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Overcapacity Here Means Under-capacity There

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I make the following point often [2], yet it is one the repetition of which is worthwhile…. to wit: if in reality there is “overcapacity” or “excess capacity” in one industry, there is necessarily under-capacity or suboptimal capacity in another industry or industries.  This point isn’t so much one of economics as it is one of arithmetic.  More resources cannot move or be moved to here without resources moving or being moved from there.  And so if there are too many resources here, there are necessarily too few resources there.

Yet when grasping, guile-filled, greedy protectionists use allegations of global “excess capacity” or “overproduction” to plead for government restrictions on their fellow citizens’ freedom to spend money as these citizens choose – pleas proffered under the pretense of using government to correct market distortions – we never, ever hear complaints of the necessarily corresponding global undercapacity and global underproduction.  And governments never propose to act in ways to correct for, or adjust to, the corresponding under-capacities.

This asymmetry of complaints and action screams loudly.  It screams that the real motive of producers who gripe about alleged global “overcapacity” is simply to escape the need to compete for consumer patronage.  The producers’ motives are nothing more grand or noble than to pick the pockets of others.  And governments’ motives are nothing more noble than to assist in this thievery.

So count me out as one who has any sympathies at all for the conniving, disingenuous, and anti-social U.S. steel executives [3].  These people are out simply to rob their fellow citizens using fraud and deceit.

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