Trade and Prosperity in the States: The Case of Mississippi

10/01/2018

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Patrick Tyrrell and Anthony B. Kim | The Heritage Foundation

Abstract International trade and investment support hundreds of thousands of Mississippi jobs. About 51,000 Mississippi jobs depend directly on exports, and another 41,700 jobs have been created by foreign direct investment. Thousands more jobs depend on foreign trade to generate business activity in fields including: retail, transportation, construction, advertising, and legal services. To continue to create jobs and increase prosperity, Mississippi’s representatives should encourage continued reductions in government barriers to trade and investment. The freedom of Mississippians to do business with people around the world is increasingly important to the state’s economic wellbeing. Jobs created exclusively by exports abroad and foreign investment account for 6 percent of Mississippi’s private-sector non-farm employment, an amount that is likely to grow as global barriers to trade and investment fall.1 Also dependent on international trade for all or part of their livelihoods are the 96,310 Mississippians who work in the transportation and material moving occupations; 51,630 Mississippi retail workers; 41,650 Mississippi construction industry workers; 5,820 Mississippians who work in legal occupations; and 810 advertising workers in Mississippi.2 Employment in these and other industries has been aided by lower transportation costs, new technologies, and trade agreements that lowered U.S. and foreign trade barriers. To continue to create jobs and increase prosperity, Mississippi’s representatives should encourage continued reductions in government barriers to trade and investment. Mississippi’s Roots in Free Trade Trade policy seems controversial today, but it was even more of a hot-button issue early in U.S. history. Taxes on imports—also known as tariffs or duties— were an important source of early revenue for the federal government. Politically powerful manufacturers in the North thought that import taxes should also be used to protect them from foreign competitors. However, like most Southerners at the time, Mississippi’s elected officials believed that tariffs should only be used to raise revenue for the federal government, not to protect industries from international competition. For example, President James Polk’s Secretary of the Treasury, Robert J. Walker, a former Senator from Mississippi, in his annual report dated 1845 propounded the following principles, “That no more money should be collected than is necessary for the wants of the government economically administered,” and “[t]hat the duty should be so imposed as to operate as equally as possible throughout the Union, discriminating neither for or against any class or section.4 ” Mississippi Governor Gerard Brandon and the Mississippi legislature opposed legislation like the 1828 “tariff of abominations,” which increased the price of manufactured goods in Southern states and impeded Mississippi’s cotton exports.5 Although special-interest “protective” tariffs are more widely advocated today, Mississippi’s state legislature used to view them as unconstitutional abuses of government power.

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