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Quotation of the Day…

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… is from page 3 of Columbia University economics professor Arvind Panagariya’s forthcoming book from Oxford University Press, Free Trade and Prosperity [2] (footnote deleted; links added):

As the brilliant French economist Frédéric Bastiat [3] reminded us 170 years ago [4], the expansion of industry that receives import protection is visible to all, but the damage from such protection, which is spread throughout the economy, is not. As a result, import substitution remains a tempting target for politicians keen on demonstrating the successes of their policies to an unsuspecting electorate.

DBx: I’m very glad to see Bastiat here receive the respect that he deserves from a prominent modern mainstream economist who doesn’t have roots in the Austrian school.

Panagariya’s Bastiatian point is the core ingredient in the economic case for a policy of free trade. This case includes many other ingredients and trains of reasoning – much, although not all, in response to the fallacies and half-truths that are incessantly offered by protectionists.

The fact is that it is the rare protectionist whose objections to free trade do not begin with the failure to look beyond the most immediate impact on jobs and wages of imports. Whenever protectionists’ objections to free trade go beyond pointing out the particular jobs that are ‘destroyed’ by imports, these extensions of their argument nearly always are nothing more than motivated reasoning: desperate grasping for any available excuse, no matter how illogical or far-fetched, to allow them to cling to their absurd dogma that domestic abundance increases as a result of domestically contrived artificial scarcities.

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