We Don't Need Trade Policy

In yesterday's post, I wrote of some "inhuman action" on the part of two very senior IAS men - the abolition of import duty on onions combined with State import of the same. Towards the end of the post, in which I examined the laws of inhuman thought that guide inhuman action, I concluded that "they think like communists." I ought to have written that they think like Nehruvian socialists.

How far we have come from the classical liberal training imparted to its civilians by the East India Company at their academy in Haileybury, of which one testimony goes:

At Haileybury, everyone had learnt that political economy was a matter of laws, that money and goods would move by themselves in ways beneficial to mankind. The less any government interfered with natural movements, the better.

It was one such classical liberal British colonial civilian who transformed Hong Kong - and the first policy there was unilateral free trade.

Contrast that with the IAS secretary of commerce vision: Duty-free onion market.

Now, imagine what will happen if a ship from Hamburg docks in a Goa harbour, laden with a million cases of weissenbier and one sack of onions. The customs will let the onions in duty-free and order all the weissenbier back!

Someone raised an objection to my call for the abolition of customs duties. She said: "What will happen to the revenue?" I said protectionists are NOT interested in revenue. Tariff "barriers" and tariff "walls" are such enormous obstacles to exchange that there is zero trade - and hence, zero revenue.

So that's the choice before all our port cities and towns - the duty-free onion market or the duty-free anything and everything market.

We don't need "trade policy."