American Consequences - January 2019


of $9,850 in Equatorial Guinea (they have some oil) and a low of $418 in the Central African Republic (they have some cassava, when they can afford it). GDP p/c is not a perfect indicator of economic well-being, which partly depends on how – and if – the GDP is distributed. But GDP p/c is a useful glimpse at material conditions, a sort of “economic selfie.” World average GDP p/c is $17,300. U.S. GDP p/c is $59,532. The World Bank poverty level (and it’s a very low level) is $1.90 per person per day, or $693.50 a year. Assuming that each bread (or cassava) winner has to provide for four other people, then $630.50 x 5 = $3,467.50 (and the multiplier is often much greater than 5). Therefore, when a country’s GDP p/c is below $3,500- $4,000, nobody’s getting fat. (Other than the almost inevitable dictator and his wives and his children.) So life sucks in countries with high tariffs. Except... We’ve only looked at seven out of the top 10. There are three other countries on the list. Bermuda – No. 1 in the world with a tariff rate of 18.73%, Bahamas – No. 2 at 18.56%, and Cayman Islands – No. 5 at 16.72%. Two of these places, Bermuda and Cayman Islands, are rolling in it, with GDP p/c, respectively, of $87,478 and

According to those with faith in the blessings of free trade (and we at American Consequences count ourselves among them), high tariffs force a country to beggar itself, and low tariffs tip the Horn of Plenty, spilling forth the good things in life. On the other hand, according to those who believe trade deficits are sinful (and this creed has adherents in high places), low tariffs lead to dust and ashes and gnashing of teeth, while high tariffs rake gold, precious gems, and pearls beyond price into a nation’s coffers. Do tariff statistics prove one dogma or disprove the other? We consulted the World Bank’s data on international tariff rates – or, to put it in World Bank jargon, “the weighted mean applied duties levied on imported goods, capital, and services.” At first glance, the countries with the Top 10 tariff rates seem to confirm the free trade gospel. Djibouti – 17.56% Gabon – 16.93% Chad – 16.36% Equatorial Guinea – 15.63% Iran – 15.23% Central African Republic – 14.51% Solomon Islands – 14.08% The average GDP per capita (p/c) of these countries is $3,953, with a high


January 2019

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