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Quotation of the Day…

… is from page 243 of the 1991 Robert Schalkenbach Foundation edition of Henry George‘s 1886 volume, Protection or Free Trade:

The getting of work, not the getting of the results of work, is assumed by protectionist writers to be the end at which a true national policy should aim….

DBx: As long as there are human desires that remain less than fully satisfied there are opportunities for productive work.  And most work in a market-oriented economy is indeed aimed at satisfying human desires – namely, the desires of those for whom each of us works.  The only work that is truly productive is work that results in real goods or services that human beings want to consume – and want to consume badly enough to personally pay the price of acquiring these goods and services for consumption.  Only such work is socially productive.

Each of us in modern society sometimes works to produce real outputs directly for our own individual, or for our families’, consumption – such as when we ourselves clean our homes, do our own laundry, prepare our own meals, or repair our own leaky faucets.  But most of the work that we in modern society do is not to produce outputs directly for our own consumption; most of the work that each of us does is the production of real goods and services for sale to others for their use.  Each of us willingly toils to improve the welfare of countless strangers only because these strangers give to us in exchange the real goods and services that they produce and that we desire.

Of course, in the vast economy of which we are a part we do not exchange the real goods and services that each of us produces directly for the real goods and services produced by others.  Money serves as the medium of exchange.  Each of us produces real goods or services for others, and we are first paid in money.  Then each of us uses the money we are paid to acquire those of the real goods and services that have been produced for sale by countless strangers and that we want badly enough to pay for.

The protectionist, confused by the indirectness of exchange in any economy larger than that of a tiny village, mistakenly concludes that that which ultimately improves the welfare of each worker is the work that the worker performs rather than the real goods and services that each worker purchases and consumes out of the fruits of his or her work.  So the sincere protectionist (as opposed to the venal rent-seeking producer for whom the sincere protectionist unwittingly serves as a useful idiot) supposes that the goal of trade policy should be to protect existing jobs.  This protectionist not only fails to see that the destruction of jobs A and B by trade result in the creation of better jobs X and Y; the protectionist also is blind to the reduction in purchasing power that protectionist policies inevitably bring.


No one – not even the most economically naive protectionist – would think that Man Friday does Robinson Crusoe a favor by wantonly destroying ten percent of all the food, clothing, shelter, and tools that Crusoe produces for himself.  Even the most economically illiterate protectionist sees immediately that any such destruction unambiguously worsens rather than improves Crusoe’s welfare.  Yet let Crusoe be in a situation in which he acquires some of what he consumes, not by producing it directly for himself, but indirectly by producing something for others on a neighboring island – others who give to Crusoe that which they produce in exchange for that which Crusoe produces – and the protectionist loses his wits.

“Why doesn’t Crusoe produce himself that which he imports?  That way, he’d have more work!”  No; Crusoe would still spend the same amount of time toiling – although that toil might indeed be more burdensome – but he’d also, in the end, have for his consumption fewer goods and services.  Or: “Why doesn’t Crusoe buy from Man Friday that which he doesn’t himself produce?  That way, his island would have more work!”  No, for as long as Crusoe and Friday have unsatisfied human desires there remains plenty of work for each of them to do on their island – indeed, far more opportunities for work than will ever be filled.  But if Friday credibly threatens to run Crusoe through with a spear if Crusoe buys, say, his coconuts from people on another island rather than from Friday, Friday will thereby force Crusoe to receive in exchange for his work fewer goods and services for his consumption.  (If Friday offered Crusoe a deal on coconuts better than the deal offered by producers on a nearby island, Friday would get Crusoe’s business without having to threaten violence on Crusoe.)

Friday, by getting Crusoe’s business only by obstructing Crusoe’s exchange with other producers, is made better off.  Crusoe, of course, is made worse off.  The sincere protectionist sees only Friday’s gain and draws the conclusion that Crusoe will be made better off if he follows Friday’s lead and threatens to kill Friday if Friday continues to buy fish from fishermen on a neighboring island.  The protectionist then gazes upon Crusoe’s resulting ability to get more in exchange from Friday than he, Crusoe, got when Friday traded freely with producers on the neighboring island.  The protectionist, looking only on each person as a producer – and seeing only how each person, Friday and then Crusoe, gets more in exchange from the other when each obstructs the other’s trade with those on another island – concludes that all residents of the island on which dwell Crusoe and Friday are made richer by their denying themselves access to goods produced by people on other islands.

Protectionists are suckers for the fallacy of composition.

And note that nothing of any significance above turns on the specific reasons that people on neighboring islands are able to offer attractive deals to Crusoe and Friday.


I hear the protectionist protest.  (Believe me, I hear – and read – such protests daily.)  “Your Crusoe-Friday island example is too simplistic!”  I respond: Really?  How so?  By confining the example to only two people, the reality of protectionism is more clearly revealed, yet nothing about this example distorts protectionism’s essence or effects.  If half of the working population of the United States threatens violence upon the other half unless the other half reduce their commerce with non-Americans, how are the results of this obstruction different, in essence, from Friday threatening violence upon Crusoe?  And will the welfare of all Americans be raised if the half that were the first victims of such coercion join in the game by coercing their coercers also into reducing their commerce with non-Americans?  If it is clear that the two-person society of Crusoe and Friday is made poorer rather than richer by obstructing their trade with those on nearby islands, why isn’t it clear that societies of hundreds of millions of people are each made poorer by obstructions on their freedom to trade with foreigners?  I just don’t get it.