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Quotation of the Day…

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… is from page 362 of my favorite economics book published in 2012, namely, my colleague Larry White’s The Clash of Economic Ideas [2] – and it’s a quotation that features within it some other genuinely fine quotations from Prof. Krugman (emphasis original to Krugman; links added; footnote omitted):

Advocates of protectionism in recent years are largely of two types.  Some are spokesmen for business or union interests seeking to block their foreign rivals from competing for domestic customers, as when the CEO of Ford Motor Company opposes the lowering of U.S. tariffs on imported cars, or when the international president of United Steelworkers calls for “Buy American” legislation.  Others are populist intellectuals largely or entirely innocent of the economic way of thinking on trade.  In his 1997 book Pop Internationalism [3], Paul Krugman observed that in many best-selling books that offer protectionist nostrums on international trade, the authors do not “challenge the economist’s view” but rather “they write as if it does not exist.”  The reader finds “nothing of international trade theory as economists know it – from Ricardo [4] on.”  Instead, “[t]he frameworks that are used to discuss international trade are either the author’s own inventions or, more often, derived from business or military strategy.”

(I would add to Krugman’s quotation above only that the ignorance of most protectionists today is ignorance not only of trade theory from Ricardo on, but also from Adam Smith [5] on.)

The myths that form the core of mercantilism – for example, that exports generally are wealth and that imports generally are costs that we, unfortunately, must pay in order to export; or that granting monopoly privileges to domestic firms and industries that happen to exist at the moment [6] promotes economic growth and makes ordinary men and women more materially prosperous; or that a society’s ‘natural’ economic boundaries are largely defined by that society’s political boundaries [7] – are held in direct proportion to the level of economic ignorance in a society.  Unfortunately, the quality of economic education in the U.S. is, I believe, far lower than what it should or could be* – and special-interest groups, along with their enablers in government, all too eagerly exploit this ignorance for their own greedy and anti-social ends.

* Although we at George Mason University’s Department of Economics are working diligently to restore the quality of economic education! [8]