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Quotation of the Day…

… is from page 209 of my great teacher Leland Yeager’s, and David Tuerck’s, still-relevant 1966 book, Trade Policy and the Price System:

Applying theoretical-curiosity remedies to more than a tiny fraction of all departures from ideal conditions would require an extreme degree of theoretical and factual expertise and could hardly be done by parliamentary procedures.  Experts would inevitably have a good deal of independence, if for no other reason than that others would have trouble keeping track of what they were doing and why.  Legislators are not without influence on experts; but the influence is often more likely to be piecemeal and capricious, based on incomplete information and responsive to lopsided political pressures.

In short, free trade can be put into practice; ideally compensatory second-best policies cannot be.  Free trade is a meaningful, specific, discussable policy proposal; ideal protectionism is not.

DBx: Contrary to much misunderstanding, the case for free markets generally, and for free trade specifically, does not depend upon conditions being “perfect” or “ideal.”  First, a proper understanding of this case includes the recognition that, relative to political ‘solutions,’ the decentralization, trial-and-error competition, and maximum ability of each person to say ‘no’ in markets not only minimize the ill consequences of errors, but also fuel a process of discovery of how best to improve matters over time.  Second, a proper understanding of the case for markets includes the recognition that the same human flaws that so often cause markets to operate less than perfectly also cause political ‘solutions’ to operate less than perfectly.

Government policy at its attainable best is a choice of rules and not a choice of outcomes.  If it is (as it too often is) an attempt to produce particular outcomes, this ‘policy’ necessarily rejects the discipline and guidance of rules in favor of discretion exercised by state officials.

Note another point that’s made clear by the above Yeager-Tuerck quotation: any Trumpians (or other populists) who justify the use of trade restrictions as a means of ‘correcting’ the consequences of the trade distortions introduced by other governments entangle themselves in a curious contradiction.  On the one hand, their populism rejects rule by experts.  Yet on the other hand their pointing to other-governments’ trade interventions as justification for ‘our’ government to impose trade restraints requires, if such countervailing ‘policies’ are to have any realistic chance at all of succeeding in the way that economic theory demands, rule by experts.