The Blue Ridge Center and Economics Club hosted one of the finest debates of the year, treating students to a passionate discussion from two renowned professionals in the economic field. Scott Linciome and Mark Diplacido kept the audience engaged with concise arguments regarding tariff policy, eliciting laughs and smiles as they took professional — yet animated — shots at each other’s positions. The Blue Ridge Center and President Gerard Alexander aim to fill knowledge gaps in students’ coursework by hosting events on specialized topics and under-discussed ideas. The debate “Genius Idea? Or Economic Disaster?” certainly achieved that goal.
Following a brief introduction, Professor DiPlacido began by laying out a brief history of tariffs in the US. Most students present have been born and raised in an era where free markets are considered a shared value across political parties, yet Diplacido points out the relative newness of our mostly tariff-free world.
His argument for a return to pre-WWII protectionist trade policies was threefold. Firstly, economic stability can be attained by achieving a trade balance. The benefits of competitive advantage, he claimed, are based on the assumption that trade is an exchange of goods for goods. Instead, the current system relies on America bleeding out its assets — bonds, cash, and stocks — for basic consumer goods, threatening the stability of the dollar and making the US susceptible to supply chain shocks across the globe.
DiPlacido’s second claim focused on the national security implications of totally free trade. In the current system, sectors such as the drone and chip manufacturing industries are often based outside of the US. Diplacido argued that by enacting stronger tariffs, the US could begin to develop militarily vital production at home. “What won us WW2 is that we had an industrial base to rely on,” claimed DiPlacido.
Finally, our globalized economy has led to greater economic disparity in the US, with devastating consequences. In some parts of Appalachia, for example, the outsourcing of the manufacturing industry led to the wholesale gutting of localized economies, with the sharp disparities leading to an increase in deaths of despair. Current rates are the equivalent of a “747 dropping out of the sky every day,” pointed out DiPlacido, helping to make a sobering case for the protection of jobs through tariffs.
The debate’s unique intensity came because Lincicome was in strong disagreement following DiPlacido’s seemingly solid opening remarks. The goal of using tariffs to build up nascent domestic industries, Lincicome argued, simply has the result of “pushing a lot of resources to low-value industry.” Some industries are simply not going to take off in the US, such as bananas or coffee, and prioritizing their protection takes away from investment that could be going toward cutting-edge technology.
For Professor Lincicome, the complexity of the global market is also too great to justify protectionism. He claimed that 80% of manufacturers’ workers are employed in import-export companies, so the argument that manufacturing protection for US companies will lead to better profits, wages, and conditions in those companies is not true. Instead, these import-export companies, which rely on open international trade, will have to manage increased tariffs by reducing wages or firing workers.
Rarely are tariffs implemented in an economically ideal way, either. Instead of being honest attempts to improve domestic industry, they can be the “perfect vehicle for government corruption and cronyism,” according to Lincicome. Lobbyists will offer benefits to lawmakers, making the decision on what and how much to tariff a not purely economic argument, but one that has to acknowledge the various ways in which politicians can be manipulated by industries that are not operating with the same pure desire to boost the domestic economy. Both Lincicome and DiPlacido performed well and addressed each other’s points over an hour of debate.
The wisdom of such knowledgeable economists, the lively back-and-forth discussion, and the trendy topic made the event a model for like endeavors on campus. The Blue Ridge Center and Economics Club should be proud of offering the opportunity to students and keeping alive the art of impassioned disagreement.
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