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Quotation of the Day…

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… is the opening paragraph of Jagdish Bhagwati’s essay “Protectionism [2],” which appears in David Henderson’s Concise Encyclopedia of Economics [3]:

The fact that trade protection hurts the economy of the country that imposes it is one of the oldest but still most startling insights economics has to offer. The idea dates back to the origin of economic science itself. Adam Smith [4]’s The Wealth of Nations [5], which gave birth to economics, already contained the argument for free trade [6]: by specializing in production instead of producing everything, each nation would profit from free trade. In international economics, it is the direct counterpart to the proposition that people within a national economy will all be better off if they specialize at what they do best instead of trying to be self-sufficient.

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