We’ve had one sensible decision made about trade post-Brexit. Bangladeshi goods will continue to enter the UK tariff free. Now, if only people got to grips with the more general application of this point:
The underlying argument comes from Adam Smith himself — you can understand why someone at an institute named after him might like this — and is about the division and specialization of labour. None of us is good at everything, some of us at least are good at doing some things. It makes sense for things to be done by people who are good at them.
That way, we get better things and also we get more of them. So, that’s the division of labour, we each do different things and make different things. As we do so we are “specializing” and as we do more of the one thing then we will get better at them. So far, this is just obvious from any observation of the human beings around us.
It applies to who cooks and who puts up the bookshelves in a household just as much as it does to who makes clothes and who does the accounting in the economy as a whole.
If we are to have this division though, we clearly need to have trade following it. It’s no good the cook having nowhere to put her books, nor the shelf-maker not being able to eat. Or, of course in the country as a whole, only the clothes-makers having anything to wear and the accountants being entirely naked. So, that increased and specialized production must be traded.
The thing about this argument is that there is no obvious difference between the few people within a household, those in a village, a town, a country or the entire world. We are all made better off by more division, more specialization, and more trade in the resultant higher production.
So, stop taxing people for buying from the specialists. That is, have no tariffs on anything.