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Quotation of the Day…

… is from page 135 of the 1936 English-language edition (translated from German by Alfred Stonier and Frederic Benham) of Gottfried Haberler’s classic 1933 book, The Theory of International Trade With Its Application to Commercial Policy (original emphasis; footnote deleted):

I refer to the propaganda which is carried on especially in the United States (but also in certain other countries, including Great Britain) against imports from countries which have lower real wages and therefore a lower standard of living. The general public is quite convinced by the argument that only high Protection can enable American industries to compete with European industries which pay much lower wages and that a high standard of living can be maintained only behind a high tariff wall. The truth is that the high standard of living is a consequence of the favourable conditions of production and in no way rules out an advantageous trade with the rest of the world.

DBx: Yes. This fact cannot be too-often repeated. The myth that Haberler here busts would be far less widely swallowed if workers who are called “high-wage workers” were instead called by a name that is perhaps even more accurate: “high-productivity workers.” (Correspondingly, public understanding of trade would be less confused if “high-wage countries” were instead called “high-productivity countries.”)

The deep confusion of the many people who swallow and repeat the myth that Haberler here busts can be seen simply by asking why the New Orleans Saints insist employing as their starting quarterback high-wage Drew Brees rather than low-wage me.


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