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Quotation of the Day…

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… is from chapter 1 of William Graham Sumner’s 1885 book, Protectionism: the -ism Which Teaches that Waste Makes Wealth [2]:

A protective tax is one which is laid to act as a bar to importation, in order to keep a foreign commodity out. It does not act protectively unless it does act as a bar, and is not a tax on imports but an obstruction to imports. Hence a protective duty is a wall to inclose the domestic producer and consumer, and to prevent the latter from having access to any other source of supply for his needs, in exchange for his products, than that one which the domestic producer controls. The purpose and plan of the device is to enable the domestic producer to levy on the domestic consumer the taxes which the government has set up as a barrier, but has not collected at the port of entry. Under this device the government says: “I do not want the revenue, but I will lay the tax so that you, the selected and favored producer, may collect it.” “I do not need to tax the consumer for myself, but I will hold him for you while you tax him.”

DBx: While oceans of economic ignorance and misinformation sustain the political life of protectionism, the essence of protectionism is predation: politically powerful domestic producers effectively bribe government officials to hold domestic consumers hostage so that those producers can rob consumers. The fact that the weapons used by government officials seldom have actually to be used – the fact that the coercion that is essential to protectionism is masked by the mix of economic ignorance and the euphemisms used to describe this predation (for example, “countervailing duties”) – doesn’t alter fact that protectionism is the use of force, on behalf of rent-seekers, to deny to fellow citizens economic opportunities that they would otherwise peacefully choose to pursue.

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