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Proponents of Industrial Policy and Protectionism Know No Economics

In my latest column for AIER I do my best to expose more of the economic fallacies that infect the case made by Daniel McCarthy and other ‘conservative nationalists’ against a policy of free trade. A slice:

From Adam Smith forward, economists and market liberals have explicitly addressed – patiently, repeatedly, and in countless different ways – the incessant protectionist assertion that the home country will suffer if it doesn’t impose tariffs on imports from countries whose governments impose tariffs on home-country exports. Indeed, countering this particular protectionist canard is standard fare for many students as early as ECON 101.

Informed free traders have also continually explained why market-distorting subsidies used by foreign governments justify neither subsidies nor tariffs in the home country. Similarly, we market liberals have, again and again and again, busted the myth that the home-country government should impose tariffs or dole out subsidies in order to counteract the economic damage done at home by the home-country government’s own unwise regulations and burdensome taxes.

It would, of course, be impossible to counter these protectionist excuses for tariffs and subsidies without recognizing that governments both abroad and at home do indeed often intervene in ways that distort markets.

That Daniel McCarthy knows no economics isn’t a sin. Most people know no economics, and most economists know nothing about other fields and disciplines. We’re all fortunate enough to live in a world of deep specialization.

It is, however, inexcusable for people such as McCarthy to present themselves to the public as if they know the economics that they criticize with such cocksureness. Judging from what he writes, McCarthy is as unschooled in economics as I am in the classics, which is to say almost completely. And so McCarthy’s criticisms of  the economics of trade – and of market-liberals’ support for a policy of unilateral free trade – deserve no more respect than would be deserved by any criticism that I might offer on the merits of a new translation of Ovid’s Tristia.