Protectionists are to Economics What Astrologers are to Astrophysics

by Don Boudreaux on March 6, 2011

in Balance of Payments, Myths and Fallacies, Trade

Here’s a letter to the editor of the website Economy in Crisis:

Setting up a straw man for the slaughter, Dustin Ensinger asserts that “Proponents of unfettered free trade have long claimed that lowering trade barriers will allow America to export more and more goods, eventually leading to trade surpluses and economic prosperity” (“Exports Won’t Solve America’s Many Trade Woes,” March 6).

Wrong.

Proponents of unfettered free trade have long claimed that lowering trade barriers will allow America to import more and more goods, eventually leading to greater economic prosperity.  Period.

Proponents of unfettered free trade – at least those who understand economics – don’t give a damn about trade ‘deficits’ or ‘surpluses.’  They agree with Adam Smith that “Nothing, however, can be more absurd than this whole doctrine of the balance of trade.”*

Sincerely,
Donald J. Boudreaux

* Adam Smith, An Inquiry Into the Nature and Causes of the Wealth of Nations (1776) Book IV, Chapter 3, paragraph 31

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