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This is the second in a series of e-mails that I sent today to someone who objects to my letter that appeared in yesterday’s Wall Street Journal [2].
Mr. Matt Walden
Mr. Walden:
Thanks for your response.
You write that you “see nothing unethical about our government protecting our producers’ markets.” I disagree, for three reasons.
First: the language “our producers” is inappropriate. A producer in the State of Georgia no more belongs to me, or cares about my welfare, than does a producer in the Republic of Georgia.
Second: your argument extends further than you suppose. It implies not only that government should protect “our producers” from foreign competition, but also from any and all technological advances and changes in consumer spending that reduce the market shares of existing domestic producers. Do you believe, for example, that government should protect “our producers” from advances in information technology or from changes in consumers’ diets?
Third and more fundamentally: for government to protect domestic producers is for government – necessarily – to injure domestic consumers. How is this outcome not unethical?
Putting this third point differently, you find protectionism to be ethical because, in artificially restricting domestic consumers’ abilities to deal with foreign producers, some domestic producers benefit. Well, suppose that government were to impose protective taxes on exports in order to artificially restrict domestic producers’ abilities to deal with foreign consumers. Economic analysis of the same (poor) quality that leads you to conclude that the benefits bestowed on U.S. producers by U.S. import tariffs are a net benefit to Americans should lead you to conclude that Americans would be similarly benefitted were Uncle Sam instead to punitively tax, not American imports, but American exports. After all, export taxes would ‘protect our consumers’ from having to compete against foreign consumers to purchase the outputs of American producers.
Would you support government policies that artificially restrict the number of consumers to whom American producers may offer sell? If not, I encourage you to rethink your conclusion that it is both economically sensible and ethically acceptable for government to artificially restrict the number of producers from whom American consumers may offer to buy.
Sincerely,
Donald J. Boudreaux
Professor of Economics
and
Martha and Nelson Getchell Chair for the Study of Free Market Capitalism at the Mercatus Center
George Mason University
Fairfax, VA 22030