The Art of Economics

by Don Boudreaux on May 9, 2013

in Seen and Unseen, Trade

Here’s a letter to the New York Times:

Wendy Neu – executive vice-president of a U.S.-based electronics-recycling firm – writes “A recent study found that restricting exports of untested, nonworking electronics would create up to 42,000 American jobs with an annual payroll of up to $1 billion” (Letters, May 8).

The study has far too many flaws to serve as a justification for Congress to restrict U.S. exports. Its most serious error is that the authors completely ignore the economic activities, including jobs, that are created when Americans export. By overlooking the consequences that export restrictions inflict on exporters, and by focusing exclusively on the effects of such restrictions on a single industry, the study is an example of the worst sort of “economics” – a pretend-economics done by people who look only at part of the picture while ignoring the rest.

It’s as if an art critic examined only the far left side of Da Vinci’s Mona Lisa and then concluded that that painting’s subject is a winding road through a mountain pass.

Sincerely,
Donald J. Boudreaux
Professor of Economics
and
Martha and Nelson Getchell Chair for the Study of Free Market Capitalism at the Mercatus Center
George Mason University
Fairfax, VA 22030

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