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Quotation of the Day…

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… is from pages 65-66 of James Otteson’s newly published The Essential Adam Smith [2]:

Yet Smith is equally condemnatory of grasping merchants and businessmen who seek legal protections of their industries or prices…. Such merchants often proclaim that trade barriers, tariffs, and other legal protections are for the good of the country, but Smith exposes these claims as special pleading, since in practice they work to increase those particular merchants’ profits at the expense not only of their competitors but also of the public at large. Keeping prices up and limiting competition will certainly benefit the favored businesses, but such policies just as certainly impose artificial costs on everyone else. Smith argues that the way to deal with such attempts to procure legally granted special protections or favors is, however, typically not to ask the government to regulate them. Instead, it is to disallow legally enforced privileges in the first place. Markets and open competition are, Smith thinks, better providers of social benefit than short-sighted regulation by politically motivated legislators – who are, after all, often remunerated handsomely by the very merchants and businesses from whom they profess to protect the public.

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