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Quotation of the Day…

… is from the penultimate paragraph, pages 229-230, of Dartmouth College economist Douglas Irwin’s superb 1996 book, Against the Tide: An Intellectual History of Free Trade:

A closer look at each free trade controversy reveals that there are significant shortcomings to each proposed argument against free trade. Perhaps the most glaring example is that of the infant industry argument, which economists, particularly in the nineteenth and early twentieth centuries, bent over backward to accept in an effort to be fair-minded about the possibility of a positive government role. Yet a specific theoretical rationale for infant industry protection was never worked out and sound cost-benefit analyses of such protection was not undertaken until much later.

DBx: The human mind is not only creative and fertile, it is also determined. If it wishes to find a reason to believe, it almost never fails. This reality is true even for the most fanciful of desired beliefs.

Finding valid theoretical exceptions to the case for a policy of free trade has long occupied many in the economics profession. (By “valid” I mean “does not contradict the basic premises in common use by economists when they do economic analyses.”) A few such valid exceptions have been found, but none that more than a handful of serious economists consider to have much practical merit.

Of course, those who aren’t constrained by the need to ensure that their theoretical case against free trade is valid churn out alleged exceptions in huge volumes. Just as ‘proving’ that there are exceptions to the laws of arithmetic if one isn’t obliged to stick to the logic and language of basic mathematics is childishly simple – “See, when arithmetic is done by people named Sam, five minus two equals eight!” – ‘proving’ that there are exceptions to the case for a policy of free trade is equally simple. But, of course, all such ‘proofs’ or ‘demonstrations’ are gibberish – and gibberish usually in service to grasping special-interest groups.


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