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Quotation of the Day…

… is from page 266 of Jacob Viner‘s 1968 International Encyclopedia of the Social Sciences article, “Mercantilist Thought,” as this article is reprinted in the 1991 collection, edited by Douglas A. Irwin, Jacob Viner: Essays on the Intellectual History of Economics:

Underlying these [mercantilist] positions were the beliefs that labor was in such abundant supply that it was permissible to treat it as nearly equivalent nationally to a free good….

DBx: Protectionists’ implicit belief that labor is a free good remains today super-abundant. Pick an argument for protection at random and you’ll likely find that the person offering that argument boasts only of the new jobs and higher wages that will be created in the protected industries. Full stop. With this demonstration, the protectionist fancies himself or herself as having thereby carried the day – as having thereby ‘proven’ that protectionism promotes job and wage growth and is, thus, good for the economy.

But obviously, the typical protectionist – by arguing in this manner – merely reveals himself or herself to be someone who fails to ask the questions “From where do the workers who fill these newly created jobs come? And from where do the real resources used to pay these higher wages come?” The fact that the typical protectionist denies the relevance of these questions implies that he or she believes that these workers, and the resources used to pay them, have been sitting idle, with absolutely nothing else to do – that is, are free.

All of the above means that the typical protectionist has a very low opinion of the workers whose well-being he or she champions. It is the belief of the typical protectionist that the workers who fill the jobs that are artificially created by protectionist restrictions have zero value elsewhere in the economy – that these workers can produce nothing of value except that which they produce in the protected industries (and that these workers are worthwhile to their employers in the protected industries only when the prices of the outputs they produce are artificially raised by protectionist measures).

In short, the protectionist believes that the great economic problem of humanity is that we are all so wealthy that goods, services, and resources – including labor – are not scarce. Our land, the protectionist assumes, is that of Cockaigne.

Protectionism is strange and deeply mistaken – and also internally contradictory, given the protectionist’s belief that the superabundance that he or she implicitly assumes to mark reality is irreconcilable with the misery that the protectionist insists will befall workers in the absence of trade restrictions.