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Quotation of the Day…

… is from page 591 of Douglas Irwin’s splendid 2017 book, Clashing Over Commerce (footnote deleted); Doug is here discussing mainly the Multifiber Arrangement which – as described by Wikipedia – “governed the world trade in textiles and garments from 1974 through 2004, imposing quotas on the amount developing countries could export to developed countries. It expired on 1 January 2005”:

The problem is that import restrictions were a costly and inefficient way of saving some jobs in the industry. The import restrictions were being used to save very poor jobs: average hourly earning in the apparel and non-rubber footwear industries were among the lowest in all of manufacturing. The consumer cost of protection per job saved, which measured the total loss to consumers divided by the number of jobs saved in the protected industry, was more than $100,000 for industries in which the average worker earned perhaps $12,000 annually.

DBx: Protectionists – alert only to what Deirdre McCloskey calls “Act One” of the economic drama – see only the jobs that are saved by trade restrictions, and (those jobs being real) conclude triumphantly that protectionism increases the wealth of the nation. Protectionists are too impatient or tendentious to sit for the entire drama; seeing only what they want to see, protectionists insist that what they want to see is all that there is to see.


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