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Quotation of the Day…

… is from page 111 of Jacob Viner’s indispensable 1937 volume, Studies in the Theory of International Trade:

It must be conceded that some of the mercantilist doctrine would not be quite so absurd if appraised from the short-run point of view.  But I have found no evidence that the mercantilists intended their analysis and proposals to be regarded as holding true for the short run only, and there is abundant evidence that they were ordinarily not aware of any distinction between what was desirable monetary or trade practice, to meet a temporary situation, on the one hand, and as permanent policy, on the other.

DBx: If the short-run were all that mattered, then many practices that are correctly regarded to be foolish, or even dangerous, would be sensible.  Tossing out the fine China instead of bothering to wash it after a meal would save time this evening, but leave you poorer over the long run.  Burning the dining-room furniture to make a roaring fire in the fireplace would save you from the immediate inconvenience of having to trek outside into the cold weather to fetch a fire log, but if you burn the furniture you’ll make yourself poorer in the long run.  Raiding your pension today to buy a luxury vacation to Tahiti and a brand-new top-of-the line Mercedes will give you great pleasure over the next few weeks and months, but cause you to be destitute in your old age.

My very first post at Cafe Hayek is on this very point.

Likewise, saving today’s jobs and today’s industries from being ‘destroyed’ by creative destruction – whatever its source – will yield short-run gains, but only at the underestimated price of long-term impoverishment.  Politicians, who focus like lasers only on the short-run, are naturally prone to support protectionist policies.  Yet these policies are the equivalent of raiding the pension for relatively paltry short-run benefits – and, moreover, benefits only for some (those who are politically visible) yet costs, even in the short-run, for other (those who are politically invisible).