Economic history is about people seeking to improve their own situations (as economists say, by maximizing their utility) by exchanging with fellow human beings and ultimately developing expanded commerce and markets. What is it, if not a record of an attempt to change it? (See John Hicks. theory of economic history.) Of course, economic history is alsodark side of the force” Because some individuals choose plunder rather than voluntary exchange. Economic history continues. Paul Kiernan’sLogging is a way of life in Appalachia. hanging by a thread” Published in the October 29, 2024 issue. wall street journal.
Hardwoods (oak, hickory, maple, walnut, cherry) were among the first exports of the American colonies, along with furs. It has been used for a variety of purposes, from flooring and cabinetry to paper and pulpwood for making airplane propellers. More efficient alternatives are being developed, such as aluminum for propellers, plastic for flooring, and softwood and aggregate for furniture. “Efficient” means what consumers choose given their preferences, income, and relative prices of substitutes. Technology also affects supply-side costs and, in turn, market prices. For example, online publishing has reduced the demand for paper, which has also reduced the demand for small hardwoods (used for pulpwood). Considering all these factors, the lumber industry requires fewer workers, consisting of sawmill workers, loggers, and truck drivers. Logging as a way of life in Appalachia has been threatened for some time.
There is nothing sacred about lumber or any other industry in Appalachia or anywhere else. As the entire economic history of humanity has demonstrated, consumer demand and producer costs change. But this does not mean that political authorities should intervene in the industry. In addition to purely economic factors related to spontaneous market demand and supply, the trade war that the US government launched with tariffs on Chinese goods (and US consumers, for that matter) in 2018 has led to a decline in trade wars. This was a contributing factor. The Appalachian hardwood industry and its way of life. The reporter explains:
As domestic demand for lumber declined, Appalachian sawmills turned to exporting. From 1999 to 2017, U.S. hardwood exports nearly doubled to $2.65 billion. China had valued wood in construction for centuries, and the rise of the middle class fueled a housing boom that accounted for 57% of U.S. hardwood exports by the end of the same period.
That meant the industry was at risk when a trade war broke out. From 2017 to 2019, exports to China decreased by 50%.
Production (of eastern hardwoods) this year is on track to be 40% lower than in 2017, the year before the trade war with China hit the industry hard.
The Chinese government retaliated to the new U.S. tariffs by imposing its own tariffs, including on timber imports. As always, China’s tariffs were likely paid by Chinese importers, but they reduced demand for Chinese timber, especially imported timber. Retaliation, like corresponding tariffs, would be multiplier and absurd. As the US government punished “its” domestic consumers (including intermediate industrial users), the Chinese government punished “its” domestic consumers. Tariffs and retaliation create a double coercive wedge on commerce. They are a form of looting. Note that even without retaliatory measures, a tax (duty) on imports is also a tax on exports through appreciation of the importing country’s currency after import restrictions.
Another way to look at this is that the US government’s support for domestic production of tariffed items such as steel and aluminum led to the decline in hardwood production. This is not surprising. Resources (labor and capital) are limited; ceteris paribusproducing more of one good or service means less of something else. moreover, protectionism As a result, Appalachia’s competitive hardwood industry produced less than it should have, and its less competitive steel and aluminum industries produced more. Protectionism is inefficient.
of WSJ China’s tariffs on U.S. timber were reportedly lifted in early 2020. However, this did not repair the Appalachian timber industry. Protectionism often has long-term effects on market opportunities. More generally, government interference in trade, whether domestic or international, undermines free enterprise, consumer satisfaction, and overall prosperity.
