… is from EconLog commenter Mark Z’s comment on this recent, excellent post by Pierre Lemieux:
Mercantilists often portray free trade as an ivory tower theory divorced from the practicality of ‘the real world.’ In point of fact, mercantilism is far more dependent on theoretical assumptions (in particular, non-retaliatory trading partners) that don’t pan out in real life.
DBx: Mark Z’s comment above is in direct and favorable response to an insightful comment on Pierre’s post by GMU Econ doctoral candidate Jon Murphy.
I add to Mark Z’s comment only the emphasis that the unrealistic, ivory-towerish assumptions on which protectionist policies rest include far more than that of non-retaliatory trading partners. These unrealistic – indeed, unsupportable – assumptions include also (but are not limited to) the belief that:
– the economic change and churn that are channeled through international trade differ in essential ways from the economic change and churn that arise as a result of any manifestation of competition;
– resources that are employed by home-country firms only because those firms are protected from foreign competition either have no alternative uses (and, thus, are free!) or have only alternative uses that are less valuable than their uses in the protected firms;
– politicians in the home country can generally be trusted to exercise wisely the power to obstruct the economic decisions of home-country residents.
As regular readers of Cafe Hayek know, the flaws and fallacies that constitute protectionist doctrines are numerous; indeed, protectionist doctrines are little more than smash-ups of flaws and fallacies.
Until reality is fundamentally changed such that more really is less and less really is more, protectionism – what Jon Murphy accurately calls “scarcityism” – will remain intellectually disreputable and ethically offensive.
