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BOHANON & STYRING: Don't get carried away with 'America First'

April 15, 2017

Economic AnalysisWe hear “America First” a lot these days. Buy American. Hire American. Build American. That caused us to wonder … if some “Buy America” is good, would total Buy America be best? What if we tried a totally closed economy? No imports. No exports. No trade deficit. No investments in. No investments out. No immigration. Everything produced here by Americans. Could we exist in isolation?

Well, yes, probably. In fact, the United States is one of the few countries that could aspire to autarky (the 75-cent word economists use to describe total economic isolation). Food and energy are key. We have both. Without them we’d be back to the era of stone axes and spears, and most of us would die.

The United States is one of the world’s bread baskets. We could feed ourselves. Countries such as Switzerland or the United Kingdom might make it if most of their population toiled in greenhouses or tended hydroponics tanks, but America would be OK. Our diets might be lighter in seafood and heavier in grains, but we’d get our calories.

Energy? Self-sufficiency there, too. We’re up to our ears in coal. We’ve become a net natural-gas exporter. Oil? That would take a price of perhaps $75-$80 per barrel to coax enough marginal fracking fields into production, but we’ve survived $100+ oil before.

Is there anything we absolutely can’t do without that we can’t produce domestically? We can think of a few, but nothing we couldn’t finesse at some cost. For example, certain rare earth minerals are necessary in electronics, and we’re light on those. Maybe we send Seal Team 6 out on periodic Viking-like raids to seize those supplies.

So we could conceivably live without the rest of the world, but at what cost? We buy things from other countries because they can do them better and/or cheaper. Scottish economist Adam Smith wrote in his day (1776) that small quantities of good wine were produced in Scotland, but it made much more sense to buy it from the French. Coffee would become an expensive luxury drink here, as Hawaii is the only state currently producing it. However, Indiana farmers with no export markets would need alternative employment; maybe we could pay them to grow coffee beans in greenhouses.

How much would our living standard drop? Who knows? Probably, we’d wind up something like Albania. America First is a nice slogan, but let’s not push things too far.•

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Bohanon is a professor of economics at Ball State University. Styring is an economist and independent researcher. Both also blog at INforefront.com. Send comments to ibjedit@ibj.com.

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