Bonus Quotation of the Day…

by Don Boudreaux on February 13, 2020

in Crony Capitalism, Hubris and humility, Man of System, Myths and Fallacies, Reality Is Not Optional, Seen and Unseen, The Economy, The Future, Trade

… is one to which Oren Cass, Daniel McCarthy, and other enthusiasts for protectionism and industrial policy should pay attention; it is from pages 68-69 of Chapman University’s Bas Van Der Vossen’s and Georgetown University’s Jason Brennan’s 2018 book, In Defense of Openness (original emphasis; footnote deleted):

However, it’s one thing to say that in principle such protectionist measures could pay off. It’s quite another to say that in the real world, we should pursue them. One problem here is that we face serious epistemic barriers. While on the blackboard we can describe infant-industry protection working to a country’s advantage, in the real world we aren’t well equipped to know which infant industries are worth protecting, how much protection they should have, when those protections should be relaxed, or which forms of protectionism will realistically benefit us more than they hurt us.

Closely related to this is the problem that protectionism will enable massive amounts of destructive rent-seeking – that is, attempts at gaining private economic benefits through political means.


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