The Diversity Solution

[Boojatta]

Wasn't there a time when manufacturers couldn't compete with European imports, and tariffs forced people in the Southern states to pay higher than necessary prices for the benefit of Northern manufacturers? The most obvious alternative -- no tariffs -- would seem to have meant accepting that America wouldn't industrialize, but would keep its primary economic role as that of supplier of raw materials to Europe.

Of course, there wasn't a fixed collection of Northern manufacturers who simply gained. There was competition between manufacturers, some enterprises grew, and new enterprises were established.

When new towns are established, and when new enterprises are established in growing towns, there is a kind of geographically localized economic development occurring. However, this growth in a particular geographic region may be limited by difficulty competing with existing enterprises far from the region. "Far" doesn't necessarily mean that the competitors are in a foreign country.

If it is accepted that tariffs were necessary in the past to stimulate economic growth in America, then it's not clear why we should refuse to consider the idea of local tariffs. If local regions were given authority to impose their own tariffs, then some people would have higher costs in the short-term but, in the medium-term and long-term, there could be economic benefits.

There could also be local currencies because exchange rates matter. If your dollar is cheaper, then you have an advantage as an exporter. With computers, it should be reasonably easy to handle the complexity of new local tariffs and new local currencies.