David Friedman Explains Why Trump's Tariffs Will Fail | IEA Live

In this Institute of Economic Affairs Podcast, IEA Executive Director Tom Clougherty interviews David Friedman, renowned economist and author of "The Machinery of Freedom." The conversation explores Friedman's critique of modern trade policy discussions, which he compares to using "Ptolemaic astronomy" for contemporary issues. Friedman systematically dismantles common misconceptions about trade deficits, tariffs, and international commerce while explaining how exchange rates naturally balance trade between nations.David shares his insights on how tariffs harm both importing and exporting industries within a country, making the entire nation poorer by forcing less efficient production methods. The discussion also covers recent political developments, including Trump's trade policies, Argentina's economic reforms, and the prospects for libertarian principles in modern governance. Friedman explains why free market ideas often struggle politically despite their economic soundness.The interview concludes with an examination of immigration policy, private cities, and alternative governance systems. Friedman offers his perspective on monarchy as a governance structure and critiques various approaches to libertarian politics. Throughout the conversation, he demonstrates his characteristic analytical approach, drawing from both economic theory and historical examples to illustrate complex concepts in accessible terms.The Institute of Economic Affairs is an educational charity, it does not endorse or give support for any political party in the UK or elsewhere. Our mission is to improve understanding of the fundamental institutions of a free society by analysing and expounding the role of markets in solving economic and social problems. This is a public episode. If you'd like to discuss this with other subscribers or get access to bonus episodes, visit insider.iea.org.uk/subscribe