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Bonus Quotation of the Day…

… is from page 99 of G.L.S. Shackle‘s 1973 volume, An Economic Querist:

Why is there exchange of goods amongst different parts of the world?

It happens for the same reason as exchange amongst individuals and firms: a person, or a nation, which desires good B can get more of it, for the same trouble, by making good A and exchanging it for good B, than by making good B.

DBx: Typical protectionists see the cost-savings to which Shackle here points as a bug rather than as a feature of international trade. The reason is that protectionists mistake costs for benefits. Marveling at the high prices that people are willing to pay in order to acquire units of goods and services that are unusually scarce, protectionists leap to the wholly mistaken conclusion that scarcity, therefore, is the source of prosperity, and that the greater is scarcity, the more prosperous the society.