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Bonus Quotation of the Day…

… is from page 453 of Deirdre N. McCloskey’s important June 1976 article in the Journal of Economic Literature, “Does the Past Have Useful Economics?“:

Foreign trade, it is said, was an engine of economic growth in Britain (and, lately, Japan), justifying a policy of impoverishing one’s citizens in the pursuit of exports. Floating exchange rates, it is said, added to the chaos of the international economy in the 1930’s, justifying the sacrifice of employment to the maintenance of $4.86, $2.80, $2.40, or (most recently) $2.00 to the pound sterling. Railways, it is said, were crucial to industrialization in the nineteenth century, justifying policies in nonindustrial countries in the twentieth of shoring up railways with subsidies and of eliminating trucking competition. Industrialization, it is said, brutalized the working class, justifying among most educated people a deep suspicion of capitalism. Labor unions, it is said, were responsible for a good part of the increase in wages since 1900, justifying government protection of extortionate plumbers, electricians, and butchers. The competitive supply of professional services in the nineteenth century, it is said, grieviously injured consumers, justifying official cartels of doctors and undertakers. Business monopoly, it is said, has spread greatly during the last century, justifying public hostility towards big business. The payment of competitive interest on demand or time deposits, it is said, created instability in the banking system, justifying laws to forbid it. Air pollution, it is said, is worse now than it was once, justifying draconic policies to combat it. Fossil fuel, it is said, is being used at a faster rate relative to proven reserves now than fifty years ago, justifying national goals of subsidizing new fuels and abandoning international trade in oil. Whether these are good or bad policies, to the extent that their public propaganda and their private inspiration rest on false historical premises – and most of them to a large extent do – their rationale is full of doubt.