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Bonus Quotation of the Day…

… is from this August 17th, 1970, Newsweek column by Milton Friedman:

The proponents of [tariffs and import] quotas say, “Free trade is fine in theory but it must be reciprocal. We cannot open our markets to foreign products if foreigners close their markets to us.” Japan, they argue, to use their favorite whipping boy, “keeps her vast internal market for the private domain of Japanese industry but then pushes her products into the U.S. market and complains when we try to prevent this unfair tactic.”

The argument sounds reasonable. It is, in fact, utter nonsense. Exports are the cost of trade, imports the return from trade, not the other way around.

DBx: Only by falsely supposing that a country is a company does the absurd notion that imports are a cost and exports a benefit continue to persist.

Of course, producers who seek government-enforced protection from foreign competition have every interest in perpetuating this myth. (Indeed, some of these producers might even come to believe this myth to be true.) The greater are the number of people who believe that imports are a cost and exports are a benefit, the greater are the number of people who are easily duped into supporting protectionist policies that actually harm them as these policies artificially enrich a handful of domestic producers.

Domestic producers who get, or who sniff that they might be able to get, the government to harass their fellow citizens who wish to buy imports are an astonishingly greedy and anti-social lot. They believe themselves to be superior to their fellow citizens; they believe themselves to be entitled to a portion of their fellow citizens’ incomes; and they are shameless at concocting ridiculous excuses and hypothetical tales in their attempts to connive the public to endorse their plunder.