As both an economics and a law student, I was very lucky in the professors I had. Fritz Machlup‘s International Trade course at NYU will always rank among the intellectual highlights of my life.
Another truly great teacher is Leland Yeager, from whom, at Auburn University, I learned much about money, banking, macroeconomics, and political philosophy. Leland is a scholar’s scholar: careful, thorough, brilliant, learned, wise, and possessing not a whiff of self-importance. (See also this wonderful article, by Bill Breit, Ken Elzinga, and Tom Willett, on Leland.)
I recently discovered a monograph Leland wrote back in 1954, entitled Free Trade: America’s Opportunity. (Although long out of print, the wonders of the market enabled me to buy a copy for $9.99.) This monograph bursts with wisdom and insight — for example, consider Leland’s response to those persons who assert that free trade is good "in theory" but not so good "in practice."
The Protectionist actually takes pride in his narrow viewpoint. He sticks to plain facts — clear examples of benefit from Protection or of damage from foreign competition. He does not concern himself with remote, intangible, theoretical consequences. Thank God, he is no impractical theorist who never met a payroll! If he happens to be a watch lobbyist, he must struggle for patience with the poor understanding of Congressmen who never had practical experience in retailing watches. If he is a fishing-tackle man, he pities the ignorance of trade-agreements negotiators who never had practical experience in manufacturing fishing tackle. He scorns the theorist’s "over-all" view of the economic system and sticks to the down-to-earth case-by-case approach. In so doing, he refuses to consider the decisive heart of the tariff controversy.
[Leland then offers this quotation from Norman Campbell, What is Science? (1952)]:
The plain man — I do not think that this is an overstatement — calls a "theory" anything he does not understand, especially if the conclusions it is used to support are distasteful to him…. It is only because he does not understand "theory" that the plain man is apt to compare it unfavorably with "practice," by which he means what he can understand.
The practical man is apt to sneer at the theorist; but an examination of any of his most firmly-rooted prejudices would show at once that he himself is as much a theorist as the purest and most academic student; theory is a necessary instrument of thought in disentangling the amazingly complex relations of the external world. But while his theories are false because he never tests them properly, the theories of science are continually under constant test and only survive if they are true. It is the practical man and not the student of pure science who is guilty of relying on extravagant speculation, unchecked by comparison with solid fact.
For all his vaunted realism, the Protectionist theorizes without knowing it. Furthermore, his haphazard theories are far less able to stand inspection than those of the trained theorists whom he scorns [pp. 33-34; original emphasis].
The next time you hear someone praise the "practical" insights about trade issuing from people such as Ross Perot, Lou Dobbs, or the well-meaning but economically uninformed business executive who pleads with Congress for protection from competition, remember the above slice of wisdom from Leland Yeager.