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Another Letter to Ian Fletcher

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Here’s a letter to Ian Fletcher:

Ian:

Displeased with my critical response [2] to Sherman Xie’s futile attempt to discredit the principle of comparative advantage [3], you assert that I “don’t take seriously enough the lock-in effects of comparative advantage in dead-end industries.” That is, you accuse me of disregarding opportunities for income growth that allegedly are lost when people specialize in tasks for which they today have a comparative advantage rather than allow themselves to be led by a wise government to change their comparative advantage so that they tomorrow successfully specialize in tasks that yield higher incomes.

There is so much wrong with your accusation that I hardly know where to begin. So I’ll limit myself here to two points.

First, neither I nor any competent free trader denies that the pattern of comparative advantage can and often does change. The pattern of comparative advantage changes continually. It changes each time a worker learns a new trade, each time a student studies a new discipline, and each time a firm does research and development. What I do deny is that government officials – all equally as ignorant as other human beings, yet unequally possessing power to coerce others – occupy a unique vantage point for determining what is the ‘best’ pattern of any country’s comparative advantage.

You believe that government officials are somehow invested with the miraculous ability to out-guess competitive markets, while I find such a belief to be disproved by both theory and history.

Second, your assertion that free trade ‘locks’ workers in to traditional jobs is at odds with a pet complaint about free trade frequently issued by many of your fellow protectionists – namely, that free trade too readily throws workers out of traditional jobs.

While I understand that the intellectual sins of one protectionist aren’t necessarily ones committed by all protectionists, I do find it remarkable that among the ranks of prominent protectionists today we have, on one hand, people such as yourself who complain that a policy of free trade locks too many workers into traditional jobs, and, on the other hand, people such as Oren Cass [4] who complain that a policy of free trade displaces too many workers from traditional jobs. Obviously, free trade cannot be guilty of both offenses!

The fact that protectionists’ arguments are so scattershot, so varied, and so often in conflict with each other testifies to the intellectual flimsiness of protectionism and to the cavernous economic ignorance of those who peddle protectionist arguments to an unsuspecting public.

Sincerely,
Don

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