Bonus Quotation of the Day…

by Don Boudreaux on February 1, 2019

in Myths and Fallacies, Trade

… is from page 114 of Paul Krugman’s important article “What Should Trade Negotiators Negotiate About?” which first appeared in the March 1997 issue of the Journal of Economic Literature:

There is no inconsistency or ambiguity in the economic case for free trade; but policy-oriented economists must deal with a world that does not understand or accept that case. Anyone who has tried to make sense of international trade negotiations eventually realizes that they can only be understood by realizing that they are a game scored according to mercantilist rules, in which an increase in exports — no matter how expensive to produce in terms of other opportunities foregone — is a victory, and an increase in imports — no matter how many resources it releases for other uses — is a defeat. The implicit mercantilist theory that underlies trade negotiations does not make sense on any level, indeed is inconsistent with simple adding-up constraints; but it nonetheless governs actual policy.

DBx: Truly so.

Protectionism – the belief that forcibly decreasing fellow-citizens’ access to goods and services offered for sale by foreigners increases fellow-citizens’s access to goods and services – is rank stupidity. Its veracity is on par with that of flat-earthism, and the intellectual respect deserved by those who peddle protectionism is no greater than is the intellectual respect deserved by voodoo queens.

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