “must permanently raise prices to some extent,” because “the relatively higher domestic production costs that made the tariff ‘necessary’ in the first place remain constant.” He doesn’t defend Puri’s contention, either.






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