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Quotation of the Day…

… is from pages 6-7 of my late Nobel-laureate colleague Jim Buchanan‘s 1966 paper “Economics and Its Scientific Neighbors,” as this paper is reprinted in Moral Science and Moral Order (2001), Vol. 17 of The Collected Works of James M. Buchanan:

Individuals choose among the various opportunities that they confront, but, in doing so, they cannot treat other individuals as they can the physical environment. One means of choosing more rather than less is choosing to engage in trade; in fact, this is the pervasive means through which man has expanded his command of “goods.”

DBx: Trade – what Adam Smith identified as humans’ natural “propensity to truck, barter, and exchange one thing for another” – is an essential feature of our humanity. Specialization and trade are among the keys to our survival as a species and to the growth of what Smith called “the wealth of nations.” And so for some relatively small number of humans to use force and deception to prevent each member of the great majority of humans from trading as he or she sees fit is for that small number of humans to act inhumanely.

Because the gains to those who successfully obstruct trade are concentrated upon them while the larger costs are spread out over much larger numbers of people, creating the illusion that trade restrictions promote prosperity is all too easy. “Look at the increased sales of protected sugar farmers! Observe the jobs in the steel factory that would have disappeared without steel tariffs! Notice the industry thriving here that would have collapsed absent the tariffs and subsidies that kept if afloat!” But, once again, to point to such private benefits as evidence of the social benefits of trade makes no more sense than pointing to the loot now in the possession of the successful armed robber as evidence of the social benefits of armed robbery. (A major difference between robbery and protectionism is that the ratio of victims to plunderers is much closer to 1:1 in the case of robbery than in the case of protectionism. In the case of protectionism, this ratio is always much higher – as in very many victims for each plunderer. Another difference, of course, is that run-of-the-mill armed robbers, burglars, and pickpockets – unlike protectionists – don’t attempt to insult their victims’ intelligence with assertions and intricate theories of how their thievery is actually to the benefit of their victims.)

There is, though, one way in which protectionism and robbery are similar: each is very commonplace in human history. Indeed, protectionists often use this fact to justify protectionism: “It’s widely practiced!” Well, yes it is. But any protectionist who utters such a justification for trade restrictions should be asked if he or she therefore believes that robbery, burglary, rape, and other varieties of predation also are justified. After all, they, too, are widely practiced.