Benefits Are Not Costs

by Don Boudreaux on September 25, 2014

in Myths and Fallacies, Seen and Unseen, Technology, Trade

Here’s a letter to an e-mail correspondent (who sent a similar e-mail, I gather, to my great colleague Walter Williams):

Dear Mr. B__________:

Disturbed at my and my colleagues’ support for free trade, you ask “how much does a cheap Chinese toaster at the big box store really cost after you factor in the unemployment it caused?”

Contrary to your supposition, labor saved by economic activities is a benefit of such activities rather than a cost.  Consider the washing machine in your home.  It’s a benefit to you precisely because of the labor that it saves you from having to exert to wash your clothes on a washboard.  Your washing machine enables you to enjoy clean clothes plus whatever activities you pursue using the time that you would have otherwise spent washing your clothes by hand.  That labor-saving device makes you richer.  And likewise with trade, which is a technique for saving labor.

So just as you would not describe the labor that your washing machine saves you as a cost of washing machines, you should refrain from describing the labor that trade saves an economy as a cost of trade.  It is not a cost of trade; it is a benefit.

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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