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Quotation of the Day…

… is from pages xii-xiii of Richard Epstein’s Foreword to the 2009 collection of some essays by the brilliant Italian jurist and political philosopher Bruno Leoni, entitled Law, Liberty and the Competitive Market (Carlo Lottieri, ed.):

The key elements of any strong legal system are these.  It must have a strong allegiance to the position that each mature individual (let us put the question of guardianship of children to one side) is best equipped to make choices concerning his own welfare.  In order to do this, persons must have their own subjective evaluations of the worth of various goods and services that they can, at their own free will and pleasure, decide to produce and consume.  The key functions of the legal system can be neatly summarized in four words: aggression no, exchange yes.

DBx: Beautifully said.

Protectionism is among the many ‘public policies’ imposed by modern governments that are irreconcilable with the underlying law on which a free, open, and prosperous society is built.  If imposed only relatively sparingly – and, fortunately, protectionism remains rather modest in its use when compared to the size of the economy – the harm that it causes is masked by the continuing flow of benefits generated by the less-constrained, law-abiding parts of the economy.  Just as a society of mostly honest people is not undermined by the relatively few pickpockets, burglars, and armed robbers that infect it – just as the prosperity of such a society continues to grow because of the productive efforts of its honest, law-abiding denizens – so, too, a society infected with only a relatively small number of protectionist predators can continue to grow and thrive.  But also, just as no one mistakes the predations of the relatively few pickpockets, burglars, and armed robbers for activities that contribute to society’s prosperity, no one should mistake the predations of the relatively few protectionists as activities that contribute to society’s prosperity.

On this last point, though, the popular perception of protectionism does differ – dangerously – from that of pickpocketing, burglary, and armed robbery.  Supported by the state, carried out by titled people in suits whose guns remain largely out of sight, and called “trade policy,” the predations of protectionists are successfully passed off to the general public as activities that enhance rather than diminish the economic well-being of everyone in society.  And so not only does the general public not object to the predation that is protectionism, they positively demand to be preyed upon by this particular species of predators.

Unlike victims of pickpockets, burglars, and armed robbers – victims who understand that they are made poorer by these predators – victims of protectionists mistakenly fancy themselves to be enriched in proportion to the degree to which they are impoverished by protectionist predation.