President Trump is about to decide whether to raise the price of solar energy, based on an economic theory refuted in 1845.
In response to a formal complaint, the U.S. International Trade Commission ruled this month that imported solar cells are putting too much competitive pressure on domestic cell producers. The commission will now examine what remedy would be appropriate, and then it will be up to the Trump administration to decide whether to take action. The likely remedy would be to impose tariffs on imported solar cells, thus protecting U.S. cell manufacturers and raising prices for consumers.
The solar industry is already receiving this sort of protection. In 2014, in response to a complaint by U.S. manufacturers, the Commerce Department imposed tariffs of up to 78.42 percent on imports of solar panels made in China, increasing the price for any U.S. consumer purchasing the panels. But that wasn't enough for the U.S. companies filing this year's complaint relating to the cells that make up the panels.
This attempt to raise the price of using sunlight for energy reminds me of one of the most famous documents in the history of free trade. In 1845, the French economist Frederic Bastiat wrote "The Candlemakers' Petition," in which he imagined the makers of candles and street lamps petitioning the French parliament for protection from a most dastardly foreign competitor:
"We are suffering from the ruinous competition of a rival who apparently works under conditions so far superior to our own for the production of light that he is flooding the domestic market with it at an incredibly low price [ . . .] This rival … is none other than the sun."
After all, Bastiat's imaginary petitioners noted, how can the makers of candles and lanterns compete with a light source that is totally free?