… according to SMU economist Bob Lawson (via e-mail), “saw the movie Cast Away and thought, ‘What fun!'”
DBx: The protectionist will protest that comparing a lone individual who is prevented by natural circumstances from trading with others, to a group of individuals who are prevented by artificial circumstances (that is, state “trade policy”) from trading with individuals outside of their group is extreme. And I would agree that the comparison is indeed extreme. But if the major premise of the protectionist is correct – namely, that greater wealth is created through the greater work that must be done when goods and services become more scarce – then the extremity of an isolated lone individual on an island should reveal with sparkling clarity the truth of the protectionist’s major premise.
Of course, no such truth is revealed when we contemplate the miserable lot of an isolated individual stranded alone without any ability to have commerce with other people. Even a four-year-old child understands that that stranded individual will be mired in material poverty too extreme for us moderns to fully comprehend.
But the protectionist, as I’ve said before, is a stubborn soul. He or she pushes back against what he or she believes to be the knavery of the free-trader, whose arguments (the protectionist is sure) are nothing but exercises in legerdemain, chicanery, and casuistry. The protectionist suggests that there’s some optimal number of individuals between, at one extreme, one person, and, at the other extreme, the entire population of the world, who comprise the optimal-sized economic group. Yet the protectionist has never offered any coherent theory to help us determine what this optimal size is, or to help us understand how to go about even to think about how to determine what his optimal size is.
The protectionist simply assumes the the optimal size for each country is, miraculously, the number of people in each country.
One reason why no protectionist has ever offered any coherent theory of an optimal size of the economic group that is smaller than the population of the world is that no such coherent theory is possible. Or at least, no such theory is possible as long as there are human wants that remain to be satisfied, and further specialization of the performance of productive tasks increases per-capita economic output.
Put differently, for the very same reason that it would be idiocy for a lone person who is stranded alone to refuse to trade with another person or persons on the grounds that such trade would ‘destroy’ his need to do certain jobs that he does in his individual isolation, it is idiocy for any group of people – no matter how large – to refuse to trade with another group of people on the grounds that such trade would ‘destroy’ their need to do certain jobs that they do in their group isolation. Because members of the group specialize and trade with each other, they are wealthier than is an isolated individual who trades with no one. But just as the lone individual would become materially wealthier by specializing and trading with others, so too would the group become materially wealthier by specializing and trading with others. And there is practically no limit to expansions in the size of the trading group to increase the per-capita material wealth of members of the group.
