Taxation and Domestic Free Trade
AbstractIn this paper it is argued that the domestic division of labor and trade is organized according to the same principle as the international division of labor and trade – the Ricardian comparative advantages. After all, the ultimate source of these comparative advantages is the individual. The comparative advantages of individuals then lend themselves to groups of people, companies, regions and countries. It is these that make it worthwhile for people to cooperate on any larger scale at all; we all rely on them and they imply that there is room for everyone in society. But just as tariffs ruin the international division of labor, taxes and similar domestic government interventionism destroy the domestic division of labor among people. This is illustrated by means of the ‘division of labor condition’, where taxes enter as a possible restriction to trade, thus creating a Darwinist society of the survival of the fittest. The least productive individuals and those who face the highest barriers to trade run the risk of ending up on the outskirts of society. The more productive ones will run the risk of overreaching as they are forced to perform more and more tasks themselves. The result is not only more home labor and more black markets, but also real barter and situations where nothing gets done at all. To restore the division of labor, and to make room for everyone who wants to participate in it, it is argued that removing barriers to domestic trade is the only possible option.
Download InfoIf you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
Bibliographic InfoPaper provided by The Ratio Institute in its series Ratio Working Papers with number 40.
Length: 16 pages
Date of creation: 29 Apr 2004
Date of revision: 07 Jun 2004
Publication status: Published in Skatter & välfärd, Karlson, Nils, Johansson, Dan, Johnsson, Richard (eds.), 2004, pages 140-164, Ratio.
Note: The publication refers to a Swedish version of the paper.
Contact details of provider:
Postal: The Ratio Institute, P.O. Box 5095, SE-102 42 Stockholm, Sweden
Phone: 08-441 59 00
Fax: 08-441 59 29
Web page: http://www.ratio.se/
More information through EDIRC
Division of labor; Comparative Advantage; Trade; Productivity; Growth; Taxes; Unemployment; Household Labor; Informal economy;
Find related papers by JEL classification:
- B30 - Schools of Economic Thought and Methodology - - History of Economic Thought: Individuals - - - General
- B53 - Schools of Economic Thought and Methodology - - Current Heterodox Approaches - - - Austrian
- D13 - Microeconomics - - Household Behavior - - - Household Production and Intrahouse Allocation
- D31 - Microeconomics - - Distribution - - - Personal Income and Wealth Distribution
- D51 - Microeconomics - - General Equilibrium and Disequilibrium - - - Exchange and Production Economies
- D60 - Microeconomics - - Welfare Economics - - - General
- D70 - Microeconomics - - Analysis of Collective Decision-Making - - - General
- E23 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Production
- E24 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Employment; Unemployment; Wages; Intergenerational Income Distribution
- E31 - Macroeconomics and Monetary Economics - - Prices, Business Fluctuations, and Cycles - - - Price Level; Inflation; Deflation
- E60 - Macroeconomics and Monetary Economics - - Macroeconomic Policy, Macroeconomic Aspects of Public Finance, and General Outlook - - - General
- F00 - International Economics - - General - - - General
- F10 - International Economics - - Trade - - - General
- F20 - International Economics - - International Factor Movements and International Business - - - General
- F40 - International Economics - - Macroeconomic Aspects of International Trade and Finance - - - General
- H20 - Public Economics - - Taxation, Subsidies, and Revenue - - - General
- H30 - Public Economics - - Fiscal Policies and Behavior of Economic Agents - - - General
- J22 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Time Allocation and Labor Supply
- J23 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Labor Demand
- J24 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Human Capital; Skills; Occupational Choice; Labor Productivity
- J31 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Wage Level and Structure; Wage Differentials
- J38 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Public Policy
- J44 - Labor and Demographic Economics - - Particular Labor Markets - - - Professional Labor Markets and Occupations
- J60 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - General
- O11 - Economic Development, Technological Change, and Growth - - Economic Development - - - Macroeconomic Analyses of Economic Development
- O12 - Economic Development, Technological Change, and Growth - - Economic Development - - - Microeconomic Analyses of Economic Development
- O13 - Economic Development, Technological Change, and Growth - - Economic Development - - - Agriculture; Natural Resources; Environment; Other Primary Products
- O40 - Economic Development, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - General
- P16 - Economic Systems - - Capitalist Systems - - - Political Economy of Capitalism
You can help add them by filling out this form.
CitEc Project, subscribe to its RSS feed for this item.
- Johnsson, Richard, 2004. "Economic Freedom in Sweden 1950-2002," Ratio Working Papers 55, The Ratio Institute.
- Tax in Wikipedia (English)
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Martin Korpi).
If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.
If references are entirely missing, you can add them using this form.
If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.
If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.
Please note that corrections may take a couple of weeks to filter through the various RePEc services.