manasib

+1 with Hello Mister Walrus and cfagoal1.

For example, assume Silicon Valley is a country and they are importing tires from Detroit. Now, govt of Silicon Valley bars imports of tires from outside by imposing high tariffs on them.

In that case, Silicon Valley will have to produce their own tires. This takes their resources / man power away from technology, which they are more productive at. This diversion of resources to less productive work increases inefficiency in the economy as a whole.

Assumption: productivity of Silicon Valley workers is higher in technology than in tire making.