Bonus Quotation of the Day…

by Don Boudreaux on March 12, 2016

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

… is from pages 67-68 of Paul Krugman’s vital 1996 collection, Pop Internationalism; specifically, it’s from Dr. Krugman’s July/August 1994 Harvard Business Review article, “Does Third World Growth Hurt First World Prosperity?”:

Most worrisome of all is the prospect that disguised protectionism will eventually give way to cruder, more open trade barriers.  For example, Robert Kuttner has long argued that all world trade should be run along the lines of the Multi-Fiber Agreement, which fixes market shares for textile and apparel. In effect, he wants the cartelization of all world markets.  Proposals like that are still outside the range of serious policy discussion, but when respectable voices lend credence to the wholly implausible idea that the Third World is responsible for the First World’s problems, they prepare the way for that kind of heavy-handed interference in world trade.

We are not talking about narrow economic issues.  If the West throws up barriers to imports out of a misguided belief that they will protect Western living standards, the effect could be to destroy the most promising aspect of today’s world economy: the beginning of widespread economic development, of hopes for a decent living standard for hundreds of millions, even billions, of human beings.  Economic growth in the Third World is an opportunity, not a threat; it is our fear of Third World success, not that success itself, that is the real danger to the world economy.

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