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Quotation of the Day…

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… is from page 85 of UCLA economist Deepak Lal’s 2013 volume, Poverty and Progress [2]; “contestability [3]” is a term that economists coined nearly 40 years ago to describe competition for (as opposed to merely within) markets:

[T]he process of globalization, in particular the integration of capital markets, do increase the contestability of both states and corporations. For the degree of contestability depends, in both cases, on the barriers to entry against potential new entrants and barriers to exit for existing customers. Current fears that a globalized economy will be monopolized by large multinationals are thus unfounded, as globalization by increasing contestability will make even the largest of this species behave in a competitive manner.

DBx: Yep.

Conservatives who embrace protectionism thereby embrace both the fear that businesses, entrepreneurs, and workers in their country are simply not up to the task of competing against foreign rivals, and the belief that among the steps in making their country “great” is for their own government to restrict the freedom consumers in their country.

“Progressives” who embrace protectionism share conservatives’ low opinion of their country’s businesses, entrepreneurs, and workers, but also mistakenly believe that protectionism ‘sticks it to’ corporate oligarchs when, in fact, it creates corporate oligarchs.

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