Schedium

Volkswagen plant in Wolfsburg, Germany (photo by VW_Werk_Altes_Heizkraftwerk.jpg: Richard Bartz derivative work: Diliff via Wikimedia Commons) A white paper released by the British government in 2017 described the United Kingdom as an " open, liberal market economy ", whose foundation lies in "the power of the competitive market - competition, open financial markets, and the profit motive". Despite recognizing the government's "strategic power and leadership role" in developing and disseminating technologies and industries, the white paper rejected protectionism and equated industrial policy mostly with Research and Development (R&D), education and infrastructure. Nowadays there is a widespread belief that countries develop because of "free market" . Therefore, economically poorer regions, such as Greece, southern Italy or Portugal, are responsible for their own poverty, either because of their cultural shortcomings, ...

(Image by kees torn (CSCL GLOBE) [CC BY-SA 2.0], via Wikimedia Commons On the latest episode of Last Week Tonight, comedian John Oliver made fun of Donald Trump's tariffs and mocked him for not understanding how free trade works.   Oliver noted that tariffs are paid by importers and typically passed along to US consumers, leading to higher prices. Tariffs could cost the US hundreds of thousands of jobs, Oliver argued.  Trade deficits "aren't actually always bad, and many economists believe, for very complex reasons involving savings rates and the dollar's special status as the world's reserve currency, that America's trade balance might be more or less where it should be," he said. Oliver argued that "the overwhelming consensus among economists is that trade between countries generally speaking can create jobs, lower costs, and be a net benefit to both nations."  But is John Oliver right? We shall argue that although Tr...