Another Open Letter to Craig Walenta

by Don Boudreaux on February 16, 2018

in Crony Capitalism, Myths and Fallacies

Mr. Walenta:

I don’t understand why you think my example of an inexpensive cancer-curing pill to be inapposite.  That example, while hypothetical, probes the essence of an argument that American protectionists frequently use in their attempts to explain why foreign-governments’ abuse of their citizens justifies Uncle Sam’s abuse of American citizens.

To coherently make their case, protectionists must clear an ethical hurdle that is too seldom put before them – namely, they must justify their implicit assumption that domestic producers have a right to – a property in – the patronage of domestic consumers.  Yet this assumption is nearly impossible to justify when stated explicitly and squarely.  Does, say, Apple Inc. have a right to my patronage?  Am I morally obliged to buy some minimum number of smartphones from Apple every few years?  Does the lost revenue that my decision to stop using smartphones causes Apple to experience justify action by Uncle Sam to punish me?  Is it ethically appropriate for Uncle Sam to punitively tariff my decision to stop using smartphones?

If you answer ‘no’ to these questions, you thereby admit that Apple has no right to my patronage.  How, then, is it wrong for me to deny my patronage to Apple by purchasing a competing product that happens to be sold by a foreign firm?  Apple has thereby lost nothing to which it had any ethical or economic right or claim.  And this fact remains true even if the production of the imported smartphone that I choose to buy is subsidized by a foreign government.

Again, the foreign-government subsidy might well be said to inflict an injustice, but that injustice cannot possibly be against Apple given that that subsidy denies to Apple nothing to which Apple has any right or claim.  The injustice done by the foreign government is exclusively inflicted on, and exclusively borne by, those people who are forced to pay the price of this subsidy – namely, the taxpayers and consumers of that foreign country.

Donald J. Boudreaux
Professor of Economics
Martha and Nelson Getchell Chair for the Study of Free Market Capitalism at the Mercatus Center
George Mason University
Fairfax, VA  22030


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