Rocks in the Harbor: Beveridge and Robinson

For teachers of economics, one familiar metaphor about tariffs is “rocks in the harbor.” Companies and countries take go to considerable trouble and expense to build docks and interconnected transportation structure, and even dredge the harbor to assure smooth transit for vessels. Having done all that, it would seem peculiarly illogical to then dump rocks into the harbor, raising the costs of trade and offsetting the previous investments. The metaphor seems to have originated with William Beveridge (of the eponymous “Beveridge curve”), in a 1931 book entitled Tariffs: The Case Examined. Beveridge sets up Note that this book is written as the Great Depression starts to bite, and as nations start to raise trade barriers in the hope that it will buffer their national economies against the Depression. Beveridge puts the connection between tariffs and rocks-in-the-harbor this way (p. 110): Gain through freeing imports from taxation does not depend on other other countries doing the same.…