McCloskey on Mill On Liberty – and on Trade

by Don Boudreaux on February 8, 2016

in Competition, Crony Capitalism, Seen and Unseen, Trade

In response to this recent post, the great Deirdre McCloskey sent the following e-mail to me (links added; ellipses original):

On “protection” (if we could get rid of that word . . .): Mill in On Liberty (1859) wrote of the suffering from shifting demands and supplies, “Society admits no right, either legal or moral, in the disappointed competitors to immunity from this kind of suffering; and feels called on to interfere only when means of success have been employed which it is contrary to the general interest to permit—namely, fraud or treachery, and force.”​ That is to say, what is crucial is the ideological change that short-circuits the “protective” impulse of tariffs, licensure, quotas, and other uses of the monopoly of violence against the general interest.

In my reply to Deirdre I confessed that I’d read On Liberty only once, and that reading occurred at least 20 years ago.  I didn’t recall Mill’s eloquent objection on this score to protectionism the cronyist policy of exerting government force against fellow citizens to prevent them from spending their money as they choose.

…..

Deirdre’s e-mail gives me the opportunity to clarify a confusion that my poor wordsmanship has caused in some commenters and e-mail correspondents.  When I say that there are no losers today from international trade I emphatically do not mean that there is no one who must adjust to changes in the patterns of consumer expenditure what he or she does economically.  There are many such people.  These adjustments are typically costly, and in many cases greatly so.  The American steelworker who loses his job because his fellow citizens come to prefer to buy steel from Brazil rather than from Pittsburgh might remain unemployed for months or even years.  That unemployment is a source of real and undeniable suffering for that unemployed man and his family.

My point is not to deny the reality of outcomes such as the one described here of a hypothetical unemployed Pennsylvania steelworker.  My point, instead, is to insist that (1) there is nothing unique or special about losing a job to imports compare to losing a job to any of the countless other sources of job losses, and (2) any suffering that Jones endures from the economic institution of open trade must be weighed against the benefits that Jones reaps from that economic institution.  So when I say that there are in America today no losers from trade, I mean only that there are no losers from the institution of international trade all things considered.  I do not mean that there are not people who are made worse off economically, compared to how these people would otherwise have fared, by changes today in the patterns of consumer spending.

Perhaps an analogy would be helpful.  As with trade, I insist that there are no losers from freedom of speech.  Of course, it’s true that if, say, Paul Krugman exercises his freedom of speech to criticize a particular politician, that politician might suffer.  That politician’s pet piece of legislation might lose so much public support that it is not enacted by the legislature.  Or, worse for that politician, she might be rejected, as a result of Krugman’s exercise of Krugman’s freedom of speech, by voters in the next election.  It is no offense against the American English language to describe that politician as having suffered losses because of what Paul Krugman said about her.

But I insist that, even if this politician suffers unjustified public disgrace because of some (not legally slanderous) utterance that Krugman made publicly about her, she is not a “loser” from the policy of freedom of speech.  The civilization of which this politician is a part is unquestionably stronger, more durable, and greater because of its policy of free speech.  And the resulting benefits that this politician enjoyed in the past, and continues to enjoy even after Krugman’s talking unflatteringly or unfavorably about her, are almost surely so large that her suffering at the mouth of Paul Krugman is insufficient to classify her as a “loser” from free speech.

Just as we do not say that people, such as this hypothetical politician, are “losers” from free speech, we should not say that workers who today lose their current jobs to imports are “losers” from free trade.  (Note that a similar analogy can be drawn with freedom of religion.  Freedom of religion has, no doubt – because of the competition it unleashes among different religions and churches – caused many a priest, preacher, pastor, rabbi, Iman, and wicken to lose his or her job, or to otherwise suffer a loss of income or of prestige.  And yet we rightly do not describe these losses as being the results of freedom of religion.)

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