Quotation of the Day…

by Don Boudreaux on January 10, 2017

in Myths and Fallacies, Trade

… is from page 274 of Leland Yeager’s and David Tuerck’s indispensable 1966 volume, Trade Policy and the Price System:

imagesBy adopting free trade independently, instead, the United States could show the whole world that it sees tariff removal not as a self-inflicted injury to be carefully measured and paid for but as a direct benefit to itself.  This dramatic example might do more for the cause of world-wide free trade than years of negotiations.  It would avoid putting the stamp of approval on the protectionist ideas that show up in the inevitable exceptions and escape clauses of international [trade] agreements.

DBx: To be clear, I support complete unilateral free trade, regardless of how open or closed other countries are to international trade – and my support for complete unilateral free trade is without a single if, and, but, or other qualification.  Yet because unilateral free trade is politically impossible now in the United States, I also support any and all trade agreements that make Americans’ trade with non-Americans freer than it would be absent such agreements.  And I judge that most such agreements, in reality, do indeed make trade freer (if not, of course, as free as trade could be or should be).  But as Leland and David make clear in this quotation (and, indeed, in much of the chapter from which this quotation is extracted), there’s a real danger beyond any such agreement’s failure to make trade freer: such agreements are premised on deep ethical and economic misunderstanding.

The ethical misunderstanding is that domestic producers, whenever they succeed in persuading the state to act as their agent, are entitled to some portion of consumers’ income, and that force is justified to ensure that producers are able to extract from consumers that portion.  The economic misunderstanding – or, rather, the most prominent of a Niagara of economic misunderstandings – is that allowing consumers to import more is the price ‘we’ must pay for the benefit of enabling producers to export more.


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